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North Snohomish county area here - approx 40 minutes north of Seattle.
Hypothetical situation:
Seller and us ( the buyer ) are $5K or so apart on the deal. I am pretty sure that between 2 real estate agents ( obvious buyers agent and sellers agent ) as well as the fees the mortgage broker is getting.... they can mutually cover the $5K differnace to make this deal happen. House is approx $340K so you understand the commisions / concessions.
Lets say a 3 way agreement between the 2 RE agents and the mortage broker, they as a group of 3 agree to concede partial fees / commisions from the transaction to cover the $5K differance so the purchase and sale agreement goes to contract.
How and where exactly is that $5K concession written into the deal so as to protect us the buyer ?
I do not want to sign a contract saying I am paying $340K when in actuality I am only agreeing to pay $335K of my own money ( the other $5K is made up by the agents and mortgage broker concessions )
Last edited by target1961c; 11-21-2011 at 01:16 PM..
I would think if the "rebate" is coming out of the commission that would be up to the seller since they are the ones that have the agreement to pay the commission. I would assume your offer would just be for the lower amount.
You're 1.5% apart. Why should the agents or mortgage lender contribute again? They don't care if you buy this home or another one. Why don't you just split the difference with the seller and got to closing?
If your buyer's agency contract has a provision for a rebate that's one thing. But I bet that you have no such agreement with the seller's agent, and the mortgage company.
Do you ask you hair cutter, grocer, mechanic, etc to contribute to your lifestyle?
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I've done that before by splitting the commission with the other broker. Usually I do it because I don't split the commission with anyone else. I think there might be RESPA rules against the mortgage broker jumping in.
I'm also going to echo some of the other comments, 5K apart on a 340K deal? Which one of you is the bigger fool? The seller or you?
Actually, several of the people that replied aren't agents so you got the same response from the agents and the general public if it tells you anything. What was said in translation is: 5k is a relatively small amount considering the price of the home (1.5%), but it's 33% of the agents income you're asking them to contribute and that's significant. The purchase price is between you and seller, not the agents or mortgage broker so work it out. Also, like someone said, I don't think the lender can contribute anything because of RESPA.
BTW, our business isn't becoming extinct, it's just evolved. Fewer people sell be owner today than 5 years ago and many of the rebaters/low service/reduced fee companies have gone out of business. Calling agents parasites because we expect to be paid for the work we do? Isn't a parasite something that feeds off of a host? Who's trying to feed off of someone else right now? There is a parasite in the deal but I don't see it being the agents. I'm not saying...I'm just saying.
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