question about buyers rebates, discount brokers, etc (sale, house)

[peikoh]

I'm in the market for a home, and haven't looked for a buyers agent yet, but was wondering about a few things (agents, please don't feel offended )

The typical commission split on a house is 3.6%/2.4%, but I've seen discount brokers that only charge 3.9% total commission to sell. What does this mean, does the buyers agent still get 2.4% so the listing agent only gets 1.5%?

I've also seen some realty firms offering buyers 1.5% rebate if you use their buyer agent. Is this cut from the buyer's agent 2.4% side?

Another situation, if I don't use a buyers agent, does the listing agent get the full 6% commission from the seller or just the 3.6%? If I don't use a buyers agent, would the seller/listing agent be willing to negotiate the price down by 2.4% since they would have had to pay the buyers agent anyways?

Last but not least, on a new construction, can a buyers agent negotiate more incentives or a lower price than if I just went in alone? Are we talking thousands or tens of thousands.

[Stu Barnes]

Commissions is something that is not set by law and is negotiable, but agents are not particularly allowed to discuss what other firms charge. But to answer your question....somewhat. When a listing agreement is signed the commission amount is x amount....so if you don't have a buyer's agent, then the whole thing would go to the listing agent....beware that the listing agent represents the seller...UNLESS you allow them to be a dual agent.

It would be to your advantage to have a buyer's agent because they represent you and your interests.....not the seller's AND in most cases if not all, the seller pay the commission, in other words, you are represented for free. It can be confusing, but I always say...hire an agent you like and trust and you will be ahead of the game.

[North_Raleigh_Guy]

Originally Posted by peikoh

The typical commission split on a house is 3.6%/2.4%, but I've seen discount brokers that only charge 3.9% total commission to sell. What does this mean, does the buyers agent still get 2.4% so the listing agent only gets 1.5%?

I find this question very interesting as I have often thought about this as well. I just can't fathom what kind of service you get from a discount listing agent who only stands to earn 1.5% from the sale of your home. Unless you have a very expensive house or the agent is independent and doesn't have to share his/her cut of the 1.5% commission with anybody else besides Uncle Sam, 1.5% seems like very little money for the work involved in properly marketting / selling of a home.

[VickiR]

I'm off the beach, thank you NRG!!! You sound like hubby!!!

We have discussed DISCOUNT brokers so often on this forum and since I have NOTHING GOOD to say except you get what you pay for...I am keeping my mouth shut!!!

But I'm sure if you look for the threads...you'll get an earfull!

Vicki

[Erin1264]

We had an absolutely wonderful experience with a listing agent who charged 3.9%. Yes, he still gave the buyers agent the 2.4%

He was not considered a "discount broker" and still worked with a large company. He just didn't believe in charging a high commission. And his listings really move.

He sold our home in a month, after it had been sitting on the market for 10 months with two other agents!

[peikoh]

ok, so what I'm hearing is that discount brokers that charge 3.9% total for listing a home may still give buyer agency 2.4% (so they/listing agent sacrifices) or they may reduce buyer agency commission as well

on the other hand, buyer agencies who give buyers rebate back I'm assuming takes it out of their 2.4%

so the question that is still up in the air is if I don't use a buyers agent, then the listing agent gets the full 6%....in the case would a listing agent be more inclined to let me negotiate the price of the house down by say 2.4% since that would result in a quick sale and a win-win situation for all?

buyer saves 2.4%, listing agent sells home, seller still pays the 6% but home is sold faster

[Stu Barnes]

peikoh.....I would be more concerned about being represented correctly than getting a house a bit cheaper without representation...it could cost you a lot more in the long run. Besides....a good buyer's agent could guide you to get a better deal anyways.....

[peikoh]

don't get me wrong, i am still considering a buyers agent.....

it's just that on my current house my buyers agent wasn't much help.....she didn't negotiate any added incentives that I couldn't already get from just asking the builder....and it was me checking on the construction and "nagging" the builder with my personal checklist of problems before we closed

i've also ran across some buyers agents in the past who were more concerned with getting me to buy the house and not really pointing out the negatives because they wanted to earn their commission fast, instead of getting the best deal for me or showing me more homes