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Old 07-30-2012, 01:41 PM
 
Location: Columbia, SC
8,852 posts, read 17,450,334 times
Reputation: 6212

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OP, quit before you bungle the deal. Make an offer you're happy with and let the agent do their job. The seller isn't stupid, they'll know you don't have an agent. If the seller need to work out or want to work out or already have worked out a deal they will. Don't assume you know they commission. They agent wants to close this house so they are highly unlikely to do something to intentionally muck it up or not present your offer.

 
Old 07-30-2012, 01:41 PM
 
4,627 posts, read 7,206,357 times
Reputation: 4735
There's a lot we don't know in OP's buying situation.

State for one.

The actual property. It could be the most expensive house in the area. Or it could be the cheapest.

Don't know what comps look like.

Don't even know his offer!

And the most important part of all..........the seller's listing agreement with their realtor.

I've had listing agreements with clients anywhere from 3% to 8%. I also worked for two different brokers with completely different agent compensation plans.

Assumption makes an A$$ of everyone.
 
Old 07-30-2012, 02:13 PM
 
Location: DFW - Coppell / Las Colinas
29,948 posts, read 34,553,963 times
Reputation: 35946
OP another thing you might run across is the fact we agents (in most cases) work for large companies (our Broker). Our companies determine and own the listing and commission and any variation from those policies require approval. In most situations, We have contractual obligations to charge the fees determined by the Broker.

Depending on the situation, the agent along with the broker will determine if the broker reduces an agreed upon contracted amount. It's not always up to the agent.

What people don't understand is that the Broker has a fee (5% for example) they charge and it is in many cases not dependent on who brings the buyer. The 5% may be worth every penny if the buyer does not have Agent or legal representation. The amount of liability risk goes much higher with an unrepresented buyer (or seller). You can say "But not with me" but that does not release them of the extra liability. If you were to file a lawsuit, you know who you'd go after ?
 
Old 07-30-2012, 03:47 PM
 
Location: Salem, OR
13,745 posts, read 31,577,375 times
Reputation: 12110
Quote:
Originally Posted by ACWhite View Post
I think the OP has raised some very legitimate points, and I have no problem with his or her tone at all.

I also don't understand why some people aren't "getting" a main point about negotiation. Let's assume that the seller and the SA have a contract calling for the SA to pocket 6% (with the usual split for his broker, etc.) upon the home sale. But if I am the SA and a good offer has just come in, I may be more than happy to reduce my commission from the 6% (particularly on an $800K house) while increasing it from my usual 3%, say, to 4%, in exchange for doing slightly more work for this deal. SAs sometimes drop their commissions even on represented sales, if they want to get the property sold, the sellers won't budge on price, the SAs don't think a better offer is coming along, etc. Likewise, there is nothing preventing the seller and agent from having a conversation in this situation. A contract is not carved in stone if both sides agree to change its terms. The OP isn't dictating to the sellers what they should do or trying to nose in on the contract. S/he's just giving an option to get the sale done in a way that benefits everyone.

Let's be honest-- the vast majority of BA time is spent showing buyers houses and the proportion of BA work that remains once is deal is made is very small relative to that time, and sometimes buyers never do buy properties (so other sales commissions have to make up for this cost for the BA to remain in business). So the OP as a buyer (assuming s/he's very qualified) is reducing both time and risk relative to a normal BA relationship.

Why should the managing broker allow that? Because the broker doesn't have to give a buyer agent 3% and has a (presumably) able and willing buyer sitting right there. Lower costs for the broker for the SA to do a tiny bit of extra work? Rational brokers would say "sounds good to me."

I think some of the posters on this thread are trying too hard to find angles to protect their commissions in this situation.
I don't have an issue with the OP's tone, but I'm a direct person too. I just know from experience that most people need things presented to them in a more soft manner and email doesn't cut it. As an agent, I don't want my clients inserting the wrong tone into something and getting offended if we can work through something. It is a style thing.

I think you are stuck on the angle that everything is the same. You need to consider that 1) agents may not be able to adjust their compensation willy nilly, and 2) that it isn't already addressed in the listing agreement. What is there to negotiate if the unrepresented buyer issue is in the listing agreement? Because so many forums suggest buyers go it alone and take that 3% for themselves it is very common in my area to have that issue addressed up front with clients. This isn't a new conversation. I've been an agent for 8 years and the conversation is at least that old.
 
Old 07-30-2012, 04:11 PM
 
3,404 posts, read 4,141,016 times
Reputation: 2397
Quote:
Originally Posted by nikitakolata View Post
It isn't simply that the sellers need to "take a stand." The sellers have signed a contract with the listing brokerage. They cannot simply change their mind about paying the commission. If sellers could do that then no real estate agent ever would ever get paid. Also, the contract is with the brokerage the list agent works for, not with the specific agent. So, even if the agent were willing to take a smaller commission, their managing broker may not allow that (and why should they when they have a signed contract?).

If contracts can be voided and changed with the snap of ones fingers they are not worth the paper they are written on.

If the contract states that the commission payable will be reduced in the event that a buyer is un-represented, then the commission will be reduced. That is an agreement between the seller and the listing brokerage. Period. Even if the commission payable is lower, it does not mean the seller will accept a lower price. They may accept a lower price and they may not, but that is not because of real estate agent greed anymore than it is because of the seller's greed.
All of what you say is true, and your last paragraph is the correct way to handle it ahead of time before there even is a buyer.
 
Old 07-30-2012, 04:15 PM
 
3,404 posts, read 4,141,016 times
Reputation: 2397
Quote:
Originally Posted by manderly6 View Post
I'm surprised the issue of what happens if the buyer's don't have an agent isn't addressed when the listing contract is signed. I know when I sold my house we specifically talked about it and it was addressed in my listing agreement.
I agree. I think too many potential problems could happen trying to renegotiate commission in the middle of things.
 
Old 07-30-2012, 05:40 PM
 
413 posts, read 698,930 times
Reputation: 294
Quote:
Originally Posted by nikitakolata View Post
It isn't simply that the sellers need to "take a stand." The sellers have signed a contract with the listing brokerage. They cannot simply change their mind about paying the commission. If sellers could do that then no real estate agent ever would ever get paid. Also, the contract is with the brokerage the list agent works for, not with the specific agent. So, even if the agent were willing to take a smaller commission, their managing broker may not allow that (and why should they when they have a signed contract?).

If contracts can be voided and changed with the snap of ones fingers they are not worth the paper they are written on.

If the contract states that the commission payable will be reduced in the event that a buyer is un-represented, then the commission will be reduced. That is an agreement between the seller and the listing brokerage. Period. Even if the commission payable is lower, it does not mean the seller will accept a lower price. They may accept a lower price and they may not, but that is not because of real estate agent greed anymore than it is because of the seller's greed.
Seller can take a stand by firing their agent. Situation of an unrepresented buyer should have been covered in advance. IMO, it is ridiculous for a seller's agent to pocket 6% commission if a buyer comes to the table without an agent. In most situations half of the commission is allotted to compensate a buyer's agent. If there is no buyer's agent then there is about a 3% efficiency savings. In my mind seller trying to pocket 100% of that savings is not being fair to his client. His workload did not go up or at least not by much and IMO agent is taking advantage of the client.

If I were the seller I would not be happy with my agent at all. If I am locked into a contract for a certain amount of time I guess I would deal with it, but the day it expires is the day my agent is fired. Now however if the agent wants to do 4% that is reasonable and something I could work with.

However this situation has been hashed over and over on this board. It seems that realtors do not want to change. They want the full 6% commission because they feel that they have earned it. The easier solution is to go find a buyer's agent and get them to rebate you as much as you can. Probably you can find an agent willing to handle the transaction for a few grand and rebate the rest to you. Which on a 800K house will be a lot.
 
Old 07-30-2012, 05:44 PM
 
Location: DFW - Coppell / Las Colinas
29,948 posts, read 34,553,963 times
Reputation: 35946
Quote:
Originally Posted by hindukid View Post
Seller can take a stand by firing their agent.
A seller can't just fire their agent when they have a signed contract between the seller and broker. Many companies will enforce the contract.
 
Old 07-30-2012, 05:49 PM
 
Location: Lexington, SC
4,281 posts, read 10,294,366 times
Reputation: 3700
Ok

A real life question.

I sign with a seller agent and they say if I list and sell the house the sales commission will be 4% but if another agent get "involved" the sale commission could be as high as 6%.

Now no matter how, a buyer without a buyers agent makes an offer.

What is the sellers commision rate?
 
Old 07-30-2012, 06:16 PM
 
Location: Salem, OR
13,745 posts, read 31,577,375 times
Reputation: 12110
Quote:
Originally Posted by accufitgolf View Post
Ok

A real life question.

I sign with a seller agent and they say if I list and sell the house the sales commission will be 4% but if another agent get "involved" the sale commission could be as high as 6%.

Now no matter how, a buyer without a buyers agent makes an offer.

What is the sellers commision rate?
I would expect 4% if I were the seller since there isn't another agent involved.
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