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OP - Just keep in mind that agents presenting offers to you are incentivized to make deals work so that they can earn their commissions. This does not always equate to coming to a conclusion that is in your best interest. Place this in the hands of an attorney representing your interests and the discussion would be different.
But using this same argument, if the attorney bills by the hour, aren’t they “incentivized” to work a few more hours than might be necessary?
Ok. Where in this transaction is the buyer’s agent seeking to gain the best deal
For her customer?
There’s no testosterone involved. Only logic and math. She’s seeking for her buyer to pay $7K more than they would have needed to.
A. The seller accepts the request and pays 5% total. This means they would have accepted $7K less. Buyer is the one paying it ultimately.
B. Buyer increases the offer. Pretty self explanatory- not the best deal available.
C. Seller rejects. Buyer loses.
So. Where in any of this is the benefit to the buyer to use this agent?
All of this is completely ignoring how tacky the whole thing is.
Thinking about it more, I would tend to agree with this.
I don’t fault the buyers agent for wanting 3%, especially if she is truly a “higher end” agent. But if that’s the case, she should have had an agreement with the buyers stating that. Maybe she does, but if so then there really isn’t a good reason to bring the sellers into that particular discussion. If anything, they’ve now annoyed the sellers who now might reject a good offer “out of principle.”
I feel like the reason she likely even brought it up to the sellers is because there is no agreement with the buyer. And I imagine she’d rather ask the seller to increase the commission % than ask her client to pay more. In fact, since this is all verbal right now, it’s possible the buyer may not even know what commission % the seller is offering. In my area, that’s really only stated on the official MLS documents.
Years ago when we offered our house 'for sale by owner' a buyer's agent tried that with us. We told the agent that their commission was between him and the buyers. We wanted our offering price, end of story. We got our price, what the buyers paid the realtor was none of our business.
Thinking about it more, I would tend to agree with this.
I don’t fault the buyers agent for wanting 3%, especially if she is truly a “higher end” agent. But if that’s the case, she should have had an agreement with the buyers stating that. Maybe she does, but if so then there really isn’t a good reason to bring the sellers into that particular discussion. If anything, they’ve now annoyed the sellers who now might reject a good offer “out of principle.”
I feel like the reason she likely even brought it up to the sellers is because there is no agreement with the buyer. And I imagine she’d rather ask the seller to increase the commission % than ask her client to pay more. In fact, since this is all verbal right now, it’s possible the buyer may not even know what commission % the seller is offering. In my area, that’s really only stated on the official MLS documents.
I think its the other way. I think she brought it up to the seller because there is an agreement in place between her and her buyer. I don't know about other states, but in my state to do what you are suggesting would be a violation. I can't just decide out of the blue that I want more money then what was originally agreed on and hold up a deal until I get it. I doubt that is allowed anywhere. At least it shouldn't be.
The reason to bring it up is to see if the seller will work something out to make it possible for the buyer to honor the agreement to pay the 1 percent. It may be that the only other option is to let the deal fall apart. How this goes may depend on how badly the seller needs to sell.
Ok. Where in this transaction is the buyer’s agent seeking to gain the best deal
For her customer?
There’s no testosterone involved. Only logic and math. She’s seeking for her buyer to pay $7K more than they would have needed to. ...
It is of course possible that you're correct, but any guess on our part would be merely speculation. Only the agent and the agents buyer know what's happening on their side of the table right now. At any rate, the agent couldn't have put it in the contract without the buyers blessing so the principal of the matter as well as emotion should be put aside in order to get the home sold.
To Mike's point, let the buyer worry about the buyers money and the seller worry about the sellers money. If the buyer is willing to write in their agent gets an extra 1% then the seller can just counter with an extra 1% price increase from what they would have otherwise countered with. Keep the goal in sight...don't lose track of the forest because you're trying to count the trees.
Years ago when we offered our house 'for sale by owner' a buyer's agent tried that with us. We told the agent that their commission was between him and the buyers. We wanted our offering price, end of story. We got our price, what the buyers paid the realtor was none of our business.
That sounds so unusual but it shouldn't. If the buyer wants the services of a buyer's agent, let free market forces prevail. Have the buyer's agent get what the market of buyers is willing to spend based on the value that they perceive for those services. That's how it works with everything else. Why is it any different for buyer's agents? Get rid of the scam where sellers need to pay for buyers agents in order to sell their houses. And buyers don't demand value or really care what their buyers agent costs because they think they aren't paying for it.
If you tell a buyer that they will need to pay 10k+ for their buyer's agent, you'd see that price decrease very quickly. you'd also see demands for better service and questions about exactly what services are provided, etc. You'd quickly get buyers saying that they don't want to pay for this or that. It would change rapidly and become much more aligned with what the buyer wants and needs and prices would plummet. Fee for services would be inevitable as buyers wouldn't be willing to pay for a vague bundle of services, much of which they don't want or need. They'd also ask why certain tasks can't be done by someone making $15 an hour instead of what an experienced agent might charge. So clients would demand 'right pricing' based on the types of services provided.
I think it's very bad practice for her to have asked this.
But everyone else is right... Our seller here, does not need to be concerned about that, only the bottom line.
That’s very true. And I think that’s where the disconnect between what I was saying and MikeJ was. I was speaking from the perspective of the buyer. (Well, and a RE consumer in general).
If it was me selling and they offered list with additional commission, I stand by my initial statement. Reject and make sure buyers knew it was rejected due to the commission request. Counter with list plus a point to cover their agent.
I’d also make sure my network knew this particular agent does not work in the buyer’s best interest, and to avoid her at all costs.
It is of course possible that you're correct, but any guess on our part would be merely speculation. Only the agent and the agents buyer know what's happening on their side of the table right now. At any rate, the agent couldn't have put it in the contract without the buyers blessing so the principal of the matter as well as emotion should be put aside in order to get the home sold.
To Mike's point, let the buyer worry about the buyers money and the seller worry about the sellers money. If the buyer is willing to write in their agent gets an extra 1% then the seller can just counter with an extra 1% price increase from what they would have otherwise countered with. Keep the goal in sight...don't lose track of the forest because you're trying to count the trees.
Exactly.
I seldom raise my voice to another agent, but I don't hesitate if they attempt to work my side of the table.
"Net Proceeds" is my goal for my sellers.
Quote:
Originally Posted by Diana Holbrook
She's NOT IMHO.
I think it's very bad practice for her to have asked this.
But everyone else is right... Our seller here, does not need to be concerned about that, only the bottom line.
It would be a very bad practice if the buyer and the Buyers Agent agreed that the agent would ask for an increased commission, so it could be baked into the contract, and then the agent didn't do so.
We have absolutely no input here that indicates this is not the case.
Ergo, the concept of "Net Proceeds" as a basis of seller negotiation is the sensible approach.
Staying focused on fact, not drama and supposition, and on one's own little turnip patch, is just evidence of good judgment.
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