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I am not sure why this hasn't been brought up in the conversation yet, but ultimately the commission should be clearly defined in the seller's contract with their agent and there is no grey area. If a buyer's agent wants more compensation, they should refer to the original contact and that's all that matters.
I am not sure why this hasn't been brought up in the conversation yet, but ultimately the commission should be clearly defined in the seller's contract with their agent and there is no grey area. If a buyer's agent wants more compensation, they should refer to the original contact and that's all that matters.
Actually, getting to a meeting of the minds, and proceeding to a successful closing, under price and terms acceptable to the seller are all that should matter to the OP.
The route to closing can vary, can be negotiated, and is never cast in stone.
Actually, getting to a meeting of the minds, and proceeding to a successful closing, under price and terms acceptable to the seller are all that should matter to the OP.
The route to closing can vary, can be negotiated, and is never cast in stone.
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. On a 250k house with a 225k mortgage, for every 1% of commission you pay - you have to give up approx. 1 year of equity building in your house if you are on a 30 year mortgage. To pay $2500 in commission you have to earn $3000 before taxes. Agents won't tell you that as they smile and hand you the pen to sign on the dotted line...
I bought several short-sale homes in 2010 in which the transactions were a major hassle.
But I had a good agent who navigated the sales and I was able to snag me some good deals.
I just bumped into a short sale.
In a sellers market, it may be worthwhile for some buyers to take on that hassle, but the banks/investors will feel they have leverage due to anemic inventory levels.
Thank you all! Right now, this is all verbal and we are waiting for the written offer, so we'll see if there's anything documented about her 3%. We know what we will want to counter with...so if there's anything about a 3% I'd love to comeback with a "we will counter at X amount, 4% commission" or "X++ amount, 5% commission". I wonder if the potential buyers are even aware of what their agent is requesting. If I were them and were asked to pay X++ because she wants more I'd be PO'd.
I don't know much about agent negotiations...but this whole thing just seems off. Like I said before, if you are showing a client a potential buy, you already go into it knowing what your commission % will be, and your priority is making the sale work for your client.
IANAL, but it seems to me that the buyer's agent is unethically trying to mess with the deal. If the listing says 2%/2%, and the buyer makes an offer at that price, then the buyer's agent gets whatever is in the listing. The buyer's agent can't kill a deal simply because they don't like the commission they get. And, any argument they might have is with the buyer not the seller.
Simply put, a buyer's agent who tries to kill a deal because they don't like the commission is not acting in the best interests of their client, and that seems to be highly unethical. It's not all about the agent, it's about the client.
Tell the agent to pound sand on the commission. The agent has to submit any offers put forth by the buyer, and pass on any counters/acceptances, etc from the seller. If the offer is one you will accept, accept it. Leave out any commission reference, etc.
IANAL, but it seems to me that the buyer's agent is unethically trying to mess with the deal. If the listing says 2%/2%, and the buyer makes an offer at that price, then the buyer's agent gets whatever is in the listing. The buyer's agent can't kill a deal simply because they don't like the commission they get. And, any argument they might have is with the buyer not the seller.
Simply put, a buyer's agent who tries to kill a deal because they don't like the commission is not acting in the best interests of their client, and that seems to be highly unethical. It's not all about the agent, it's about the client.
Tell the agent to pound sand on the commission. The agent has to submit any offers put forth by the buyer, and pass on any counters/acceptances, etc from the seller. If the offer is one you will accept, accept it. Leave out any commission reference, etc.
What hasn't been explained yet is that we are talking about 2 different contracts here. Likely there is first a contract between the buyer and their agent.. stating that the buyers agent will be paid 3 percent. This means that if a seller is offering 2 percent the buyer is then responsible for paying the 1 percent difference should they choose to enter into the second contract which is a purchase and sale for that house.
The other 1 percent has to be addressed because the buyer is responsible for paying it. I think what Mike has tried to tell people is that you can write the math portion of the contract differently so it all comes out acceptable to everyone. You can't just ignore it.
What hasn't been explained yet is that we are talking about 2 different contracts here. Likely there is first a contract between the buyer and their agent.. stating that the buyers agent will be paid 3 percent. This means that if a seller is offering 2 percent the buyer is then responsible for paying the 1 percent difference should they choose to enter into the second contract which is a purchase and sale for that house.
The other 1 percent has to be addressed because the buyer is responsible for paying it. I think what Mike has tried to tell people is that you can write the math portion of the contract differently so it all comes out acceptable to everyone. You can't just ignore it.
As a seller, sure I can. The contract between the buyer and the buyer's agent is really none of my concern. Now, if the buyer makes an offer that says that the offer includes an extra 1% for the buyer's agent, we can certainly consider structuring the close that way, but I may or may not play along. The buyer can also structure the closing to ensure that the seller gets paid correctly, and the buyer's agent gets what they want. IT's only a big issue if the buyer is trying to buy more property than they can really afford, and don't want to, or can't, come up with an extra $5,000 for the 1% I am not going to cover as seller, assuming a $500,000 offer.
"Net Proceeds." Focus on what your bottom line will be after commission.
Pay 3% or 10%, if they can deliver the bottom line you want.
Agreed. To the other points, we don't know what the buyer obligation is. If there is a contract stating she is guaranteed 3% on the purchase it could be the buyers themselves wanting it covered. Of course we don't know what the case is but I'm just playing devils advocate that there are alternatives that you may not be considering.
Hence, I agree with Mike J and say just focus on your bottom line. If you're happy take it and move on with your life. Don't stress about things that matter little if you're happy with your net proceeds.
While commissions are negotiable and we are told to say there is no "standard", what is common for buyers agents in your market? Your agent may have done you a disservice if they let you offer less than is "normal"?
As a seller, sure I can. The contract between the buyer and the buyer's agent is really none of my concern. Now, if the buyer makes an offer that says that the offer includes an extra 1% for the buyer's agent, we can certainly consider structuring the close that way, but I may or may not play along. The buyer can also structure the closing to ensure that the seller gets paid correctly, and the buyer's agent gets what they want. IT's only a big issue if the buyer is trying to buy more property than they can really afford, and don't want to, or can't, come up with an extra $5,000 for the 1% I am not going to cover as seller, assuming a $500,000 offer.
You are 100 percent correct that this is not the sellers responsibility and I do see the point you are making. I think there are other people on here that don't understand the situation as well as you do. The potential problem the OP has is that the buyer may walk now that they have figured out that this house is going to cost them more than they thought it would and I think its why this thread was made.
As a seller, sure I can. The contract between the buyer and the buyer's agent is really none of my concern. Now, if the buyer makes an offer that says that the offer includes an extra 1% for the buyer's agent, we can certainly consider structuring the close that way, but I may or may not play along. The buyer can also structure the closing to ensure that the seller gets paid correctly, and the buyer's agent gets what they want. IT's only a big issue if the buyer is trying to buy more property than they can really afford, and don't want to, or can't, come up with an extra $5,000 for the 1% I am not going to cover as seller, assuming a $500,000 offer.
It is your concern if it affects you selling your property though. Easy to preach when it isn't your money and life you're preaching about.
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