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Old 04-30-2018, 04:24 AM
 
17,158 posts, read 22,167,733 times
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ive been on all sides of this ......and some depends on what the price is whether its an 60k property or a 600k property...


a lot in the mix here
from what the agents company norms are to an agent can ask this question but not insist and not be a deal breaker...

the first house i listed .. the owner wanted to sell quickly....i asked what he needed to net....we worked back from that figure and listed his house at 8%.... 4% buyers split the highest buyer split commission
and the owner was under contract within 8 days with a qualified buyer because the buyer agents were motivated with such a high commission

ive also listed at 3% .. the seller was soo proud "to beat down the commission" and not one buyers agent came with a qualified buyer because the commission was so low (comparatively)

just bring a qualified buyer to the listing the agent is doing her job.......she could have seen the low commission split and not even sent the listing to her clients..... and go to higher commission splits ..

here's what no sellers or non real estate folks never seem to care about---- for every property sold....an agent could have put in 50 hours showing other properties with no sales....
for every 6 contracts one may fall apart...

with every commission comes splits and splits and carrying costs....etc..
80-90% of all new real estate agents are not agents/brokers anymore after 5 years.... its because they end up working the 50 hours without getting paid a dollar ....showing properties with no contracts.

.

80% of homes that sell come from buying agents
the buying agents can also play the low commission game and not bring qualified buyers to low commission properties...


we see this all the time the fsbo folks that despise agents...reluctantly sign and list (over 90% of fsbo's end up listing)
then they want to beat down any commission whatever it is...and lets say they succeed- and have the lowest commission splits........ they may have just set themselves up to fail again

and yes...we all know people who can sell themselves or sell at 1 % and found a qualified buyer (on the internet)


if sellers have such an issue with commissions then go fsbo's.... i encourage that let them have fun with the tire kickers and low ballers...



to the op..

the agent can request a higher commission (it may be coming from her company, not the agent, tho the agent has the final say) she can request but not insist. and yes, it shouldn't be a deal breaker.........but also keep in mind- she brought a qualified buyer to the property and for the same reason you think she is greedy asking for a higher commission.....she could have easily passed over this property or filtered it from her buyers which she did not

i wish plumbers and electricians would work for nothing half the time too
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Old 04-30-2018, 04:37 AM
 
595 posts, read 376,554 times
Reputation: 1021
Quote:
Originally Posted by amy_lou View Post
We have a house +acreage and when we chose our realtor, we all agreed that the commission would be 4%. We have a potential buyer, and their agent is stating that she is a "higher end" agent and accepts no less than 3%. I feel like if you're showing our property to your buyers and the notes states 2%/2%, that is what you are going into it knowing. If she's wanting more commission, than should we include that 1% in our counter? I feel like if the buyers want her as an agent, then they need to pay her extra 1% in the sale of the house/property.

Thoughts?
Yes, add 1% to your counter if and when this buyer makes a written offer that will start negotiations for you. If they can't afford an additional $7K, they more than likely are looking at a property that is over their budget.

Stay focused on your "net sale amount." I understand your frustration regarding the buyer's agent 3% commission as "she's a high end agent," your house is a "high end property," so her request is a moot point.

Agent's here (and I'm not one), cannot negotiate commission %'s. The contract states the % and split.

Last edited by photogal9; 04-30-2018 at 05:15 AM..
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Old 04-30-2018, 05:40 AM
 
5,668 posts, read 7,260,887 times
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Quote:
Originally Posted by jackmichigan View Post
That is unlikely. Why? Because in order for a Buyer's Agent to be able to collect a commission from a Buyer, the agreement has to be in writing. It's as simple as that.

To jump on the speculation train, it is most likely that the Buyer's Agent has a written agreement for the Buyer to pay a minimum commission; therefore, her attempt to get the Seller to pay for that commission was in the Buyer's interest. There's nothing wrong with that. However, the tact taken was a crude one that the Seller simply needs to ignore. Extraneous emotional responses need to be put aside and, as always, the net price needs to remain the consideration.

IMO, the agent should be happy with the 2% and simply work to close the deal.
Is that the case in every state? Besides, OP said this was all verbal at the moment, so there may not be an official offer (or buyer agency agreement) yet. I know Iíve seen agents say they donít make potential buyers sign anything until they make an offer.

There would be nothing wrong with what you said provided the buyer is aware of it or maybe even requested it. But the agent should be smart enough to know that the seller listed a certain commission for a reason, and at the end of the day as mentioned they should only care about the net proceeds, so however you slice it, that 1% would ultimately be coming from the buyer. If anything, as also mentioned the buyer would most likely rather it be paid via a higher price so that it can be financed.
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Old 04-30-2018, 05:44 AM
 
Location: Cary, NC
31,592 posts, read 55,307,520 times
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Quote:
Originally Posted by GoPhils View Post
Is that the case in every state? Besides, OP said this was all verbal at the moment, so there may not be an official offer (or buyer agency agreement) yet. I know Iíve seen agents say they donít make potential buyers sign anything until they make an offer.

There would be nothing wrong with what you said provided the buyer is aware of it or maybe even requested it. But the agent should be smart enough to know that the seller listed a certain commission for a reason, and at the end of the day as mentioned they should only care about the net proceeds, so however you slice it, that 1% would ultimately be coming from the buyer. If anything, as also mentioned the buyer would most likely rather it be paid via a higher price so that it can be financed.
That is the crux of buyer agency fees.
Commonly, the buyer has to roll them into the contract price to be able to finance them.
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Old 04-30-2018, 06:14 AM
 
5,668 posts, read 7,260,887 times
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Originally Posted by MikeJaquish View Post
That is the crux of buyer agency fees.
Commonly, the buyer has to roll them into the contract price to be able to finance them.
Of course. Yes, technically in most cases ďthe seller pays the commission,Ē but sellers factor in the commission that needs to be paid to both the listing and buyers agent when determining and ultimately accepting a price. Maybe thatís often 3%, but in this case, itís 2%, so Iím sure the potential buyer would rather pay 2% than 3%.
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Old 04-30-2018, 06:40 AM
 
6,359 posts, read 7,324,210 times
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Quote:
Originally Posted by GoPhils View Post
Is that the case in every state? Besides, OP said this was all verbal at the moment, so there may not be an official offer (or buyer agency agreement) yet. I know I’ve seen agents say they don’t make potential buyers sign anything until they make an offer.

There would be nothing wrong with what you said provided the buyer is aware of it or maybe even requested it. But the agent should be smart enough to know that the seller listed a certain commission for a reason, and at the end of the day as mentioned they should only care about the net proceeds, so however you slice it, that 1% would ultimately be coming from the buyer. If anything, as also mentioned the buyer would most likely rather it be paid via a higher price so that it can be financed.
That's the case in most, if not all, states. I have yet to hear of a state where an agent can collect a commission without a written agreement, but I would welcome being corrected if someone knows of such a state.

Mind you, we're talking about commissions on the sale of a single family residence. (The standard is actually 1-4 units.) Written agreements are not always required when it comes to commercial, or non-residential, real estate. With commercial, state laws are less inclined to have more stringent requirements since there's an assumption that those dealing in commercial real estate are more knowledgeable, hence are less in need of consumer protection.
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Old 04-30-2018, 07:43 AM
 
5,668 posts, read 7,260,887 times
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Quote:
Originally Posted by jackmichigan View Post
That's the case in most, if not all, states. I have yet to hear of a state where an agent can collect a commission without a written agreement, but I would welcome being corrected if someone knows of such a state.

Mind you, we're talking about commissions on the sale of a single family residence.
Does the "agreement that has to be in writing" need to be separate from the contract to purchase the house?
Because if there's a contract to purchase the house I'm sure that within that contract it will state how much the buyer's agent will be paid. But according to OP, that's going to be 2%. I think the question is whether there's a separate agreement between the buyer and the buyer's agent.
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Old 04-30-2018, 10:27 AM
 
6,359 posts, read 7,324,210 times
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Quote:
Originally Posted by GoPhils View Post
Does the "agreement that has to be in writing" need to be separate from the contract to purchase the house?
Because if there's a contract to purchase the house I'm sure that within that contract it will state how much the buyer's agent will be paid. But according to OP, that's going to be 2%. I think the question is whether there's a separate agreement between the buyer and the buyer's agent.
Sales agreements are contracts between Buyers and Sellers, so the contracts stipulating commissions are separate in almost all cases. (Poorly written purchase offers being an exception.) On occasion, mention of a commission may be included in a sales agreement, but that is just to reaffirm that the Seller (usually) has agreed to pay a commission.

On the Sales Contract form often used by Michigan Realtorsģ, that mention appears as such:

"30. SELLER ALSO AGREES to pay the Listing Broker/REALTORģ named above a commission as stated in the Listing Agreement for the property."

The agreement as to the payment of the Buyer's Agent is usually completely separate from the sales contract.
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Old 04-30-2018, 10:30 AM
 
Location: Salem, OR
13,740 posts, read 31,556,293 times
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Quote:
Originally Posted by GoPhils View Post
Does the "agreement that has to be in writing" need to be separate from the contract to purchase the house?
Because if there's a contract to purchase the house I'm sure that within that contract it will state how much the buyer's agent will be paid. But according to OP, that's going to be 2%. I think the question is whether there's a separate agreement between the buyer and the buyer's agent.
Commissions don't belong in contracts between buyers and sellers. Agents are not principals in these contracts. Commissions are a closing cost and can be negotiated that way, but it isn't appropriate to spell out fees in a purchase agreement.

Out here agents wouldn't balk at 2% on a $700k listing. That's $14k to one side.
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Old 04-30-2018, 10:33 AM
 
Location: SW Missouri
15,527 posts, read 29,233,815 times
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Quote:
Originally Posted by amy_lou View Post
We have a house +acreage and when we chose our realtor, we all agreed that the commission would be 4%. We have a potential buyer, and their agent is stating that she is a "higher end" agent and accepts no less than 3%. I feel like if you're showing our property to your buyers and the notes states 2%/2%, that is what you are going into it knowing. If she's wanting more commission, than should we include that 1% in our counter? I feel like if the buyers want her as an agent, then they need to pay her extra 1% in the sale of the house/property.

Thoughts?
A contract is a contract. But I guess it depends on how badly you want to sell. I might go an extra 1% for a full price cash offer, but nothing else.

In my state realtors are required by law to present all offers made. I would contact the board of realtors for your area and determine if there is a similar rule there and if it is legal for realtors to attempt to extort money out of sellers in this fashion. I get the feeling they are doing something unethical, if not illegal.
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