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We are considering putting an offer in on a spec home and listing our current home subject to sale. Our agent is both are buyers and listing agent. What are your opinions of asking her to take a lower commission on the listing? What language would be most effective in getting a postive response?
I got this idea from someone on this board who suggested it to me earlier, so please don't get offended. I mainly want to know how common this is and how it goes over with agents. Also any buyers/sellers who were successful with it share your secrets.
We are considering putting an offer in on a spec home and listing our current home subject to sale. Our agent is both are buyers and listing agent. What are your opinions of asking her to take a lower commission on the listing? What language would be most effective in getting a postive response?
I got this idea from someone on this board who suggested it to me earlier, so please don't get offended. I mainly want to know how common this is and how it goes over with agents. Also any buyers/sellers who were successful with it share your secrets.
As a buyer, I would certainly ask the question. As a buyer, if the agent gave in to a reduction quickly, I would look for another agent.........savings would be minimal......work required for both transactions does not change just because one instead of two has the workload..........need to focus on sale and purchase rather then get caught up in this question. Marketing, success rate, and expertise should be the premier question of a realtor. But, as a buyer I would ask the question...and go for a reduction. As a realtor my answer would be I work for x%....... and what other questions do you have?
Much of my business comes from repeat customers, when I'm working with someone over time it's my policy to reduce my side of the commission. I would offer a reduced listing commission but only on my side of the transaction. I would not want to disadvantage you by offering you a reduced commission and then not offering a competitive co-broke commission. So if the bulk of the properties in the MLS were offering 3% co-broke I'd want your listing to offer the same.
I agree wit OCNYISHOME the first question should not be "what's the commission", but "how will you get my property sold" Once you are comfortable that the agent is the right person then discuss the costs.
I have made concessions for my clients that I have both sides. I usually prefer to keep my commission intact for the listing side, but will do a rebate on the purchase side. That way I know that both sides have completed. And my clients like it so they can use the money towards reducing the price of the home, closing costs, buy down mortgage, or (as allowed in our state) cash back after closing (direct from the broker).
As stated, i am still doing double work, but my good clients are worth it.
We are considering putting an offer in on a spec home and listing our current home subject to sale. Our agent is both are buyers and listing agent. What are your opinions of asking her to take a lower commission on the listing? What language would be most effective in getting a postive response?
I got this idea from someone on this board who suggested it to me earlier, so please don't get offended. I mainly want to know how common this is and how it goes over with agents. Also any buyers/sellers who were successful with it share your secrets.
No one should get offended by you asking about a reduced commission. Most of us would think you weren't being thorough if you failed to ask.
Don't think of what you are asking for as a reduction. Go in with the mindset that you are looking for someone to do a job for you. You are simply negotiating the price you have to pay to get that job done. Your first concern is that she is the best qualified for that job. Then, once yo know she's the agent you want handling both of these transactions, you have to see if you & she can agree on what is a fair price for all the work she is going to do. Point out to her that, while there will indeed be two transactions, she will not have the worry of two seperate clients for those transactions. Much of her work & time will be consolidated.
I agree with Bill Keegan...how could a question offend some one, just as a low offer shouldn't offend any one (you could call the low baller dumb or stupid, but if the offer gets accepted that person is al of a sudden a smart person!)
If a realtor is offended and reacts in an improper way, you know that this realtor isn't a person to discuss anything with unless it is something the realtor likes....I rather have a good open discussion even if one or the other doesn't like it, but at least you can discuss it and get a polite answer.
if the agent gave in to a reduction quickly, I would look for another agent.........
I've never understood that. If I'm working with someone on two transactions and they ask for a reduction in my commission and I agree, they should look for another agent? Why? I'm able to size up the situation quickly, look at the pros and cons quickly, know what I'm doing, answer in the affirmative and then get 'penalized' for it? That makes no sense to me. I'm not here to do heavy negotiating
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my customers, I'm there to do it
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my customers. Why would I want stress them out or have an adversarial relationship with them? I'm not saying that you should always reduce your commission or anything, I'm just wondering what is the reasoning behind that train of thought..find another agent.
No agent should get offended by a question so ask whatever you want, and I doubt it matters how you ask it. Might as well be direct. Some agents will, some won't. I know I'm motivated when I'm being paid fairly or more than fairly. Bill said it pretty well and I agree with him 100%.
Will the agent have to do less work than normal to help you sell and buy? Probably not.
Does she have decreased liability in your transaction? No.
Will the agent work the same for you regardless of pay? I don't know.
My suggestion is if she sells your house and doesn't have to pay a buyer agent to work with you on the total commission or if the builder is offering a higher than expected commission rebate the overage. I wouldn't expect her to take below market rates but if there is a higher than expected pay then perhaps she'll work with you there. If not, don't worry about it because it's more likely she's worth the money.
Gold*dust, be careful if your agent agrees to lower their commission, but wants to lower it on your purchase and not on your sale. The problem is that in some states, such as Texas, you have to be licensed to receive a commission. In those states, you would not be able to receive the amount of the commission that your agent agrees to give up. However, you could get the benefit of that commission by having the seller agree to lower their sales price by that amount. But you would have to negotiate very carefully to be sure that you were actually getting the benefit of the commission reduction. For example, if your agent agreed to reduce their commission by $2,000, and you offer $198,000 for a $200,000 home, you probably aren't receiving the benefit of the lower commission because the seller may have gone down to $198,000 even if they had to pay your agent full commission. So in effect, the seller or their agent is keeping the $2,000 that your agent discounted.
I would suggest that you try to get the commission reduction on your sale instead, because it's much easier to make sure you actually get it. Otherwise, the simplest way may be to come to an agreement with the seller on price, and then tell the seller that your agent requires less commission and require the seller to lower the price again by that amount. If you're trading written offers, that may be tough, and in fact it may be easier to get under contract specifying a full commission to your agent, and then during your option period, assuming you have one, negotiate with the seller to reduce the buyer's agent commission specified in the contract (again, assuming it is specified) and to reduce the purchase price by the same amount.
It's actually fairly common to take a rebate on the buying end rather than on the selling end when the same agent is handling both for you (he or she is your listing agent AND your buyer's agent). As long as it is disclosed to all parties and reflected in the HUD-1, it can be done. Most agents that will lower their fee for this reason do it that way because the benefit to them is that, as said above, they are already familiar with you and so a certain amount of the work (though a very small part) is duplicated in the two transactions, but you'd be surprised how many people negotiate the discount on the selling side rather than the buyer's side and then "decide" not to buy after all after they've received the benefit of the agreement but the other party, the agent has not. By having the discount on the buying side, the agent is protected while at the same time the honest client benefits from the discount. Fair to both parties.
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