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My husband & I went to an open house yesterday (in North Hollywood) and liked the house. Our realtor, who we originally liked a lot, has become extremely unreliable. Our contract with her has run out, and we've decided not to renew.
Say we wanted to buy this house we saw today. And say we wanted to use a real estate lawyer instead of a realtor. How does that work in regards to commission? I'm aware that the seller pays the commission. Could we negotiate with the seller's agent to lower his commission therebye lowering the price of the house? Or would the seller's agent somehow take his commission plus whatever commission our realtor would have taken?
My husband & I went to an open house yesterday (in North Hollywood) and liked the house. Our realtor, who we originally liked a lot, has become extremely unreliable. Our contract with her has run out, and we've decided not to renew.
Say we wanted to buy this house we saw today. And say we wanted to use a real estate lawyer instead of a realtor. How does that work in regards to commission? I'm aware that the seller pays the commission. Could we negotiate with the seller's agent to lower his commission thereby lowering the price of the house? Or would the seller's agent somehow take his commission plus whatever commission our realtor would have taken?
A Real Estate Lawyer will need a sales person's License to earn a commission in that capacity. In California, it may not work that way, but in many states, including mine, a License is required to earn a commission for acting in the capacity of a real estate sales person.
A Realtor will not lower its commission on behalf of a buyer (in which they do not have an agreement with), unless the seller was able to void its agreement with the agent and re-negotiate the commission with their agent.
As for as lowering the value: I recommend seeking an Independent Real Estate Appraiser if you want to know the market value. The Appraisal will give you a tool for negotiating with the seller's agent. Also, for additional conditions, you can ask for the Appraiser's consultation on a variety of issues (which will give you insight into pressure points on the value of units and elements; more tools to negoatiate with). For your benefit, the Appraisal and consulting is confidential.
Edited to add: for legal purposes, a real estate Lawyer, with regard to contracts, is a very good idea.
Last edited by Greeenback; 02-06-2011 at 12:25 PM..
I guess you could try. But that is an agreement between the agent and the seller. Also, you never know if you are really getting that discount as you don't know what the seller would be willing to lower the price to anyway.
The seller has a contract with the listing agent to pay them a certain percentage of the sales price to sell their house. That is a contract entirely separate from the contract to purchase the house, and one to which you are not a party, so you can't really interfere legally with that contract (which trying to get the seller to give YOU half of the commission the seller agreed to pay the listing agent in that contract would be). At least, in most states you can't - don't know about California.
The listing agent offers, to a buyer's agent, a portion of the commission that they receive from the seller, in exchange for (a) bringing the buyer and (b) doing the work that is required on the buyer's side of the deal. Chances are really good that the listing agent is not going to be interested in paying you so that they can do more work with more liability for less money.
But you can always try. Just don't go into it counting on the listing agent paying you for the privilege as part of your qualifying for the house at whatever price you offer.
You can always ask. THL is right though. There are two contracts at play here. The listing agent has an agreement with the seller to list and market their home for a specific fee. The listing agent then has a contract with the members of the MLS that says if they bring them a buyer, they will share their fee with them in exchange for the buyer for their listing.
So to answer your question, contractually the listing agent can keep the entire commission, unless their contract specifies otherwise. You can always ask them to alter their fee in exchange for you being unrepresented, but they don't have to.
I COULD go find a real estate agent specifically to buy this house. Then, the seller's agent would have to split the fee with them (3% each). Or, I could hire a lawyer and not use an agent, but I would want, say, 2% of the seller's 6% commission taken off the price of the house.
That way, the agent is still making a 4% commission (more than the 3% he would normally get). The seller isn't losing (or gaining) any money either. And I get 2% off the price of the house.
Wasn't the Open House conducted by the listing agent or another agent from his/her office?
I would believe, therefore, the "open house" invited buyers to the home, and is the procuring cause. Opinions?
The original poster noted a listing agent involved, as well as, an inclusion of a commission. This indicated to me there must be a listing agent (either broker or agent) presently performing an open house. Yes mam, I believe so.
I agree, the open house implied an invitation to buyers (public) to the property in question.
I caught this after reading the original posting again - I had to edit my own posting due to glazing over what what was said; t first, I took it as though "readymade" wanted to use a Real Estate Lawyer as a Realtor. I had to correct my thoughts and post an "EDIT TO ADD."
Readymade looks to have its 'ducks in a row' and asking the right questions.
Last edited by Greeenback; 02-06-2011 at 01:27 PM..
That way, the agent is still making a 4% commission (more than the 3% he would normally get). The seller isn't losing (or gaining) any money either. And I get 2% off the price of the house.
Financially speaking, the agent would be taking a double dip. A lower value will mean a lower commission, on top of a lower commission per percentage wise at 4%. This will be tough to accomplish, financially speaking from a Realtor's point of view.
"...As for as lowering the value: I recommend seeking an Independent Real Estate Appraiser if you want to know the market value. The Appraisal will give you a tool for negotiating with the seller's agent. Also, for additional conditions, you can ask for the Appraiser's consultation on a variety of issues (which will give you insight into pressure points on the value of units and elements; more tools to negotiate with). For your benefit, the Appraisal and consulting is confidential."
Wasn't the Open House conducted by the listing agent or another agent from his/her office?
I would believe, therefore, the "open house" invited buyers to the home, and is the procuring cause. Opinions?
Just meeting someone doesn't mean procuring cause. The listing agent has an agreement with the seller to get a certain fee. That's a given. Procuring cause only has to do with how buyer agents are paid via MLS co-operation. It has nothing to do with listing agreements. Since there isn't a buyer agent involved, procuring cause is irrelevant.
OP, I do encourage you to ask the listing agent about altering their listing agreement before you write an offer. Most agents have a policy about this in place, that way you know what you are dealing with in regard to this issue before you write the offer.
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