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I am moving from out of state and really appreciated all the help my buyers agent gave me in terms of condo developments, knowing what I was looking for and previewing for me, handling the inspection and follow ups etc.
She is worth every penny that my seller is paying her
I recently had a similar dilemma. In my case, the purchase was for new construction. Leaving 2.5% on the table for the builder was absurd. Securing a buyer's agent for the minimal work to be performed - I'd already researched the area, home, market, etc. and live in the area I selected - the commission seemed far larger ($/hour) for the effort involved. It was a lot of money to pay someone when the legwork had already been done. I didn't need to be driven around or handheld - just someone to handle the final negotiation/purchase agreement (again new construction).
In the end, I found a discount broker who assisted me. Although, I think the final agent payout will be larger than the work performed, I'm comfortable appropriate advice was provided if it simply confirmed my own knowledge. The discount points will be applied towards closing costs and my agent retains the remainder.
I don't disagree that an agent is worthwhile to new homebuyer or existing construction scenario, new to area buyer, etc. The agency system is flawed in a way. In some ways discount brokers are frowned upon as if you're getting lesser service. As a consumer, its in my best interest to obtain the best service for a reasonable price. The current commission model doesn't generally afford that opportunity.
As an aside, what was difficult is finding a reputable agent. That was more difficult than settling on a home to purchase.
I have seen many buyer's agent offering back 80% of their commission back to the buyer towards appliances, upgrades, closing costs etc. Typically in new constructions if the buyer does the complete homework and due diligence, it might make sense to go with these agents just to get the commission back rather than let the builder take the sizable amount of money. Assuming a 400k home, Buyer's agent gets 3% which is roughly $12000 and gives back 80%, $9600 to the buyer. I even heard an agent offering 90% back in commissions.
I have seen many buyer's agent offering back 80% of their commission back to the buyer towards appliances, upgrades, closing costs etc. Typically in new constructions if the buyer does the complete homework and due diligence, it might make sense to go with these agents just to get the commission back rather than let the builder take the sizable amount of money. Assuming a 400k home, Buyer's agent gets 3% which is roughly $12000 and gives back 80%, $9600 to the buyer. I even heard an agent offering 90% back in commissions.
But don't get upset if you cannot find an agent that is willing to give up their commission. I see many threads bemoaning this fact because it isn't common for agents to give up their commission. But people get really offended and even call them selfish for not willing to do it.
The norm is don't expect anything back.
Just shop around for a really good buyer agent that has years of experience and listens well to what you want and provides everything you need to find the best house for your budget/wants/needs. Take your time in selecting one and not jump at the first one that answers their phone.
I have seen many buyer's agent offering back 80% of their commission back to the buyer towards appliances, upgrades, closing costs etc. Typically in new constructions if the buyer does the complete homework and due diligence, it might make sense to go with these agents just to get the commission back rather than let the builder take the sizable amount of money. Assuming a 400k home, Buyer's agent gets 3% which is roughly $12000 and gives back 80%, $9600 to the buyer. I even heard an agent offering 90% back in commissions.
Is that even legal? Are realtors allowed to conduct business like that?
I'd bet not, and I'd be extremely wary of any realtor who is not following the rules that govern their industry.
It's much more difficult as a buyers agent (vs. a sellers agent). I know if you're a realtor you're looking for LISTINGS. Buyer's agents have to deal with a lot of crap. They earn that money in my opinion.
If a Realtor is not able to negotiate with you to get their full commission (that they earned) how are they going to be able to negotiate the best sale price for you?
If a Realtor is not able to negotiate with you to get their full commission (that they earned) how are they going to be able to negotiate the best sale price for you?
Just saying....
You should never let a real estate agent negotiate for you. They should be nothing more than a messenger between the buyer and seller. If you are a buyer then there is one rule that you have to follow in order to get the best deal. And that rule is that you have to be willing to walk away. Else the seller will be the one with the deal.
This is a decision the real estate agent can't make for you, and IMO will never suggest it. Because if you do walk, they don't get paid.
By negotiate for you - what I meant was if they area asking X and you offer Y - they need to be able to fight for your Y. Not roll over and say no, you have to pay X.
I am a Realtor in NY - and yes there have been times I have told buyers that a deal was not to be made on a certain house, and we had to move on to the next - so do not agree with your statement above.
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