As a buyer, if you don't use a broker, can you use that for price negotiation? (sales, selling a house)

[WTBWestside]

Since the seller has to pay for the buyer's broker, can you negotiate on price if you don't use one? I assume they price all of that in their listing price so it's probably easier to not deal with writing another check for someone and selling for lower.

[Nodpete]

Why in the hell would a seller pay for a buyer's broker ? Since when did that start ? You didn't hire them so why would you pay ?

[Joe Van Fossen]

Originally Posted by WTBWestside

Since the seller has to pay for the buyer's broker, can you negotiate on price if you don't use one? I assume they price all of that in their listing price so it's probably easier to not deal with writing another check for someone and selling for lower.

Unless the listing contract has a dual variable rate of commission, it's not going to make a difference to the seller -- though it might to the listing agent.

Originally Posted by Nodpete

Why in the hell would a seller pay for a buyer's broker ? Since when did that start ? You didn't hire them so why would you pay ?

Usually the commission is paid to the listing agent, who then splits it with the selling agent.

[ProjectMersh]

Originally Posted by Nodpete

Why in the hell would a seller pay for a buyer's broker ? Since when did that start ? You didn't hire them so why would you pay ?

In California the seller pays the commissions. It is usually written in the listing contract that the seller signs with agent/broker, it comes out of the proceeds of the sale.

So the Buyer does not pay a commission directly to their agent. Buyers purchase the home, the seller pays a commission to their agent based on the sales price. The seller's agent splits his/her commission with the buyer's agent.

[WTBWestside]

Originally Posted by Joe Van Fossen

Unless the listing contract has a dual variable rate of commission, it's not going to make a difference to the seller -- though it might to the listing agent.



Usually the commission is paid to the listing agent, who then splits it with the selling agent.

Sorry to be naive and uneducated... I'm still unclear of how it all works.
Would you be able to get into this deeper? If the seller has to pay for the buyer's agent's commission, how come it would not be conducive to lower the price for a buyer who does not use a broker so that the seller can avoid paying this?

[Nodpete]

Originally Posted by ProjectMersh

In California the seller pays the commissions. It is usually written in the listing contract that the seller signs with agent/broker, it comes out of the proceeds of the sale.

So the Buyer does not pay a commission directly to their agent. Buyers purchase the home, the seller pays a commission to their agent based on the sales price. The seller's agent splits his/her commission with the buyer's agent.

OK, thanks for clearing that up. I've never used an agent for selling a house so didn't know that.

[MovingAloha]

Originally Posted by WTBWestside

Sorry to be naive and uneducated... I'm still unclear of how it all works.
Would you be able to get into this deeper? If the seller has to pay for the buyer's agent's commission, how come it would not be conducive to lower the price for a buyer who does not use a broker so that the seller can avoid paying this?

The listing agent is working for the Seller, not necessarily the buyer. The Listing Agent can get the okay of the Seller to Dual Rep, but the Buyer should be clear that it is not necessarily in their best interest nor is it necessarily going to follow that the Seller will lower their price, why should they?

In Dual Rep situations, the Agent will have to basically be neutral in the negotiations (sorta); it has, at least in my experience, not been beneficial to the buyer.

Listing Agent works for the Seller
Buyer's Agent works for the Buyer

[GoBears98]

Oftentimes the listing agent will serve as a dual agent for an unrepresented buyer and offer a discount on the buyer agent's commission side. This way the seller's total commission payout is less and his net gain increases.

As an example, here in LA, the listing agent receives a 2.5% commission for selling a house. A buyer's agent receives a 2.5% commission for procuring a buyer. The total commission paid by the seller is 5% in this scenario. The listing agent may offer a "broker advantage" in a dual agency in which he will represent a potential (unrepresented) buyer for just 1% or 1.5% instead of the additional 2.5%.

Thus the seller will pay out less than the 5% (2.5% each side) if such an advantage was negotiated.

To go back to the original question, you are always able to negotiate. You can talk to the listing agent and say that you'll write the offer through them under the condition that they pay some or all of your closing costs. Ultimately, it's about the numbers and the seller will want to make sure their net sales proceeds are as high as possible

Or if you'd feel more comfortable have your own agent, you can find a rebating buyer's agent who will rebate back a portion of his commission towards your closing costs or a price reduction.

Sorry, a lot of information. Let me know if that makes sense.

[Mack Knife]

Originally Posted by Nodpete

Why in the hell would a seller pay for a buyer's broker ? Since when did that start ? You didn't hire them so why would you pay ?

You are paying for them, follow the money.

The seller never pays for anything, the buyer pays. It works that way in business and personal transactions where something is bought and sold.

You can explain it ten different ways, in the end, the buyer pays.

[jm1982]

You could also try buying a house directly from a home owner. You go through escrow of course.
In that case no brokers or agents get a commission of the sale.

It's not the norm but these deals do happen.