Seller's Market - Buyers Paying Broker Fees? (sale, real estate)

[TerryTurtle27]

Does any one know if buyers are now paying half (3%) of the broker's fees? I know that this is a seller's market. Last time it was a seller's market, buyers were paying for the buyer's broker fee.

Thanks in advance.

[Captain Bill]

Originally Posted by TerryTurtle27

Does any one know if buyers are now paying half (3%) of the broker's fees? I know that this is a seller's market. Last time it was a seller's market, buyers were paying for the buyer's broker fee.

Thanks in advance.

I have not seen that happen. What we see is the buyer paying the seller a higher price for the home.

Also, the commission should never be negotiated within a purchase contract because that can raise some serious legal issues.

The listing agreement is a contract between the seller and the sellers agent that sets the fee. The new listing agreement form, due to become effective sometime in July, now has a field that specifies the fee the listing agent will offer to the buyers agent.

When the listing agent places that fee amount on the mls sheet, that becomes a contract between the listing agent and the buyers agent.

• In order for the buyer to pay the buyer agent fee, and the seller only pay the listing agent fee, the listing agent and seller would need to agree to an addendum to the listing agreement showing that the seller will only be paying the listing agent fee.

• The buyers agent and buyer would need to sign a buyer broker employment agreement specifying the amount of commission the buyer will pay the buyers agent.

• Then the mls listing sheet would have to be changed to show that the listing agent is paying 0 (zero) percent to the buyers agent.

If not done properly, then there can be some serious legal issues arising.

However, I see no reason to go to all of this trouble, because the net result is almost the same. If the buyer agent commission is 3%, then the seller would save $90 commission on a $100,000 sale by having the buyer pay the buyer agent fee. That's hardly worth the time and effort of negotiating that type of structure outside of the purchase contract, and risking creating some legal issues.

One of the legal problems of dealing with commission negotiations within a purchase contract is this:

If a seller receives a purchase offer meeting all the price and terms of the seller, and the seller elects to counter, asking the buyer to pay the buyer agent commission, that is rejecting the contract and the buyer can walk. The seller has now opened himself up a possible lawsuit from the buyer for attempting to negotiate the commission within the contract. The lawsuit may be for specific performance or monetary damages because the buyers offer met all the price and terms specified by the seller. The listing agent would probably also be sued for writing up that counter offer.

This information is in part from the Arizona Real Estate Law Book written by Michelle Lind, Esq, general counsel for the Arizona Association of Realtors.

Of course they could work all that out verbally, and then amend the listing agreement, the buyer broker agreement, and the mls listing sheet; then write the contract without mentioning the commission. But if one of them backs out of the verbal agreement, then another can of worms is opened.

[lola8822]

Sellers Market?? Right now? In Arizona??? Wait, what did I miss.......Are we talking houses or weed?

[bgray9]

Makes sense to just adjust the purchase price, rather than going through the headache of rejiggering the realtor fees. Much simpler and straightforward.

[AZgarden]

I thought most buyers were signing a buyer's agreement with their realtor, in order for the realtor to go to work for them. Not so? Doesn't this agreement spell out what the buyer must pay the realtor if they successfully find them a home? Or if not, what is that agreement for? Help !!!

[JoeC]

Originally Posted by PhxBarb

I thought most buyers were signing a buyer's agreement with their realtor, in order for the realtor to go to work for them. Not so? Doesn't this agreement spell out what the buyer must pay the realtor if they successfully find them a home? Or if not, what is that agreement for? Help !!!

As far as our agreement with our listing agent goes: She splits her commision with the buyer's agent. If she sells it on her own, she gets the entire amount.

[AZPam]

Originally Posted by lola8822

Sellers Market?? Right now? In Arizona??? Wait, what did I miss.......Are we talking houses or weed?

Yep, the greed is back in full force, just like nobody learned any lessons from the boom in 2005. Bidding wars, multiple offers and homes selling for well over asking price, depending on the price range. Even have had sellers coming back on counters asking for the appraisal contingentcy to be waived. Did we learn nothing?

Inventory is really low. The three zip codes of the Ahwatukee/Foothills area only has 153 actives listings as of this morning. We would normally seel 400-600 for that area.

[AZgarden]

Originally Posted by JoeC

As far as our agreement with our listing agent goes: She splits her commision with the buyer's agent. If she sells it on her own, she gets the entire amount.

I am talking about the buyer's agreement with their own agent who is looking for homes for them to purchase. There is an agreement that the buyer signs which spells out what the agent will do for them and that they give them exclusive rights to find them a house. It might also state that they are liable for the commission, not the seller.

[AZJoeD]

Originally Posted by lola8822

Sellers Market?? Right now? In Arizona??? Wait, what did I miss.......Are we talking houses or weed?

Both

[AZJoeD]

Originally Posted by PhxBarb

I am talking about the buyer's agreement with their own agent who is looking for homes for them to purchase. There is an agreement that the buyer signs which spells out what the agent will do for them and that they give them exclusive rights to find them a house. It might also state that they are liable for the commission, not the seller.

In most cases the Buyers Broker Agreement (BBA) credits the Buyer for commission received from the Seller. So, if the Seller offers 3% and the Buyer agreement states 3% the Buyer is covered, But if the BBA says 3% and the Seller offers only 2.5%, then the Buyer owes the .5%.

Of course all amounts and conditions are negotiable. I have used the BBA where I accept whatever the Seller offers and not hold the Buyer for the additional amount, it all just depends.

Bottom line is commissions are negotiable. If I don't get paid, I won't work for you. (although I have gotten stiffed by a few insensitive jerks who only think of themselves, but that's life).