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Sorry, but this has already been explained. The fact that you disagree doesn’t mean the point isn’t valid. As pointed out a good argument can be made either way.
I think your attempts to paint this as a black or white issue without recognizing shades of grey (i.e. details) is the cause of your misleading statements. You need to recognize how details can affect the transaction.
It is disingenuous to characterize the transaction any differently.
Quote:
Originally Posted by VickiR
Look back at what you wrote..."the sale price could have been reduced by an amount equal to the buyer agent commission". You REALLY think that is going to happen???
Thanks for the laugh!
Vicki
NRG - We agree to disagree.
Vicki - Note the use of the word "could" and yes I do *really* think that will happen often and I am not the only one who feels this way.
This is recent paper from a leading public policy organization. From Page 21:
Most home buyers have accepted the pervasive myth that their brokers’ services cost them nothing, thus reducing their incentive to negotiate over fees. Yet the fees paid to their brokers are an avoidable cost ultimately paid by buyers, as easily illustrated by a simple example.
A seller willing to accept a bid of $500,000 and to pay a six percent broker commission $30,000, which is typically split evenly between the seller’s and buyer’s brokers’ firms) is, therefore, willing to accept net proceeds of $470,000. Since the seller’s broker’s firm has agreed to accept a net $15,000 commission for its own services, the seller should accept a $485,000 bid if there is no buyer’s broker to compensate. If, however, a buyer’s broker’s firm must be paid $15,000 by the seller, then the seller must demand $15,000 more from the buyer to clear $470,000. Thus, the commission to the buyer’s broker is an “avoidable cost,” which sellers fully shift to the buyer.
Nelson919 - On paper that is how it could happen. But, I still don't see where I would owe any less than 5% commission per the terms of the listing agreement that I signed.
Plus as a seller, I would be highly UNLIKELY to enter into negotiations with a buyer who has no agent. Especially one who offers 2.4% less than my price as "compensation" for not having an agent. I can't begin to imagine the headaches involved! A "rebate buyer's agent" would be better than none at all. I would be just as unlikely to deal with a FSBO as a buyer, or to work with a low price realtor. I had a really negative experience with a Triangle area broker who advertises how much his sellers can save by going with him - enough so that I'd probably avoid his listings altogether when house-hunting.
Nelson919 - On paper that is how it could happen. But, I still don't see where I would owe any less than 5% commission per the terms of the listing agreement that I signed.
Plus as a seller, I would be highly UNLIKELY to enter into negotiations with a buyer who has no agent. Especially one who offers 2.4% less than my price as "compensation" for not having an agent. I can't begin to imagine the headaches involved!
What if the buyer was himself a buyer agent? No headache there. He could easily take care of the typical responsibilities. If he offers you exactly 2.4% less than your asking price and you do not have to pay the buyer agent fee, would you accept?
Clarity!
We now have identified the agenda that would conceal truth.
It springs from a faux-humanitarian, politically-motivated, ivory tower limousine-liberal "think tank" screed that is based in assumptions, attitudes, and aspersions.
I got that inkling earlier, but certainly appreciate the provided clarity.
Now back to practical truth.
1. Commission fees are negotiable.
2. One can logically support a position that on Planet Earth, in North Carolina, USA, either principal in a real estate transaction pays commission costs.
3. Many, many, millions of Americans have NOT lost jobs or homes, and since Realtor fees are negotiable, fees do NOT need to be specified by the government.
What if the buyer was himself a buyer agent? No headache there. He could easily take care of the typical responsibilities. If he offers you exactly 2.4% less than your asking price and you do not have to pay the buyer agent fee, would you accept?
What if the buyer agent/buyer works at a firm that requires that buyer to run all business through the firm and requires a 30%--50% split of the Buy side commission, with a paperwork fee, to cover E&O expenses, etc?
With that amount to be calculated and billed to the buyer if the commission was 100% waived?
That is a very common arrangement.
Would the Buyer offer to remove all the commission, or discount the portion that would go to the buyer after mandatory firm expenses?
What if the buyer was himself a buyer agent? No headache there. He could easily take care of the typical responsibilities. If he offers you exactly 2.4% less than your asking price and you do not have to pay the buyer agent fee, would you accept?
I'm still stuck on my listing agreement. I've agreed to pay 5% commission to Fonville Morrisey - would they then pay the 2.4% to the buyer since he's his own buyer's agent?
This is a fun debate to watch, but you lost me there again.
I'm still at a bit of a loss as to how a buyer negotiates the commission to be paid to his Buyer's agent if (a) that commission is specified in a contract he's not a party to (the listing agreement), and (b) it's not even really paid by the Buyer (oops, stepped into that one, didn't I?) but rather a split of the commission the Selling Agent is receiving.
The other point that I think is missing here, is that your agent is typically doing more than just listing the home in MLS. They are actually working very hard to sell your home, and sell it at the highest value possible. You are paying them for their service, which, if you have a good agent, is worth every penny. I think it is the same in many other businesses as well.
For those that got married, did you cater your own wedding? Could you have? Could you have done it, and saved a lot of money? And, was it worth it to have someone else do it the right way for you?
This is a fun debate to watch, but you lost me there again.
I'm still at a bit of a loss as to how a buyer negotiates the commission to be paid to his Buyer's agent if (a) that commission is specified in a contract he's not a party to (the listing agreement), and (b) it's not even really paid by the Buyer (oops, stepped into that one, didn't I?) but rather a split of the commission the Selling Agent is receiving.
The buyer's agent can have the buyer agree that they will get paid a certain percentage of the transaction, or a set dollar amount. That way if the buyer's agent represents you in a FSBO, you do have to pay on top of the sales price.
This is a fun debate to watch, but you lost me there again.
I'm still at a bit of a loss as to how a buyer negotiates the commission to be paid to his Buyer's agent if (a) that commission is specified in a contract he's not a party to (the listing agreement), and (b) it's not even really paid by the Buyer (oops, stepped into that one, didn't I?) but rather a split of the commission the Selling Agent is receiving.
If you Google "NC EXCLUSIVE RIGHT TO REPRESENT BUYER" you can find some sample forms. I'd imagine that for buyer's agents who offer a rebate, the rebate information is filled in somewhere like Section 12 (just guessing).
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