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Now before you jump down my throat, what I really mean is they should be restructured on the buyer's agent side.
Both the sellers agent and the buyers agent are going to split the commission right? So its in both their best interest financially to get the highest price possible for the home.. this makes zero sense to me!
Personally, I think the buyers agent should get a large percentage on the money he saves the buyer off the asking price.
So for example:
In the current situation.. A home on the market for $300,000 gives the selling Realtor a commission of 3% of the sale or $9,000 and the buying agent a commission of 3% or $9,000. So its in both their best interest to sell that home for $300,000 vs say $275,000 dropping both their commissions down to $8,250. So whats the buying agent's motivation for getting a lower price???
What I think should be done is the selling agent gets their 3%, but the buyers agent should get like 40% of whatever is saved off the asking price. This way the seller's agent is really trying to get the highest price for the house, and the buyers agent is really trying to get the lowest price for the house.
This makes WAAAAY more sense to me.
And I realize there are contracts and stuff saying "I'll work my best to get you the best price" but c'mon, at the end of the day thats really just an honor system, I wanna know my agent is trying to make both of us as much $ as possible and we're 110% on the same team.
So its in both their best interest to sell that home for $300,000 vs say $275,000 dropping both their commissions down to $8,250. So whats the buying agent's motivation for getting a lower price???
There motivation is that they want the deal. If you say you won't go over $275K they have to try to make it happen. The difference is $750 less or nothing in commission and you move on and buy a different home.
Now before you jump down my throat, what I really mean is they should be restructured on the buyer's agent side.
Both the sellers agent and the buyers agent are going to split the commission right? So its in both their best interest financially to get the highest price possible for the home.. this makes zero sense to me!
Personally, I think the buyers agent should get a large percentage on the money he saves the buyer off the asking price.
So for example:
In the current situation.. A home on the market for $300,000 gives the selling Realtor a commission of 3% of the sale or $9,000 and the buying agent a commission of 3% or $9,000. So its in both their best interest to sell that home for $300,000 vs say $275,000 dropping both their commissions down to $8,250. So whats the buying agent's motivation for getting a lower price???
What I think should be done is the selling agent gets their 3%, but the buyers agent should get like 40% of whatever is saved off the asking price. This way the seller's agent is really trying to get the highest price for the house, and the buyers agent is really trying to get the lowest price for the house.
This makes WAAAAY more sense to me.
And I realize there are contracts and stuff saying "I'll work my best to get you the best price" but c'mon, at the end of the day thats really just an honor system, I wanna know my agent is trying to make both of us as much $ as possible and we're 110% on the same team.
...or am I crazy?
A negotiated price difference from 300k to 275k, will net a difference of $750 on a commision around 20k. It is highly unlikely that they will collude to get the highest price possible. The reality is they want the home sold so they get a commission.
What you are suggesting doesn't make much sense because the BA will just steer clients to overpriced listings. I don't see much value in what you are proposing, what I do believe is that the fact that listings agents pays Buyers agents commission is anti-competitive in that the broker is forcing the consumer to buy for a buyers agent whether he or she uses one or not, and that the broker themselves is setting the market rate for this service. .
When most houses sold for $30,000, six percent seemed an ok commission to pay. Now that you might sell a house for $850,000, that same 6% seems absurdly overpriced for the amount of work done. I'd like to see something on an escalating scale (or maybe de-escalating scale) as the price goes up. Or maybe the owners of these high-priced houses negotiate something lower from a realtor?
When most houses sold for $30,000, six percent seemed an ok commission to pay. Now that you might sell a house for $850,000, that same 6% seems absurdly overpriced for the amount of work done. I'd like to see something on an escalating scale (or maybe de-escalating scale) as the price goes up. Or maybe the owners of these high-priced houses negotiate something lower from a realtor?
Not all areas have 6% standard commission.
The pricier the property, the higher the marketing costs
Now before you jump down my throat, what I really mean is they should be restructured on the buyer's agent side.
Both the sellers agent and the buyers agent are going to split the commission right? So its in both their best interest financially to get the highest price possible for the home.. this makes zero sense to me!
Personally, I think the buyers agent should get a large percentage on the money he saves the buyer off the asking price.
So for example:
In the current situation.. A home on the market for $300,000 gives the selling Realtor a commission of 3% of the sale or $9,000 and the buying agent a commission of 3% or $9,000. So its in both their best interest to sell that home for $300,000 vs say $275,000 dropping both their commissions down to $8,250. So whats the buying agent's motivation for getting a lower price???
What I think should be done is the selling agent gets their 3%, but the buyers agent should get like 40% of whatever is saved off the asking price. This way the seller's agent is really trying to get the highest price for the house, and the buyers agent is really trying to get the lowest price for the house.
This makes WAAAAY more sense to me.
And I realize there are contracts and stuff saying "I'll work my best to get you the best price" but c'mon, at the end of the day thats really just an honor system, I wanna know my agent is trying to make both of us as much $ as possible and we're 110% on the same team.
...or am I crazy?
It is the Listing Agent's responsibility to get the highest price possible for his/her client. (Within reason). It is the Buyer's Agent responsibility to get the lowest possible price on that very same property (within reason).
So you have two opposing forces.............meeting somewhere in the middle.
It is no different than any other contractual negotiation.
That's it. There's no reinventing the wheel.
I say within reason as you're not going to sell a house for $850K if it comps for $670K. Likewise, if you've been approved for a $300K mortgage and have $50K to put down..........you're not buying that $475K (per comps) house for $350K.
What I think should be done is the selling agent gets their 3%, but the buyers agent should get like 40% of whatever is saved off the asking price. This way the seller's agent is really trying to get the highest price for the house, and the buyers agent is really trying to get the lowest price for the house.
This makes WAAAAY more sense to me.
...or am I crazy?
If we can't be trusted under the present system then why do you think we wouldn't use this new system to rip you off even more?
Soooooo, the OP proposes that all listing agents underprice houses to ignite auction fever, and let the buyers' agents work for free because nothing would ever sell below list price.
This kind of stuff has been bandied around here routinely. Ain't nuttin' new under the sun.
That is a total lie, a million dollar home goes on the mls just the same as the rest. You can only put up so many signs and flyers. At the end of the day its a fleece and people are catching on.
Quote:
Originally Posted by ocngypz
Not all areas have 6% standard commission.
The pricier the property, the higher the marketing costs
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