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And yes I know people can look on the internet. I meant as far as actually getting inside the house to see it in person.
The buyer in any case pays an agreed upon price, so they shouldn't care what part goes to the seller and what to the realtor. The one that would save money by not using an agent would be the seller.
I appreciate any replies, just trying to see the logic in this.
The two main reasons I've heard are:
1. They are more experienced buyers and will use a lawyer to go over the paperwork.
2. They "think" since they are not using an agent that THEY should get a discount on the price.
There are heated discussions and arguments on this topic. Some buyers and agents on here believe that the buyer is "really" paying the commission since they are the ones paying for the property which is where the money comes from to pay the agents.
The flip side to that is the buyer is NOT paying the commission since the money comes from the SELLER's side of the proceeds received.
The buyer is purchasing the property. There is no added price to the property to compensate for the agents commission.
The buyer can offer what ever they feel is FAIR MARKET VALUE and the seller can decline, counter or accept.
IMO the SELLER is paying the commission since it is coming out of the proceeds they received from their home. The buyer is not purchasing the property PLUS having to pay 3,4,5,6% EXTRA for the agents commission.
Last edited by behindthescreen; 09-05-2011 at 01:16 PM..
1. They are more experienced buyers and will use a lawyer to go over the paperwork.
2. They "think" since they are not using an agent that THEY should get a discount on the price.
There are heated discussions and arguments on this topic. Some buyers and agents on here believe that the buyer is "really" paying the commission since they are the ones paying for the property which is where the money comes from to pay the agents.
The flip side to that is the buyer is NOT paying the commission since the money comes from the SELLER's side of the proceeds received.
The buyer is purchasing the property. There is no added price to the property to compensate for the agents commission.
The buyer can offer what ever they feel is FAIR MARKET VALUE and the seller can decline, counter or accept.
IMO the SELLER is paying the commission since it is coming out of the proceeds they received from their home. The buyer is not purchasing the property PLUS having to pay 3,4,5,6% EXTRA for the agents commission.
I would love to see proof of that last point.
The difference between who pays and who bears the cost is huge.
Why do nearly all sellers introduce their brokerage expense into the transaction and put the buyers in the position of paying interest on it? Not all sellers need a sale to cover expenses. The reason is that buyers do not typically have the needed cash, and cannot contract to pay their broker POC. They need the shell game of "Seller Pays, so it is FREE to you," and they need all their ready cash to leverage the purchase.
When a buyer of any commodity, service, or product is able to avoid the cost of the seller's overhead, then the seller pays.
If the overhead chosen by the seller is baked into the price, the seller may make the payment, but the buyer most assuredly bears the cost.
It all reminds me of being a kid and buying Mom a Christmas gift after she gave me the money. I paid! Ri-i-ght....
If overhead could be lowered by the seller to lower the price to the buyer and make the property more competitively priced in the market without altering the seller's net proceeds, why/how would a seller benefit from paying higher overhead?
To clarify for the OP:
A great many people do not understand agency relationships, benefits, and costs.
Additionally, many people feel they have been burned in agency relationships in prior transactions.
And there are a ton of grifters out there who would love to exclude the agent to take advantage of you, if possible.
Personally I fall in the camp of the sellers are the ones who pay the commission, not the buyers. Probably has something to do with the big check I had to bring to closing on the sale of my last home.
2. They "think" since they are not using an agent that THEY should get a discount on the price.
My main "issue" with this line of thinking is that the buyer has no clue how low a seller was willing to go in the first place. And without knowing that bit of information a buyer has no way of knowing if the got an "extra" discount by not using their own realtor or not.
My main "issue" with this line of thinking is that the buyer has no clue how low a seller was willing to go in the first place. And without knowing that bit of information a buyer has no way of knowing if the got an "extra" discount by not using their own realtor or not.
That is a whole other discussion
They mainly want to "think" they got a deal and did it themselves.
They mainly want to "think" they got a deal and did it themselves.
Certainly the price will play into things...
but I really don't think that's the main motivation for most. Not by a long shot.
Far more significant is the value of having one less cook in the stew at every step in the process...
and especially at the latter stages once the offer contract is prepared.
Most RE people take the exact opposite view about the value of their contribution to the process.
c'est la vie.
---
I was also among those who got into this last time...
and similarly have no desire to get flagged and in trouble again by the MODS for articulating contrary views.
We are trying to sell our home. We have heard comments from people who are looking that they do not want a realtor. We have a realtor and have every intention of keeping her. It is the seller who pays the commision, so to me this makes no sense. Do shoppers not realize this? Also, how would they be able to even look at places, without a realtor, except fsbo?
Thanks for your ideas.
While I do not have the exact answer for you, I do have things for your consideration:
1. In general, realtors are not well trusted especially in this market where many are starving.
2. Rarely does the listing agent sell the listing. Usually there will be some commission splits going on be it with a buyers agent or not does not matter to you. You agreed to a maximum commission, so let them "sluts" argue out how to split your money.
3. The real estate market has tried to confuse/screw us up with this seller/buyer agent stuff. Few understand the differences and in many cases, there are no differences. Let them figure out the split as in above #2.
4. You have listed your house and that agreement should/must be honored no matter what anyone else likes/dislikes.
5. A buyer that says they do not want a real estate agent involved is either naive (especially since it is already listed with one) or trying to talk you down the agents commission yet you still have to pay the agent(s).
6. You have listed your house for sale (for whatever reasons) so now just live (like it or not) with what you have done.
7. When I sold my last home, I would/did personally show it to some people myself but I made it clear it was listed with an agent and eventually that agent would be involved.
So, for now, sit back, let the agent earn their money and be prepared to lower, lower, lower the price to make it happen.
We are trying to sell our home. We have heard comments from people who are looking that they do not want a realtor. We have a realtor and have every intention of keeping her. It is the seller who pays the commision, so to me this makes no sense. Do shoppers not realize this? Also, how would they be able to even look at places, without a realtor, except fsbo?
Thanks for your ideas.
People can look at homes without a real estate agent. Not really a problem at all, actually. Just call the listing agent, make an appointment to see the house through them. When the question comes up, as it invariably will, simply tell the listing agent you are an unrepresented buyer and plan to remain so. No big deal.
As to why? Some people have the experience & knowledge to represent themselves in the transaction, and choose to do so. Some people THINK they have the knowledge, and they have the right to make that mistake too.
As a seller, don't worry about whether the buyer wants an agent or not. You & your agent should focus on the offer they make and the terms thereof. No one can force, or shoud have any interest in forcing, a buyer to have any representation they don't want.
My main "issue" with this line of thinking is that the buyer has no clue how low a seller was willing to go in the first place. And without knowing that bit of information a buyer has no way of knowing if the got an "extra" discount by not using their own realtor or not.
It's called a negotiating point!
I'd rather pay a set price to a lawyer to go over the paperwork vs pay someone based on how much they DON'T save me!
And to those who don't think that the purchaser pays... Go back to basic economics class and look into how taxes on items are passed on to the consumer...
Or do you think Wallmart etc eats the taxes?
Same thing... All expenses are rolled into the final product.
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