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We want to sell our current home next spring and move into a bigger place while the rates and home prices are low. We believe our house is worth about the same now as it was when we bought it (comparable homes are selling around what we paid) and we also have over $50k equity in it. We are looking at a nicer/newer place in the $500's. We have the 20% down payment ready to go so we aren't in a situation where we need to sell first. I understand some agents offer a discount when you use them to buy and sell, but I have some questions on how it works.
1. What kind of discount should I look for? A 1-2% reduction in their split on the sale of our house (so they take 1%, the buyers agent takes 3%)?
2. If I do get a reduced commission of say 4%, would they still try to split it 50/50 with the buyers agent? Would this hurt our attractiveness to these agents?
3. Instead of reduced commission on the sale, can they give me a rebate on the from the commission on the house I buy instead? My research seems to indicate this may not be legal in missouri... for what reason I have no idea.
4. How does a buyers agent justify their commission as a percentage of the price of the house? Does their work actually increase as the price of the house increases? I feel like I'm going to be giving someone almost $15,000 (I know, they don't actually take that whole amount home, so let's say $7,000) for the privilege of driving me around, unlocking doors and then handling the paperwork at the end. That's literally all my last agent did.
There's another thread around here some place (if memory serves me correctly) in regards to agents 'discounting commissions' on multiple transactions with the same client - lots of comments in favor of and lots against cutting commissions...
That being said - I think I'll start by addressing #4 first - buyers agent... honestly, a buyers agent does a lot more than drive around and shuffle a few papers (I'm saying that will all due respect )
There's a lot that goes into it before you even turn the key! And shuffling papers = orchestrating a production.. Not to mention dealing with lenders, inspectors, closing attorneys, etc.
So yes, a GOOD buyers agent is worth their weight in gold.
That being said - In regards to 'cutting commissions', there's several ways that can be done - from the selling side, if I listed your property and received a reduced commission, I could either still split it 50/50 or I could offer 'regular' rate to the buyers agent, and take the cut myself (hoping that I'll get a transaction from driving you around and handing you papers when you buy! )
On the buying side, (I've already briefly described duties), you're not paying my commission, yet you want me to cut it? Please explain that one to me!
Check with some reputable agents and/or closing attorneys in your area and see what the laws/rules/norms are for such situations.
I don't have a problem with my agent getting paid (via a commission) for the work they put into finding and getting me into a house. My issue is that the agent will do the same amount of work regardless of whether I buy a $100,000 house or a $500,000 house. So why do they deserve a larger cut of the pie just because I happen to be able to afford a larger house? Why shouldn't I get a 1% refund for giving them my business?
Quote:
Originally Posted by peachstatehomegal
On the buying side, (I've already briefly described duties), you're not paying my commission, yet you want me to cut it? Please explain that one to me!
This isn't entirely correct. While I am not paying your commission directly, that commission gets factored into the price of the house I'm buying. When I buy that house, I am indirectly paying for that commission.
If all you think a buyer's agent is doing is driving you around and unlocking a few doors why not go without one and try and work out a deal with the listing agent? See if they will take less commission and have the seller's lower the price of the house.
Higher price=more risk. That's what you're paying for. A good buyer agent will save you money most likely. A bad one won't but may rebate you some back.
Higher price=more risk. That's what you're paying for. A good buyer agent will save you money most likely. A bad one won't but may rebate you some back.
You're making thousands more in commission for risk mitigation? What risks exactly are you going to help me avoid as I buy a 500k house vs. a 200k house? I just want to know how buyers agents justify taking that extra commission on more expensive homes if they're doing the same amount of work as they would on a lower priced home. Statistically do more deals in the higher prices fall through?
Can you name one other professional who would do this????? Maybe you can, but I'll be they aren't the best at what they do. . .
(no, I'm not a realtor.)
Note that I'm specifically talking about the case where I am buying and selling through the same realtor. Many other professionals do this... it's called bundling. As in, "use more than one service with us and get a discount". There is no reason why realtors shouldn't be willing to do this. It does not de-value their profession or force them to work for peanuts. It simply entices me and other customers to work with them over other realtors. Because honestly, if I have to pay full commission, I won't use the same agent to buy and sell. I'll use agents who specialize in the neighborhoods I am selling and buying in.
You're making thousands more in commission for risk mitigation? What risks exactly are you going to help me avoid as I buy a 500k house vs. a 200k house? I just want to know how buyers agents justify taking that extra commission on more expensive homes if they're doing the same amount of work as they would on a lower priced home. Statistically do more deals in the higher prices fall through?
Why does a buyer's agent have to justify their commission to the buyer? Isn't the commission set by the seller as to what they are going to pay the buyer's agent? Shouldn't your issue be with the person who set the commission in the first place?
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