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I'm getting ready to make an offer on a home in Austin, TX.
I don't have a buyer's agent. (Something I've avoided, since having our pockets picked, repeatedly, the first time we bought a home.)
I need to know the best strategy for getting as much of the commission rebated as possible.
As I see it, some of my options include:
1.) Telling the seller's agent we'll forgo representation if he'll reduce his commission to 4% - returning 2% to us.
2.) Going to one of the discount agents who advertise on the web - like this one: Cash Rebate - Flat Fee Listing - Austin Realtor - Mary Liu (http://www.localrealtypros.com/FAQ.html - broken link)
Unfortunately, while the large font says "2% rebate," the small print says "one."
I'd really like to get a 2% rebate on this deal, especially since it'd represent virtually no work whatsoever on the part of the agent who represented us.
Thoughts?
Those MLS discounts are just for the seller(so they can save the cost of a listing agent's commission but still get exposure on MLS)
---BUT they have to agree to pay a buyer's agent a commission, usually between 2-3%
What you should do is make an offer that is as low as you think the price should be after the 2% savings. Then wait for the sellers to counter. If the two of you is within 2% after the seller has countered, then ask the agent to kick in part of the commission to make the deal happen. Actually, this is something the seller should bring up.
I'm one of those sellers using an MLS service and have received lowball offers from a buyer who is represented by an agent. I decided to level with the agent and tell he that if I had to sell for less than X, I was also going to have to lower his commission by Y. But you as the buyer don't have to get into details regarding commissions because it is the seller who generally pays both the buyer's broker and the seller's broker (if there are two brokers), their commissions. Hopefully you have a smart seller who won't be shy about asking the agent to chip in. It would be terrible for you to lose the house over a few percent. If it looks like you might, it might be a good idea to contact the seller directly and suggest he ask the agent to chip in some commissions.
I don't understand. Do I have to pay my agent for finding a house for me?I never did that before only when I sold a house.So if that is true I have to pay one agent for buying a house and another for selling my house. We bought this house three years ago and didn't have to pay our agent. Plus I have not signed a contract with my agent in NC.
No. The seller usually pays all of the commissions from the proceeds of the sale of the house (which comes from the buyer).
Forgive me if I seem a little confused. You have to do a full-appraised value offer in order to get the rebate from the discount buyer's agent???
The house has been on the market some time now without (according to the seller's agent) an offer. According to the agent, no one's even been by to look at, since they reduced the price a couple of weeks ago. My offer is 25K less than their asking price, and 40k more than they paid, three years ago. The bottom line: I really like the house, but I'm not willing to pay what they want for it (or what they say they want).
Since I suspect they will feel a sense of disappointment when they get my offer, I want to offer exactly what the appraiser says it's worth, not several thousand less.
So, no, I don't have to do a full-appraised offer to get a discount from a buyer's agent. But I want to do a full-appraised offer, so that I can maximize my chances of getting the home.
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First of all, in a downward trending market, appraisals tend to come in high.
Yeah, I've thought about that. But prices have seemed too high to me for years, and I've watched them go up and up since then. There are signs that the Austin market is finally starting to cool down, but I have little confidence in my ability to time the market, and my personal situation is that I'd like to live there rather than here. And I'd rather do it sooner, rather than later. I have the means to do it, it's within my price range, and it's really close to exactly what I'm looking for. So I'd like to buy the house - assuming I can get something approaching a fair price on the deal. If the market continues to tank, I suppose I'll just have to accept that.
Nobody really knows what's going to happen in the future. But one thing I know for sure is that right now is a better time for buyers than it was even just a few months ago.
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I think most markets show that sellers are only getting about 90% - 95% of their asking price
In Austin it's supposedly higher. I'm offering 87%, which is quite a bit less.
It sounds to me that perhaps you've had some negative experiences with real estate agents in the past. In actuality Realtors are bound by a code of ethics. The way I see it, a Realtor's financial interests are never contrary to those of his clients. Real estate is a relationship business, similar to doctors, tax accountants, attorneys etc... Once you have have established a relationship with a good Realtor, why use a different one for a new transaction? If I recommend a service provider (home inspector, mortgage broker, contractor...) and my clients are not satisfied, it reflects on me. You better believe I want my clients to have a home inspector who is thorough. If the house fails the test, they'll still buy a different home through me - nothing lost. If they feel I work hard on their behalf they'll, have me list their house when it's time to sell, and recommend me to their friends. This kind of service and dedication doesnt come with commission cuts or discount deals, but those clients get the certainty that their interests are protected in every aspect of the transaction, from start to finish and beyond.
Sandy
Agents are not like accountants, because they work on commission. The incentive is to sell as much as possible, at the highest price they can.
They are like sales-men and -women. They're exactly like salespeople, because that's what they are. They are selling a product. True, it's much more expensive than the products other salespeople sell, but that just means the incentives that much more compelling.
Please don't take it personally. I don't believe agents are bad people.
But relying on an agent when you're buying a house is like asking the 'associate' in the sales-lot how much you should pay for your new car.
I find it interesting that 1) you feel that the broker will be doing NO work representing you. 2) you want part of his paycheck to Work for You.
Just out of curiosity does anyone search for a doctor or dentist in this manner?
BTW In todays mortgage environment, a skilled professional to work in your behalf and represent your best interests would appear to me to be a great value.
I find it interesting that 1) you feel that the broker will be doing NO work representing you. 2) you want part of his paycheck to Work for You.
2) Since when does my money = his paycheck?
I thought fees were negotiable?
1) I never said he would be doing NO work. In fact, I expect him to do several hours of work for me. By my calculations, I expect him (and his broker) to make upwards of $700, for each hour of work he does, if the deal closes.
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Just out of curiosity does anyone search for a doctor or dentist in this manner?
If people don't take price into account, they should. Whenever a service-provider or a salesperson tries to convince you price doesn't matter... watch out. It matters to them, and it should matter to you.
If insurance is paying for it, fine. (Just don't be surprised when your insurance rates go up, and up, and up.)
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BTW In todays mortgage environment, a skilled professional to work in your behalf and represent your best interests would appear to me to be a great value.
Out of curiosity, is there ever, or has their ever been, an environment where agents didn't feel their services were necessary?
The truth is that agents are salespeople, selling a product. My interests... well they're not as important to them as their six percent.
1) I never said he would be doing NO work. In fact, I expect him to do several hours of work for me. By my calculations, I expect him (and his broker) to make upwards of $700, for each hour of work he does, if the deal closes.
If people don't take price into account, they should. Whenever a service-provider or a salesperson tries to convince you price doesn't matter... watch out. It matters to them, and it should matter to you.
If insurance is paying for it, fine. (Just don't be surprised when your insurance rates go up, and up, and up.)
Out of curiosity, is there ever, or has their ever been, an environment where agents didn't feel their services were necessary?
The truth is that agents are salespeople, selling a product. My interests... well they're not as important to them as their six percent.
I apologize, Maybe I misunderstood.
"I'd really like to get a 2% rebate on this deal, especially since it'd represent virtually no work whatsoever on the part of the agent who represented us."
You want to reduce the price of the home by 2% or the agents commission (paycheck)?
Also I'm curious how the listing agents pay would affect how much you're willing to pay for the home, since the seller has already agreed to compensate two professionals to represent the sale?
Typically the buyers agent will work for you for free, the seller is paying the fee, and you benefit from professional representation, negotiation and reduced legal liability as well as having an asset that has a fiduciary responsibility and loyalty to you.
You are correct, All fees are negotiable, maybe I misunderstood and you are the seller in this transaction, otherwise I'm not understanding why a buyer would wish to negotiate the sellers fee for the sale.
I apologize, Maybe I misunderstood.
"I'd really like to get a 2% rebate on this deal, especially since it'd represent virtually no work whatsoever on the part of the agent who represented us."
You want to reduce the price of the home by 2% or the agents commission (paycheck)?
I want to pay less than the full six percent commission.
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Also I'm curious how the listing agents pay would affect how much you're willing to pay for the home, since the seller has already agreed to compensate two professionals to represent the sale?
The agents' commissions represent a transaction cost, like mortgage broker's fees and title company charges. I want to pay as few transaction costs as possible. Since the agents' commissions are by far the largest transaction costs, that's where I can get the greatest savings.
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Typically the buyers agent will work for you for free, the seller is paying the fee, and you benefit from professional representation, negotiation and reduced legal liability as well as having an asset that has a fiduciary responsibility and loyalty to you.
The buyer's agent does not work for free. He gets paid (usually) 3% of the price of the house. That 3% comes from me. Since I don't need someone to drive me around, or steer me to his own listings, or to convince me to buy outside my price range, I'd like to pay less than MSRP.
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You are correct, All fees are negotiable, maybe I misunderstood and you are the seller in this transaction, otherwise I'm not understanding why a buyer would wish to negotiate the sellers fee for the sale.
Because it's my money that's paying the fee.
In other words, I want to pay less for the same reason you want to get paid more.
IF you can negotiate a lower price, why not do it? Basically you think the home is overpriced because the agent is being paid; however, since you don't have representation you can't get the seller to lower his price unless you offer to buy it without an agent, and convince the sellers agent they are being paid too much for producing you, a ready willing and able buyer. I'd say the agent has done a great job marketing, and deserves his fee, if you can close.
The seller is paying the fee, it would go into his bank account if he didn't pay it and you paid the same amount for the home, and the HUD would show this to be true.
You want to pay the agent less, offer a lower price.
I'm not a salesman...lol...I personally don't care what my clients buy, I couldn't pick a home for my clients if I tried. Homes sell themselves.
I feel sorry for the original poster here because somehow this thread turned into a bunch of people doing everything but answer his question.
Anyway, I too had trouble getting sellers' agents to pay me any or all of the buyer's agent fee in my negotiations. So, I resorted to using Congress Realty (I'm in Austin, TX too). They rebate me 76% of the buyer's agent commission, and really, I get more than I need out of the deal. They will set up an automated search filter, take me around to homes, and assist in the offer process.
I was already using Congress Realty to list my old house for sale when they rolled out their buyer's service.
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Homes sell themselves.
Either misunderstood or misguided...
