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I have been finding it difficult to simply schedule showings to view homes in Wisconsin. I have lined up a real estate lawyer, gotten pre-approved and doing the due diligence that a buyer should do before going to see a home in person. But I have run into realtors that will not show me their listings, unless I agree to hire them as my agent. Which creates a dual agency, and the realtor basically becomes an adviser to both parties and can not represent one side or the other. I was even told during my phone conversation that I can not negotiate the realtor's percentage. It clearly states in my real estate school book that your client is your first priority to a detriment to yourself. And when a realtor won't show me a listing because they also want the buyer's commission, they seem to be putting them selves before their client.
Recently I emailed the a listing agent of a home she had listed. Overall it was an easy setup a showing, but near the end of the showing I told her about the problems we have had with just trying to view other home, and I thanked her for showing us this house. I was not expecting this as her reply: because she has showed me the house she was incurring costs and would be entitled to the buyers percentage as well. She next asked me why I should even care since I am not paying for the realtors anyway. I have heard this before, I never have understood it. Because at closing the seller never see's the money that goes straight to the realtors. It comes straight from buyer and goes to them, not the seller.
Here is how I see it (and I can be wrong). Let's say we find a home that we would like to purchase, priced at 150,000. I would contact my real estate lawyer, I'd draft and offer for 140,000. With a line that states that the listing agent will get the full selling portion of the commission. Example if they were doing a 50/50 split on 6% they would get 3% at closing ($4200). That way I am getting a better deal, and the listing agent is still making their earned percentage for the listing. And in many situations I have seen that owners don't have much wiggle room to move around on the price if they purchased the home around the housing bubble, and a 3 percent difference is enough to make the deal work.
Over the years I have worked with many professionals realtors when I was a general contractor. I have sold houses with and without realtors and understand the process. I have a great respect for what realtors do to help people who are unfamiliar with the process of purchasing a home. I am just finding it hard to be a buyer just trying to get in the door to look at homes. Any suggestions or feedback is welcome. Thank you in advance!
Easiest way is you get your own agent and call it a day. Now the seller splits the commission. You have access to any house you want to go see. Yes in the end the buyer pays the commission since he ultimately funds the loan amount/pays for the purchase. It just gets split between seller and agents/brokers but ultimately the buyer pays for it.
You can get your own license but unless you're gonna start selling houses IMO its sort of a waste of time. By the time you add in all your cists vs the commission you're just wasting time. I would only do it if I was going to start doing realty.
Yes in the end the buyer pays the commission since he ultimately funds the loan amount/pays for the purchase.
From this manner of thinking, then one would have to say that the Buyer is paying for everything on the HUD-1 Settlement . As if the Buyer is paying the Seller’s taxes, utility bill pro-rations, etc. It is not correct thinking. Just like it is pre-determined that Seller will pay his property taxes, Seller has pre-determined that with His funds he will compensate those who have helped him or her sell their home. It is His money that is paying the commission.
She next asked me why I should even care since I am not paying for the realtors anyway. I have heard this before, I never have understood it.
Say a house is worth $100k. And if no realtors were involved the seller would get the entire $100k. Yippie!
Now a realtor is involved and the house is put up for sale for $100k and it sells. Now the seller gets $94k after paying realtor commissions, etc. Its simply the cost of doing business and the seller paid the commission because he received less than he would have. That does not equal = the buyer paying commission.
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Originally Posted by Mike_G
Example if they were doing a 50/50 split on 6% they would get 3% at closing ($4200).
Sounds like a wash so they might go for it. But they might not. Doesn't hurt to ask.
Okay, so you're not licensed but you've taken classes in another state. This actually makes you MORE of a liability risk for a listing agent because real estate laws vary from state to state, and you're going be going forward representing yourself thinking you know how things are done, and the listing agent who represents the seller and is legally bound to represent their interests but at the same time be honest with all parties is going to have to double check everything you do to protect their client's interests, something they would not have to do if you had an agent licensed in your state representing your side of the deal and all the things that have to be done to represent you, and the listing agent is taking on additional liability if anything goes wrong because of something you did or did not do because he's the one with the license.
This is one reason why listing agents might not be inclined to pay you for the pleasure of taking on the above.
Unless I, as the selling realtor, know you, I am not going to have you come look at one of my listings without some sort of representation--either by agreeing to 'hire me', or by having your own professional representation.
No offense OP, but there are LOT of quacks out there who will pick up the phone and ask to view a listing. They might be legit; they might be a looky-looky; they might be casing the place; or they might have their own business interests at heart which have nothing to do with me selling a home.
I understand your desire to save a few bucks, and I understand that not all realtors are particularly helpful. But at the end of the day, why make it any more complicated than it has to be?
I believe it's this site which has a whole thread about who "really" pays the commission.
In order for anyone to think that the buyer pays commission, they would have to believe that the price of the property is increased to cover commission. As others have said, this isn't the case! The house is worth X, with or without realtors involved. The sellers lose part of their proceeds as the price for having someone market the property and do all the transactional work. You could just as easily imagine it as seller receiving check for $X (proceeds, not affected by commission) and then turning around and paying the bill for the services of the realtor. It's not a matter of buyer paying more than they otherwise would in order to cover the realtor costs. It's true that if I didn't have to pay a commission I, as seller, could afford to accept less for my house, but that doesn't change its inherent value dictated by the market.
I haven't read all of the responses re: the issue of listing agent wanting to represent buyer. My two cents as a seller - I would NOT want my listing agent insisting on representing the buyer. I would even balk at my listing agent bringing in someone he/she is already representing, because I would prefer not to get into a dual agency situation. (In my area, by the way, listing agents are usually present for showings, anyway, so they are not incurring extra costs in showing buyers a home.) I would, however, want every single buyer who views my house to already be represented by a buyer's agent. This is just an extra layer of protection, suggesting the buyer is very serious and ready to buy, may well have already looked at plenty of other homes, isn't just some weirdo trying to check out my house, etc.. We instructed our realtor to not show to an unrepresented buyer.
Unless I, as the selling realtor, know you, I am not going to have you come look at one of my listings without some sort of representation--either by agreeing to 'hire me', or by having your own professional representation.
No offense OP, but there are LOT of quacks out there who will pick up the phone and ask to view a listing. They might be legit; they might be a looky-looky; they might be casing the place; or they might have their own business interests at heart which have nothing to do with me selling a home.
You see, I just don't get this. *shrug* Of course, every agent handles their business as they see fit, but we would never refuse to show a home to someone just because they were unrepresented. If that was the case, there's two sales totaling $1.4 million that we would have missed in the last two months. One other didn't buy the house they were looking at -- but we were able to guide them into another house in the same neighborhood that we knew was coming on the market. THAT one, we represented them as the buyer's agent -- especially after we educated them on how commissions worked, etc. and were able to demonstrate that yes, our services are valuable.
Basic pre-qualifying of a buyer takes care of most of the time-wasters and crazy people, especially in the high-end market where letters verifying assets, etc. are de rigueur, and, frankly, expected. We've screened out a few questionable "buyers" who were good at name-dropping, but not so good at ponying up with an assets letter. :-) Yes, you'll get some nut jobs occasionally -- but hey, that's the job. Not everyone buys -- even when they are represented.
Yes in the end the buyer pays the commission since he ultimately funds the loan amount/pays for the purchase. It just gets split between seller and agents/brokers but ultimately the buyer pays for it.
The buyer's loan pays for the HOUSE (and maybe whatever closing costs they're essentially rolling into the loan.) In exchange for what they are paying, they are getting something worth exactly what they are paying. Seller is giving up his/her property, in exchange for payment. It's all fair and even. Seller then turns around and gives up some of those proceeds to the realtor, in exchange for services rendered.
Buyer isn't paying for house, and a commission on top of that. If that were the case, sale prices would be reported quite differently and commissions would be less. Commission would be calculated from some lesser amount that the house is actually "worth," and the total sale price (including commission) would vary based on how much a given realtor charges.
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Mis-thought
