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I'm not planning on using a real estate agent on the buying process. I found the house myself and have done all the work myself. I feel as though if I bring someone in now, I'd only be giving away about $10K money to the agent for doing basically nothing but going over the paperwork that I feel confident doing myself.
For those that did not use an agent to buy a home, have you used that as a negotiation tool to lower the purchase price or help with the closing costs? Does the seller care if you use an agent or not or will they pay 5-6% to the seller's agent no matter what? Not sure how this works, but it says on the listing that buyer's agent gets 2.7%.
I would just need someone to show me the property again to see if I really want it, and then when I do, another time for the inspection. I suppose I can ask the seller's agent for that.
Getting that door opened is what you're paying for. The selling agent either won't want to deal with you or will try to double end the deal. But who knows they may do it. Unless you go knock on the door and speak straight to the buyer. Neither approach is a guarantee the seller will drop the price
I was actually just going to start a thread about this very situation. The problem you are going to run into is that the seller has a contract with the broker and is obligated to pay the broker a set fee. The broker is likely not going to take any less commission even though you have done most of the buy-side work.
Your best bet is likely going to be to find a buyers agent who will credit back at least 35% of their commission - or ask the listing agent if they will do that if you go through them with an offer.
The seller signs up for a listing with a broker and is told that there is the "sell-side" and the "buy-side", and that the commission has to be what it is to attract buyers agents with buyers. Given the fact that you did most of the work - the seller should have the option of taking that money and using it to get the deal done with you vs. paying a buyers agent for shuffling paper. Better net for either you, the seller, or both.
The way the system is setup now - it's rigged on brokers behalf.
You're completely free to not use an agent in procuring a house; however, you shouldn't expect to get a discount on the price just because you don't have an agent. The seller already has an agent and they've already contracted that agent for a set fee; the seller's agent is willing to split that fee with another agent who brings a client to the table, but at the end of the day, the entire commission has already been agreed upon between the seller and their agent, which is immaterial to your offer. That 2.7% represents the split the listing agent is willing to take out of the total commission only if another agent is involved.
Think about it from the seller's perspective: why should they take money off their asking price just because you lack representation? As well, your offer might actually seem less attractive precisely because you lack representation; unless you're a savvy veteran of the homebuying process, there are a lot of things to look out for that can derail the deal, and your particular situation might require a lot more handholding throughout the process, as well as having much higher potential to fall through.
From your perspective, unless you're an attorney who's comfortable writing their own contracts, I'd be much more concerned that you'd be exposing yourself into losing your earnest money by not correctly writing the contract. Are you aware of all the possible contingencies available to you that would allow you to walk from the contract if things are not to your liking? Do you have your financing already sewn up? Know of reputable inspectors that are available in the timeframe you'd need?
Furthermore, you probably also don't realize that if you ask the listing agent to do anything for you, they'd most likely be placing themselves in a state of dual agency. Their seller may not be okay with that, and may require you to obtain representation, whether you like it or not, as a condition of making the deal. The price you're going to pay is going to contain the full commission paid out to the listing agent anyway, so you're still paying as if you had an agent anyway; might as well use one. At the very least, obtain a flat-fee broker who can review paperwork for you and ensure you're not locked into a poor contract.
Last edited by berniekosar19; 07-21-2014 at 12:15 PM..
Your best bet is likely going to be to find a buyers agent who will credit back at least 35% of their commission - or ask the listing agent if they will do that if you go through them with an offer.
Why would a listing agent do that? Makes no sense, and has no tangible benefit to the seller, who is the listing's agent client that they have fiduciary duty to. You're also completely disregarding the fact that if a listing agent did that, then they'd be entering into a state of dual agency; many sellers are not okay with that and I can see them not allowing it (as well, some states completely disallow it altogether). If I were to discount any of my fee as a listing agent, rest assured it would go to the seller, not the buyer.
You're completely free to not use an agent in procuring a house; however, you shouldn't expect to get a discount on the price just because you don't have an agent. The seller already has an agent and they've already contracted that agent for a set fee; the seller's agent is willing to split that fee with another agent who brings a client to the table, but at the end of the day, the entire commission has already been agreed upon between the seller and their agent, which is immaterial to your offer.
Where do brokers come up with this line of thinking? Are you telling us that a seller would gladly sign up for a listing agreement to pay a buyer-side fee - if no buyer-side agent is involved? Who in their right mind would pay that money if they didn't have to?
It is because agents sell sellers on the fact that they need to offer it - and the way contracts are written by the realtor syndicate, that commissions are presented and sold to an unknowing public.
Buying and selling property is not rocket science. And many times it can be easier when no broker is involved. I am not advocating no representation - but the thought that it is not the concern of the buyer what the seller is shelling out is ridiculous.
Our agent lowered her fee if she brought in the buyer. If she was a 'dual agent', her commission lowered from 6% to 4%. We did have an offer on our house that this was the case, it was a struggle since she new our bottom line and how much money the sellers could afford. Walked away from that deal and waited for the next.
If I were to discount any of my fee as a listing agent, rest assured it would go to the seller, not the buyer.
The seller should have more control over how the commission splits are handled in this particular situation. It should be their decision - not brokers. Contracts need to change and eventually they likely will.
The seller should have more control over how the commission splits are handled in this particular situation. It should be their decision - not brokers. Contracts need to change and eventually they likely will.
You. Make. No. Sense.
Why would a seller want money flowing back to the buyer from the seller's agent?
It's not increasing the sales price, for the seller; the seller is still paying the same commission as before.
What possible financial benefit is there to the seller for their agent, who has a fiduciary duty to the seller, to "rebate" money to the buyer? If there were any "rebate" given from the seller's agent, any monies should be going solely to the seller.
As to your point about how commissions are split, it's very simple: if you don't like the fee an agent is asking for their services, don't use their services. Find an agent that will work for what you're willing to pay.
The commission has already been negotiated so you going in without an agent probably will not help your situation. Remember the seller pays the commision, you do not. The selling agent may ask you to sign a dual agentcy agreement where he will represent you and the seller but that is a fine line to walk for the agent. In my experience if a buyer comes in without an agent it is usually more work for the selling agent and without a signed contract he has no fiduciary requirement to watch out for your best interests even though you may end up asking him for advice.
If the property has not had much action the agent and seller might work out a deal to accept less of a percentage which may translate to you paying less for the property but I suspect you will end up paying more than you would if you had a good agent in your corner.
Do you have an attorney to help you? It is possible to "go it alone" when buying a house but in my experience it is a harder, longer more frustrating road for all involved.
Good luck.
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