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I am going to put up my single family home on the market in Spring. I will use a flat fee MLS. Is a 1% Buyer's reasonable? The home will probably sell for $500K for $5000 buyer's agent commission.
Actually you might think about going the other way and offer 3.5% for a quick sale. I will check out a 1% listing and tell a buyer about it if it is really nice...but run of the mill or over-priced? No way I will bother.
But MLS only brokerage and 1%? Nope. Well I will show it if I run out of everything else. I will however have an arrangement with my client to pay me properly before I do it.
What buyer would ever agree to something like that?
Quote:
Originally Posted by TexasHorseLady
That $5,000 is not the buyer's agent's commission. That is the commission that is split between the buyer and their broker.
Most buyers with agents have a buyer's representation agreement with their buyer that usually specifies how much the buyer's agent will be paid, and here, at least, it specifies that the broker (who receives the commission and then splits it with the agent) will look to the seller/seller's agent first for that commission, and if it's not paid by them (usually in the case of a FSBO who is not willing to pay the buyer's commission), they will look to the buyer for that amount. Buyer's agents might show your house, but their fiduciary responsibility to their client means they are legally required to inform the client that you are paying less and therefore the buyer will have to come up with the rest, per the agreement.
This results in a buyer who is going to look at what they will owe in commission to the buyer's agent and will, quite reasonably, adjust their offer to the seller accordingly. Or, more often, a buyer who will decide just not to look at the house.
Or except for clients who refuse to sign such non sense. So you are saying that as a buyers agent if I as the buyer go out and find some home driving around and put in an offer all on my own I could be sued by the agent? There are some truely nieve and idiodic people out there if they are willing to sign something like that.
Quote:
Originally Posted by Silverfall
Offer what you want. If the agent doesn't like the compensation you are offering, they can have their buyer pay the difference, except for VA clients.
Or except for clients who refuse to sign such non sense. So you are saying that as a buyers agent if I as the buyer go out and find some home driving around and put in an offer all on my own I could be sued by the agent? There are some truely nieve and idiodic people out there if they are willing to sign something like that.
It's called an employment contract. Yes, if you go find the house yourself and you signed something that you are to be represented, yes, the agent is owed a commission for their fee. Independent Contractor.
Or except for clients who refuse to sign such non sense. So you are saying that as a buyers agent if I as the buyer go out and find some home driving around and put in an offer all on my own I could be sued by the agent? There are some truely nieve and idiodic people out there if they are willing to sign something like that.
It is common practice since the 90s to have a buyer agreement much like a listing agreement. This isn't new by any means though not a requirement. I don't get why people think real estate agents don't have a purpose and don't deserve to be paid accordingly. One state makes it easy to FSBO and the rest you are flapping in the breeze if you decide to go it alone. The disclosure requirements alone would be missed by most people who FSBO not to mention screening credit worthiness before accepting an offer.
That $5,000 is not the buyer's agent's commission. That is the commission that is split between the buyer and their broker.
This is incorrect in this situation. Many flat fee services don't split the fee. They charge the fee. Any commission goes entirely to the buyer's agent. The OP indicated he would use a flat fee service.
OP--1% I think that you are being penny wise and pound foolish. Unless your house is in a neighborhood that sells literally overnight and through word of mouth, or your house is so, so special you will not receive the kind of traffic you need to sell.
While most agents won't steer customers away from your house, they also won't make showing it a priority. I also suspect they will consciously or unconsciously find fault with it.
This is incorrect in this situation. Many flat fee services don't split the fee. They charge the fee. Any commission goes entirely to the buyer's agent. The OP indicated he would use a flat fee service.
OP--1% I think that you are being penny wise and pound foolish. Unless your house is in a neighborhood that sells literally overnight and through word of mouth, or your house is so, so special you will not receive the kind of traffic you need to sell.
While most agents won't steer customers away from your house, they also won't make showing it a priority. I also suspect they will consciously or unconsciously find fault with it.
The comment was completely correct. The buyers agent still has a broker and that broker takes a cut of the commission.
Location: Sarasota/ Bradenton - University Pkwy area
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Quote:
Originally Posted by FalconheadWest
You should always specify "in my area" because 2.4% is NOT typical in my area, and even a fee of that will get someone's house not shown because the buyer doesn't want to pay the agent the difference. Yes, fees are negotiable, but a buyer agrees to a fee and in my area, it's more than 2.4% and it's more than 2.9%.
All real estate commissions are negotiable, no agent should be discussing what is typical or standard in their area as doing so may put them in violation of antitrust laws.
Whether an agent would show a listing offering 1% commission may depend on the policy of the broker the agent works under.
My bigger concern as a seller would be whether the flat fee company is giving me (the seller) agent representation in the transaction or are they doing what is known as a "limited" representation i.e. you the seller are on your own for setting up showings, negotiating contracts and everything else between contract to closing. Some people are savvy enough to handle the entire process by themselves. Others are not.
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