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We've been househunting long distance for over a year and working with an agent there. We even put a house under contract last fall, one week before the election. Then got anxiety and backed out. We're househunting again with her, but haven't yet been back up to view houses.
This is the situation- my son works in that town in the summer and has learned of a house coming to market. It seems like the seller is not working with an agent, at least yet. She says she hasn't advertised it yet and she won't be selling it until early September, but she seems quite happy to have potentially found a buyer. She's given us a price and it's really good for that neighborhood. We've seen pictures of the house on Zillow (and my son actually rented from her for the summer before.)
My question is- how does this work? We'd like to move on this soon, but can our agent handle everything? Who pays the commission? Would asking her to accept 3%, and to split that between us and the seller, be reasonable? Thanks for any insight!
My question is- how does this work? We'd like to move on this soon, but can our agent handle everything? Who pays the commission? Would asking her to accept 3%, and to split that between us and the seller, be reasonable? Thanks for any insight!
Talk to your agent. She can write an offer and have it include the compensation she desires. If you want to cover half of it, that would be a good selling point with the seller.
Talk to your agent. She can write an offer and have it include the compensation she desires. If you want to cover half of it, that would be a good selling point with the seller.
Why would it be a good selling point for the seller to pay 50% of the cost of an agent that is
there 100% to look after the interests of the buyer? That doesn't add up.
That's $9000 on a 300k house. They'd have to do a lot of work to make that worthwhile. That's about the cost of a bathroom remodel. It's over 100 hours of work if the cost were $700 per day (which is a pretty high advisor rate). If they worked 15 hours on this then it would be the equivalent of billing $600 per hour. Insane no matter how you look at it.
Why would it be a good selling point for the seller to pay 50% of the cost of an agent that is
there 100% to look after the interests of the buyer? That doesn't add up.
That's $9000 on a 300k house. They'd have to do a lot of work to make that worthwhile. That's about the cost of a bathroom remodel. It's over 100 hours of work if the cost were $700 per day (which is a pretty high advisor rate). If they worked 15 hours on this then it would be the equivalent of billing $600 per hour. Insane no matter how you look at it.
If the OP has been working with the buyers agent for a while, then the BA has already pUT a lot of time and effort into finding them a home. And finding a home is only part of what a BA does.
Op...let your BA know about house, and set appt togo see it in person, and write offer.
You do not pay the seller any commission out of your BA commission.
Experienced buyers can manage with just an attorney representing them.
All buyers benefit from that.
Quote:
My question is- how does this work?
Do they have the money sorted out? Qualified? Cash on hand?
Then talk to their current family attorney.
Ask him (or others) to recommend an active RE specializing attorney.
Meet. Discuss their views. Prepare a standard contract.
Make their offer.
---
otoh... Do they need help with all the inspections, surveys, loan origination and other hand holding?
They show ask their attorney for the name of an agent to help them.
If the OP has been working with the buyers agent for a while, then the BA has already pUT a lot of time and effort into finding them a home. And finding a home is only part of what a BA does.
Op...let your BA know about house, and set appt togo see it in person, and write offer.
You do not pay the seller any commission out of your BA commission.
Fair point on the effort that the BA may have already expended but the buyer found the home themselves so unless there was an exclusive agreement (which is very unwise), that's irrelevant. Unless it was exclusive you have no obligation - legal, moral, ethical or otherwise to have the BA involved at stupid fee rates in this transaction. I'm sure they'll pull all kinds of BS and make you feel guilty or that you are a snake. It's not like the BA found the home and then the OP was trying to cut them out and go direct. That would be unfair and bad behavior (and not according to the contract) but that's not the case here.
I understand that finding the home is not everything and that's why i asked the OP to assess the likely effort required in this transaction against the cost to determine if it's worth using a BA at 3% commission. The numbers speak for themselves.
It's not only the 3% that's the problem but the whole structure of the thing and what it rewards - in this instance the more the buyer pays for the house, the more commission the BA gets! That's insanity.
RE agents here are advising that you tell your BA about it immediately and let them take it from there. DO NOT not rush to do this as it may complicate things for you later. Once you tell the BA and they start doing work for you on this house, your options reduce very quickly. Trust me, they will jump on this with both feet to establish their stake in it before you can even think about anything. Do you really want to be having a conversation with your BA about your BA not being involved after they've already started doing work on this house for you? That's very poor advice and does not even pass a common sense test. Treat a decision to get them involved now as a decision to pay them commission.
Finally, I have no idea what your last sentence means. Care to clarify?
The agent has put in a lot of work already, including the house we backed out of before. So, while we have bought and sold houses before without an agent, I don't want to do that now. I was thinking that splitting the 3% commission, which would be about $8K, with the seller would be a win win. Seller doesn't have to pay 6% to list the house (and we don't have to face the possibility that a seller's agent would talk her into raising the price she has quoted us), she only has to pay 1.5%. I've seen signs for FSBO's before that say buyers brokers welcome. Does that mean they're willing to pay the buyer's broker a commission?
We're not in the same state as the house we're buying, and the agent knows inspectors, etc. And the seller may not be comfortable doing this without an agent.
Last edited by dogsandart; 07-27-2017 at 01:01 PM..
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She can write an offer and have it include the compensation she desires. If you want to cover half of it, that would be a good selling point with the seller.
