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An experienced Buyer doesn't need an agent. Neither does a Seller. Many choose to work with an agent, however, due to convenience or time saved. As for Buyer's agents, most seem to do more work than Listing agents. When I did more listing, I always considered that to be the easy side.
If threads on C.D. are any indication, most problems dealing with real estate transactions are due to inexperienced Buyers. A good agent--with an emphasis upon "good"--can save a Buyer a lot of headache and troubles.
A good sales agent can save the buyer just as many headaches as buyer agent, plus the buyer would be advised to have the contract run over by a lawyer if he/she is uncomfortable with it. Plus the house inspector / appraiser also protect the buyer.
Again, I don't see the problem
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One thing wrong with this is the implication that there would be a savings of 2-3%. In the OP's case, the potential savings would be 1%. That still may be enough to tip the scale, but it's generally not of the magnitude of 2-3%. Plus, if a Buyer's agent brings a purchaser and enables a deal to close, most would say that is definitely worth it.
Perhaps, but one thing is for sure, if you bring in a unrelated 3rd party to the deal, you are guaranteed to pay that 3rd party 2-3% for sure. So why do it, as a seller, unless you have compelling reason?
There is absolutely no way the agent can have a fiduciary duty to both parties. Personally I think double ended deals should be made illegal to perform.
Agents are people. They can be swayed by greed, personalities, resentment, discrimination.
If I sell a house the agent is to bring all offers. I might draw a line at stupid low offers say 40% less than asking but I’m gonna wanna see all the offers that are made. Good bad and ugly. The agent is not gonna make the decision as to what offers I see.
I don't understand at all.
The agent has a duty to bring the highest offer to the seller, regardless of who is presenting it.
A buyer is guaranteed to cost the seller an extra 2-3% by bringing a buying agent just to present the offer. I don't see how that works out for the buyer or seller.
Is a stellar sales agent going to increase the deal size by 2-3% to compensate for the cost of a buyer realtor?
Is a buyer who brings in a realtor just to present the offer putting his best offer forward to seller by automatically costing the seller an extra 2-3%?
I don't see how that would work out.
Say I'm trying to buy a car from the dealer. I insist that I have to bring in my super duper smart cousin to negotiate for me, but that he will charge an extra 2-3% on the sales price, to be paid for by the dealer. How is that going to work in my favor, or the dealer's favor?
Wow! Thank you. You're awesome. You made me look at this from a completely different vantage point that I didn't even think about. So, I'm now thinking I maybe won't let her bring the buyer, but are you saying I should't let anyone from that brokerage, including their other offices, sell my house either? Sorry, this whole subject has always been sort of confusing to me. I can understand not letting her because how can she act in my best interest by doing that, but I'm not sure about the other agents because they do sell a lot of homes here and they have several offices. There are plenty of other brokerages that sell in here, too, but this one seems to sell more than most. I just don't want to limit my exposure.
I'm definitely in a very strong seller's market. I live in a popular and upscale community, and we have at least 20 different neighborhoods in it. Most are expensive homes, but I live in the least expensive section so if you want to live here, which a lot of young families do now, it's very tough to find inventory under $400k. I think there are maybe, if you're lucky, three homes that are listed now in that price range - that's it - although maybe something has changed since I looked a couple of days ago. We don't have many homes here that fall into that category anyway.
When I was thinking about this last night, it made me also wonder if when you allow the listing agent to bring the buyer, if that means that he/she will try to hold out for someone they can sell to so that they get a higher commission. Maybe that's not the case, but I have to admit that I did think about it.
Thanks again for the great feedback. I truly appreciate it.
The listing agent loses money, if they are reducing their commission, if they have a buyer.
Say the usual comm is 3% listing/3%buyers agent, and they agree to reduce total commission to 5% if they bring the buyer and act as an intermediary.
They get 5%.
But if they sold your house to a different buyer that had their own agent, and sold a different house to their buyer they would get 6%...3 on your listing and 3% on house they have their buyer buy.
Thats assuming they are bringing their buyer to your home...not just having an unrepresented buyer call them on that house or come to open house.
FWIW, i turn down intermediary status if I have a 1st time buyer looking, and will tell them to get an agent. I cant represent them properly and give them the help they should get. Here, both seller and buyer must agree to having an agent act as intermediary. I thoroughly explain it when they list, and give them all of the pros and cons, with the caveat, that i refuse to do it if there is a 1st time buyer involved.
The agent has a duty to bring the highest offer to the seller, regardless of who is presenting it.
A buyer is guaranteed to cost the seller an extra 2-3% by bringing a buying agent just to present the offer. I don't see how that works out for the buyer or seller.
Is a stellar sales agent going to increase the deal size by 2-3% to compensate for the cost of a buyer realtor?
Is a buyer who brings in a realtor just to present the offer putting his best offer forward to seller by automatically costing the seller an extra 2-3%?
I don't see how that would work out.
Say I'm trying to buy a car from the dealer. I insist that I have to bring in my super duper smart cousin to negotiate for me, but that he will charge an extra 2-3% on the sales price, to be paid for by the dealer. How is that going to work in my favor, or the dealer's favor?
This makes very little sense.
They dont increase commission because a buyers agent is involved. When you list a home you have in contract what %you are paying to list it, and how it is split up among buyer's agent/listing agent. If listing agent brings buyer and acts as intermediary, then they still get the total commission unless something else is written into listing agreement.
Most agents collect the full 6%, or whatever is in listing agreement if they work both sides. People wrongly think that they will save $ if they contact listing agent directly. They normally won't, because commission rate is set in listing contract.
Like I said, if the buyer's agent is doing all the hunting for a house and brings a buyer to the sale, the buyer's realtor deserves the commission on the sale.
If the buyer's agent is only brought in to write an offer for the buyer, and bills 2-3% of the value of the house, that's totally not worth it.
If the buyer doesn't feel comfortable for any reason, he/she can hire an attorney to review the contract as written by the seller's realtor (most of which is boiler plate contract language anyway).
And the buyer's realtor is certainly not going to qualify as an appraiser, nor the house inspector for the buyer. That's why the buyer still has to pay the inspector ($300 - $700), and the appraiser ($400 - $600) to protect him/herself.
I'm sure you are a great realtor, but are you going to save the buyer the house inspection fee, and the appraisal fee, by doing all yourself as both of those roles? I doubt it.
And if a buyer needs to be shown that the sun rises in the east, I'm not sure as a seller I'd want to deal with that buyer anyway. Probably would be a real pain to deal with regardless of who represents that buyer.
When I point out dealbreakers and the client decides to walk away, I save them a due diligence fee, an appraisal fee, a home inspection fee, risk of loss of EMD, lost time in a transaction.
Equivalent to thousands of dollars, often on more than one house.
When clients want to offer way to much, and I put my foot on the brake, I save them thousands of dollars. The appraisal fee is peanuts when I talk the client down $5000 or $10,000 on an offer.
"Sun rising in the east?" I could have said it better.
"Morning sun in the east-facing breakfast nook" would have been better.
There is a ton of information for a buyer to filter and comprehend. I help with that. And, I work with many wonderful people with great credit whom you might disqualify for minor foibles. They need housing too.
I didn't want to vote. Agents and situations are different. However, since there is no middle ground I did vote no because if I'm a consumer I only want my agent repping me, unless there is a commission discount for dual agency.
Thank you so much! I really appreciate your excellent feedback from the seller's side. I'm so glad I posted this because it's making me realize more and more that I need to take my agent out of the equation when it comes to bringing the buyer even though it was tempting to save some money. I'm curious, though, did you just not allow your agent to bring the buyer, but other people in her brokerage could bring the buyer? It seems that could also be a conflict of interest because I'm sure the agents talk.
It's not like I'm not capable of negotiating because I was in B2B sales in the financial industry for a couple of decades, but I never had to negotiate price and terms, etc. I had to overcome a lot of objections and negotiate so many other things, and I had more competition than I care to remember. The problem is this is very personal, and I really don't trust myself or my decision making with something like this. I'll be the first to admit that I don't handle things very well at all in stressful situations so I do need someone to look out for my best interests. In fact, I'd be unhappy if she didn't, but this comes from a sales person who always went above and beyond to look out for the best interests of my customers and prospects. I always slept better at night by doing so, and it made me feel good that they trusted me.
I haven't been worried about someone else in her brokerage bringing the buyer and there being a conflict of interest. Never heard of such a thing happening. Not saying it couldn't or doesn't happen but I'm guess that the chances of that happening are pretty slim. Our agent simply suggested, when signing the paperwork, that she doesn't recommend allowing her to represent the buying party as well (so she can provide us as much un-hindered advice as possible), which I was fine with. Could it have reduce our overall costs? Probably slightly, but I was fine with taking that small hit.
They dont increase commission because a buyers agent is involved. When you list a home you have in contract what %you are paying to list it, and how it is split up among buyer's agent/listing agent. If listing agent brings buyer and acts as intermediary, then they still get the total commission unless something else is written into listing agreement.
Most agents collect the full 6%, or whatever is in listing agreement if they work both sides. People wrongly think that they will save $ if they contact listing agent directly. They normally won't, because commission rate is set in listing contract.
Not the way I work. If I am selling a property, and the listing agent is to bring me a contract, we negotiate in advance that the commission will be reduced by 1-2%.
There are way too many realtors in most markets. Due to this saturation, I can pick and choose the realtors whom I want to list my property and agree to my conditions.
Heck, I would feel comfortable doing FSBO and agree to pay buyer agent a 2.5 - 3% commission at this point.
So many people are so afraid of real estate and thinking an agent is somehow a mysterious force to protect them from bad decisions. It really comes down to common sense, and having more qualified professionals such as house inspectors, appraisers, and contract lawyers to protect both sides. Just like buying / selling anything else.
A local, experienced buyer agent might be incredibly useful for a buyer who is new to town, unfamiliar with the local area, etc. In that case, I pay every penny for a buyer agent, as a buyer.
When I point out dealbreakers and the client decides to walk away, I save them a due diligence fee, an appraisal fee, a home inspection fee, risk of loss of EMD, lost time in a transaction.
Equivalent to thousands of dollars, often on more than one house.
When clients want to offer way to much, and I put my foot on the brake, I save them thousands of dollars. The appraisal fee is peanuts when I talk the client down $5000 or $10,000 on an offer.
"Sun rising in the east?" I could have said it better.
"Morning sun in the east-facing breakfast nook" would have been better.
There is a ton of information for a buyer to filter and comprehend. I help with that. And, I work with many wonderful people with great credit whom you might disqualify for minor foibles. They need housing too.
Every buyer is different, and your preferences might be at odds with the buyer.
For instance, a morning sun in the east facing breakfast nook would be ideal for me. Where I live, I prefer to avoid the harsh afternoon sun, so a west facing afternoon exposure might not be ideal.
However, there are other factors that could change for the buyer, such as planting tall trees to shade the window / house.
As a very experienced real estate buyer and seller, I am always shocked at what some buyers want and consider important. That does not mean they are wrong and I am right. It just means they have different preferences.
They do not need to pay an agent 3% of the value of a house for that.
But if a buyer is ignorant and doesn't want to use common sense, and you are doing the hard work for them, then you deserve every penny of your commission.
Thanks everyone for your opinions. I wish I would have known before submitting my thread that dual agency is illegal in Florida, and we only have single agency or transaction brokerage. I wonder if that fact would make a difference in the outcome of my poll. The agreement the agent sent me shows they’d be acting in a transaction brokerage capacity, BUT in the Additional Terms it states that if she brings the buyer, as the listing agent and the selling agent, then the commission is reduced from 5% to 4%. The reason I’ve been confused is I wrongly assumed all along that she was going to be my fiduciary and represent my best interests, but I know now that she’d be a neutral party if she represents both sides in the transaction! After doing more research, I now understand (or at least I hope I do!!) that a dual agency has a fiduciary responsibility to both sides, but we don't have that in Florida so in my case, she and anyone in her brokerage would be a neutral party and give limited representation to both parties in the same transaction. I have to say that as a seller, I’m extremely annoyed at how confusing a dual agency is compared to a transaction broker IF the listing agent or anyone in her brokerage brings the buyer because I thought it was the same thing.
So, unless I’m once again misunderstanding this, how can she properly negotiate price and get me the best deal, etc., if she’s a transaction broker and also represents the buyer? I now wonder if I should insist on single agency so she is a fiduciary, but she didn’t give me that option. It seems I read somewhere that I can start as a single agency and later consent to a transaction broker, but I’m confused on that too because why not do the transaction broker from the beginning? This is why I’m wondering if I’m reading too much into this and making a bigger deal out of it than it needs to be, especially since several things I read or watched online say that most listings are transaction brokers in Florida.
And if I do tell her I want single agency, can I assume the agreement is completely different or does she just change the verbiage on the one she sent me? The one thing I do know for sure at this point is that I want my agent to be a bulldog negotiator and get the best possible price and terms for me. Period! Honestly, I’m so aggravated right now about this that I almost want to just contact OpenDoor or one of those companies and be done with it. I also feel the agent should have come to my house to explain her listing agreement in detail instead of emailing it and having me try and interpret some of these things that have been driving me crazy, which has taken up valuable time and delayed me listing my house! I then question if I’m choosing the right agent, but I don’t know if that’s common practice or not and she does get tons of listings and sells a lot of homes in my community.
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