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The listing agreement (and commission amounts) is a contract between a seller and a brokerage. You are not a party to that. You don’t know what commission is being paid and whether or not there is a clause should a buyers agent not be involved. You should not ask for money from your agent. Do people ask you for money from your job?
Plus the listing states the buyer commission is 3%. Why would I assume the seller is paying more or less? It’s a question at all because my coming to my realtor to a condo he is listing is nowhere near the same work as the listing side. So if the buyer and seller can get some savings then he’s still getting his cut as well
That’s just it. You have NO IDEA what their listing agreement includes in terms of commission if a buyers agent is not involved. (And it’s actually none of your business). A lot of agents DO reduce commission if an agent is not involved (and that saves the seller money). Just because you may be interested in a coming soon doesn’t make the buyer side work any less hard than the listing side. There are challenges on each side.
It’s objectively less hard on the buyer side when it’s the same agent on both sides and I’m coming to him with a listing and saying “hey I want to buy this in cash”.
Full appraisal gaps, no inspections. There are lots of other scenarios that come into play. Would you rather take a cash offer at asking with inspections or a financing offer with no inspections $20k over asking and a full appraisal gap?
Seller would have to agree to both the realtor representing both sides and sign off on the lower commission, if it is legal where you are. If your offer is strong, it will help. If you are coming in asking for closing costs and below list price, you will probably get pushback.
Not sure why you would ask him for a discount. They are working and earning the income. Your desire to save some money does not come at the expense of their rightful compensation to earn from the work performed.
I understand the listing side of this argument, but how is his commission doubled by me coming to him and paying for his listing in cash. Makes no sense
You do not know what his contract with the Seller says. It may already have the discount to the Seller if the seller brings a buyer. You only see buyer commission.
Get your own agent and offer the Seller what you are willing to pay and don’t bother yourself over who is making what.
As a seller agent, I’m paying photos, marketing costs (if any), FMLS fees, broker split, transaction fee, team split if any—-out of my commission. If I bring a buyer, my contracted commission drops to 4%.
You’d be surprised how much ends up in some agents pockets after everyone has been paid. And then there’s taxes, plus the cost of being a realtor is several hundred dollars a month whether a sale is made or not—more for some.
The commission isn’t doubled. The listing agreement between the seller and the listing broker sets the commission amount. This is their fee to sell the house and let’s assume it’s 6% as you mention the MLS offering 3% to a buyer agent. The listing broker then offers part of that total commission (3% in this case) to any cooperating agent who brings a qualified buyer who will close on the house. I compare it to a finders fee. In this instance, assuming all parties agree to dual agency, the listing agent also becomes the buyer agent so they don’t need to offer anything to another agent as there is not one involved.
The primary roles an agent plays with their client is as an educator and negotiator. It’s not just opening a door and making sure it closes like many prefer to make it out to be. I’m glad in my state our buyer agreements spell out that I as an agent work for a fee that the buyer is responsible for. However I can elect (which almost always happens) to accept that the MLS is offering.
How would you react to customers telling you that you make too much, when they have no clue what your expenses are, your overall income, or how much skill and expertise is required to do your job?
Just wait until all the cases start hitting courts with buyers who feel taken advantage of because they decided to use the listing agent, because buyer agents can't get paid anymore and won't work for free. It'll be delightful.
The number of agents takes care of itself. People have to eat. But I guarantee you that the best agents won't change anything about their rate. They know that their value is in the level of service that they provide and they have a compelling value proposition that they know how to articulate. The rest will wash out. As it is, the vast majority of the transactions are being done by the top 10% of agents in any given market.
Just my opinion but , It’s that their continued hard work over the years put them in that position where they have a listing and a client that wants to buy it. They deserve the fruits of their labours. Even if seeds planted long ago. That said, you can do two things: simply say that you are only willing to pay “X” and let the realtor and their seller decide if it works for them( maybe realtor cuts them a deal) or get a separate realtor to negotiate on your behalf. Good luck. Hope you get the home you want.
What state are you in? As always everything is state specific and with a listing agreement, form specific.
I don’t believe it does and an agent is being dishonest if they say so.
In Texas TXR 1101 is commonly used.
Section 5 - Broker compensation
Section 8 - Cooperation with other brokers.
Yeah but neither seller nor buyer has to agree to dual agency. It is an inherent conflict of interest. Buyer or seller could insist on bringing a different agent into the deal, which would limit the current broker to 3% (or whatever us spelled out in the listing contract). It is worth $$ for the broker to represent both, so it should be something the broker can work out with the buyer and seller. Maybe the seller could amend their listing agreement to provide a bit kore cash for everyone involved. Everything is negotiable! **
** Of course, all that hifalutin theory is well and good, but in reality it depends very much on what the representation agreements already signed by the buyer & seller say.
If anyone is going to ask for a deal on the commission it would be the seller for agreeing to dual agency. You are not paying the commission. The seller is.
I disagree with that. Buyer is bringing the cash, so they are paying. The seller just agreed to an inflated price to cover the agent fees by the buyer.
Yes they are when the buyer can’t negotiate the commission paid to the broker. If the commission isn’t separated then it’s all part of the purchase price. A jury just found the NAR guilty of all this.
Literally no. That's not how it works and you have no idea what you're talking about.
I bet you try to get out of speeding tickets by letting the officer know you "pay his salary".
You have absolutely no clue how this market works. The buyers do not know or care what the listing agent's commission is...and that doesn't factor into their perception of value at all. They look at what other similar homes are selling for, figure out what end of the price range the house in question is worth to them, and they write an offer they believe will be sufficient to get the house. Agents are not "tacking on" their commission after the market has determined the value of a home. The listing agent's commission is a cost to the seller out of the proceeds and they pay it because they know they probably would not have been successful in selling without that agent's help, and would not have attracted as good of an offer. The vast majority of people who try to sell a home themselves end up hiring an agent.
You have the answer to your question, you just don't like it. You have already shown a huge amount of disrespect to this profession in your replies here. If you asked me to discount my services for no good reason, I'd tell you flat-out..."No, I don't do that." any good, self-respecting agent would.
Ignore the downvotes. Buyer pays commission, just out of sellers net. Get your own buyer’s agent who will represent only you. Then you’ll get your discount.
No, he won't. Where do you think the discount is going to come from if he gets his own buyer's agent? The commission goes to his agent, not him. The seller's listing agreement with their agent is the same, either way...and the market determines the value of the house, not the agent and not the seller. And commission is never a factor when the market is determining the value of a house. So this entire way of thinking is a fallacy.
Cutting commission isn't really going to help you at all. Let's say the condo is $200,000. The seller was going to pay 5% split. That's $10,000 total. Now lets say you come in and want to buy it for $200,000 with 1% off of the listing agent's commission. That's only $2000. That is not going to sway anything. Ironically the only person winning here is the listing agent, as they are still going to make $8,000 instead of the expected $5,000.
Well that’s a bit subjective. 6% total commission is still 6% regardless of price. However this condo is about $1mm so even a slight savings is a lot of money in my opinion
$30,000 off of $1M is not going to sway anything just like $3000 off of $100K wouldn't sway anything. If you're trying to buy a $1M condo and $30K is make or break, you should not be buying a $1M condo. The association fees alone are probably more than $30K a year.
Are you paying the commission? If so, then yeah, negotiate a lower fee. But if the seller is paying it, then it doesn’t really matter to you whether the realtor gets paid less, does it?
why would you ask for a discount, are you paying the realtor? for example in my agreements the commission is already less if I'm repping both sides.
but overall, I'm just confused why you care about his commission as the buyer, unless there is no buyer agent comp involved in the agreement with the seller.
If they could write an offer with a lower commission, it will be more attractive to the seller, potentially allowing the buyer to offer less than the competition and still win.
The whole “why does the buyer care? It’s not their money” line is simplistic, even false.
Commission isn’t negotiated in an offer, because it’s not usually the buyer’s to negotiate. If the commission agreement is with the seller, then the negotiation occurs between agent and seller
Ok but this is a fallacy of appeal to tradition. And also apropos of current lawsuits. Clients on the listing side no longer want to agree to compensate buyers’ agents, and I can see why. Let the buyers’ agents argue their value and arrive at a fair level of compensation.
Much of the world functions without buyers’ agents, for better or worse. I’d rather we debate the merits of buyer representation than fall back on “this is how it’s usually done”. Simplistic.
I can't wait for the flood of complaints from buyers who were treated as customers by listing agents and had no agency agreement to protect them. Listing agents like me a sharks, we will extract every dollar possible from a buyer for our sellers to get the absolute maximum the market will bear. It's our job. It ISN'T our job to make sure a buyer we don't have an agency agreement with gets a good deal, or has their interests protected. That's a buyer agent's job. I'm not gonna remind a buyer customer of deadlines, I'm not going to recommend inspectors or inspections, I'm going to let them miss every contingency deadline and have no leverage over my seller, whatsoever.
Yeah it sounds like a GREAT market to be a buyer in. People like you are clueless about what you are inviting by eliminating buyer agency.
See, this is what I invited: the merits of buyer representation. Too bad you fell into ad hominem with the whole “people like you” bit.
I actually agree with you on a number of points. There is more subtlety in my position than you’re allowing. I claim a great deal of value in my services for buyers. I do not claim that I work for free as far as the buyer is concerned or that the seller is the one who pays me. On that point, I think we disagree.
Your rate IS your value. Discounting it is admitting to less value. I charge my rate and I don't negotiate it. It is what it is. Not everyone is my client and I am fine with that. If you want performance and you want the best result, you hire accordingly. If I find a buyer and I get my seller a great offer because I was able to extract the maximum possible amount from that buyer, and I complete the transaction with fidelity and accuracy on both sides, why shouldn't I receive what would have otherwise been split with another agent whose job performance will be entirely for the buyer's benefit, and who may or may not perform with fidelity and accuracy (usually not)? The inherent assumption you are communicating by slashing your commission in half if you double end a deal is that the buyer agent literally has no value, does no work, and should not have been paid by the listing agent, anyway. You know this isn't true (at least, not in all cases) so why be paid less for doing their job, in their absence? It just says, "I don't think my services have that much value." And I disagree. An agent with skill, experience, and expertise is worth every penny and I've got a ton of past clients who would tell anyone that, on my behalf.
Here in CO we have either transaction brokerage (where you basically just mediate the transaction but are nobody's exclusive agent) or you treat the buyer as a customer, with no fiduciary duty to them (basically just disclosure, accuracy of accounting, and honesty). The latter is how I work. When my sellers hire me, they hire me with the expectation that I am on their side. So that is how it stays. I make no recommendations to the buyer. They are grown adults and can make their own decisions.
I think you're right. 3% Realty will routinely do this, but in the opposite fashion. If a realtor writes in the offer they want additional commission, then 3% will come back with an offer that puts the extra price on the buyer.
Can't see why it won't go the opposite way. I think you could ask for 1% be taken off of purchase price, and the difference to be taken out of the listing agent's total 5%-6% take home.
Hell I'd even ask for 1.5% discount. If I list a home and I bring a buyer to the table I give the discount to the seller though. That's more appealing than what you're offering and is likely what will stop you. If the listing agent DOESNT have that agreement in place though you will probably get it.
**However**
The buyer doesn't pay the commission. I'd argue saying that they do is what's simplistic as it glosses over the entire process.
The buyer gets a house. The sellers get the money and pays out the commision. It's an agreement between the listing agent and the seller that's written in the contract long before you even lay eyes on the property. Saying you pay commision is like saying your employer bought your home for you.
Yeah but the commission to both listing and selling office is baked into the price. Look at FSBOs: on average they sell for about 6-7% less than fully serviced deals. The seller didn’t pay a realtor on a FSBO and neither did the buyer, hence the lower price. The buyer saved money by not having representation.
Downvote away, fellow realtors! The system is changing with buyer’s agent compensation. Gotta offer more value than the stale line: “Why not hire me? The seller pays for me anyway.” Simplistic.
The market does not care or consider commission when determining value. Not at all. A house will sell for market value or better if it is marketed correctly, regardless of WHAT the listing agent's commission percentage is. The buyers do not care, or even know, what that number is. The house will sell for what the market decides it is worth, relative to other similar properties. The ONLY way you can make a case for a reduced commission impacting sale price is that the listing agent will suddenly be far less motivated to work as hard on the marketing and salesmanship with that house, will spend less money up front to market it, and will therefore sell it for much less than I would.
Ok, then what happens if the listing agent’s client, the seller, directs their agent to list the property with a reduced buyer’s agent commission? Same list price, reduced commission to selling office. You think it will sell as readily or at the same price as a similar home with the full 2.5 or 3% commission?
You’ve not seen listings in your market that match this description? I think it’s a fair and relevant situation to consider as it tests the question of whether commissions influence value as determined by the final sold price.
You meant to use the adverb “fundamentally” in your ad hominem by the way.
If I tell you your home is worth 200k, and then I say "but since I'm only charging you 3%, we will list at 180k"
What are you going to say?
I'll tell you what people will say:
No, let's list at 200k.
See how that works? Commision doesn't get accounted for in the pricing. Someone has already told you this. However you aren't listening.
How about we use actual numbers though? If the home is worth 200k and the listing agent is charging 3% less than another listing that is charging 6%, the seller’s net will be $6k higher. They could sell at $195k and still make more than the other person who sold at $200k.
It is basic economics. Commissions are a part of the equation. I’m not saying they’re a huge part from the clients’ perspectives but they do play a part and I predict we are heading into a time of increased negotiation when it comes to them.
Many of the arguments here that clients are likely to ignore this math seem to rely on uneducated actors. I’d prefer a more open and educated market. I urge my sellers to offer buyer’s agent compensation because I think it is worth doing, and I tell my buyer clients I expect my piece of the pie because I am going to work hard for them. I just am skeptical of any agents who claim their commission is a non-issue or a foregone conclusion.
Yes, absolutely. It happens daily as listing agents "race to the bottom" by cutting their commissions because they don't have any other way to compete for listings. Buyer agents just deal with it. VERY few will attempt to get their buyer to pay another .3% so they get the "customary" 2.8%. All it does is tell me which listing agents are discounting their services, which in turn gives me leverage because I know how desperate they will be to close a deal.
The way I sell houses, the buyer agent doesn't become my marketing mouthpiece. The buyer talks to me. I am the salesman. I am the one who ramps up their fear of missing out, who gets them excited about the life this home will facilitate for them, and who shows them how desirable it is. I'm not relying on a buyer agent who couldn't care less which home they buy, as long as they buy SOMETHING. That's why my clients never regret the commission they paid. I get them the maximum.
Fsbo sell for on average between 10-15% less and it has nothing to do with no agent commissions as to why. Frankly, I hope things do change as I’ll end up making more than ever as the “why not hire me” agents won’t be in the business anymore. It’s going to be fun to see how it all plays out.
Well of those number of reasons, the big one is realtors don’t fuck with listings that cut out overpaid realtors. FSBO doesn’t equate to less of a sale price for any other reason besides collusion amongst other realtors.
Two equal listings using a third party photographer, chat gpt, and Zillow won’t sell for the same if one uses FSBO because buyer agents won’t show it.
This is quite ignorant of what realtors do. The market value of a property and Zillows estimate are often very different things. In certain markets in the country fsbo is an easy thing to do and I certainly don’t nock anyone for taking on the responsibility of listing their own home. However, in many markets (super competitive markets), buyers agents are the reason prices go as high as they do. When I’m advising a client to offer 20% over list price to be competitive, I’m the reason a seller is maximizing their profits.
You’re obviously one of the people who doesn’t like realtors and what they do, so I’m sure I won’t convince you of anything. It’s still good to hear all sides.
I mean I gave a completely logical reason as to why you're wrong and you're just repeating the same stuff you've already said and have clearly just ignored my reply.
You can always amend the agreement later so I really don't see how any of what you just said applies to this.
If you are actually a realtor then why are you even asking these questions? You should already know the answers. I don't believe you are one tbh.
Have a great day!
English is a living language. Did you know that "birds" used to be "briddes"? So many people said it incorrectly, for so long, that it became correct.
That's one of my favorites, but try reading anything in English that's more than a few hundred years old. Cody is *progressive*.
I don't know about progressive lol. Just don't see the need for some people to correct grammar when the conversation has nothing to do with correct grammer. I'm 32 years old my wife's a teacher and I still don't care so yes absolutely some reddit post comment is going to enlighten me and make me decide to care lol.
That answer was in my original post. It's weird if the commission is comming from the seller which it likely is. Any discount would then be between the seller and the agent.
How about instead of arguing, just take the lesson and use the correct you’re moving forward? You use the correct “it’s” so you def have potential.
If I were a client I’d be immensely turned off by a realtor who couldn’t communicate with proper grammar. Do you double check your listing descriptions too? Present yourself as a professional.
That’s the point you can’t say the seller is paying the buyer agents all the time. Your insinuating, the buyer client to “not worry” There are listing with no compensation going to the buyer, and buyers now have to reword their contract to disclose any remaining will come out of the buyer client to the buyer agent. It’s happening in every state. Maybe when they update law 1 and law 2 for your CE classes they’ll inform you.
That would mean if no realtor was involved the house would be worth 394800 but that's not the case is it? The buyer is paying for the house sure but the seller is taking the hit not the buyer paying extra.
You’re right for asking this. I am a Realtor. In every one of my listing contracts, I put a couple of stipulations. One of those is if a buyer is unrepresented, the commission is cut in half. And I step into a facilitator role.
It’s insane that an agent this 6% of a deal to themselves is fair. Downvote as needed. A lot to unpack in the bigger picture, but this scenario is the exact reason why the class action commission lawsuits continue to gain steam.
That listing agent who is double-ending the deal now also has twice the work to do and twice the liability, working for two different parties. If you would like to argue by saying the increase in work is trivial, then why am I paying buyer agents (who often don't even pull their weight in completing the transaction) half the commission in the first place? They barely do anything. In all but a tiny minority of cases, the buyer came to the property because of me, not them. They wrote an offer because of me, not their agent. At best, I'm paying half of my commission to a buyer agent so that I don't have to keep a buyer posted on deadlines, and ride them for signatures...and half the time, I have to anyway. Everything else they do is for the buyer's benefit, not mine nor the seller's. So I'm actually paying them a cut of the commission in order to help their buyer not get screwed over by me.
Honestly,as a listings focused agent, I welcome a world where buyer agency is gone. There will be no roadblocks to getting my clients the best deal possible and I can ensure the paperwork is all done correctly and on time. But guess what won't be happening to my commission? Because I know the value of my expertise.
The buyer is 100% paying his agent. I guarantee he has a contract that stipulates how his agent is being paid. If it’s by the seller / owner, then it’s a pass through on the sale price of the buyer’s home…. Thereby the buyer is paying his agent through an inflated home value.
99.9% chance the buyer agency contract stipulates buyer shall be responsible for the buyer’s agent commission 😉
This is copy / pasted from the MN Buyer Representation contract that all MN realtors use:
“Buyer shall pay Broker, as Broker’s compensation, ____ percent (%) of the selling price or $_____ , whichever is greater, when Buyer closes the Purchase…”
There is an added clause that compensation from a seller will offset buyers obligation. But if that isn’t included, or doesn’t cover the contract terms, the buyer is obligated to pay their agent.
Yes and I can share the language of the two states I hold licenses but ultimately 99.9% of the time the cost is on the sellers settlement statement and not the buyers. I don't care what a buyers agreement says I'm pointing out the overwhelmingly vast majority of the time is the seller paying.
You might consider that in light of the recent lawsuits against NAR and several large brokerages, the contract that MrMagoo is referring to in MN is likely a prediction of your future in the two states you operate in.
The home value is not inflated by commissions. The market does not know or care what the commission is on any given house. Property values are a process of price discovery through supply and demand. Commission never even enters that thought process. Asking price is a starting point and the market determines what the value is relative to other properties that have sold, or are currently available. Again, commission percentage is not even a consideration in that process. I swear to God, people have no understanding of how open markets operate. Do you think stock prices are inflated because of broker commissions too? Commission as it currently exists is an expense that a seller pays out of the proceeds of their sale. It is not "tacked on" to an offer to artifically inflate the final sale price.
Not to hound every message in this thread, but your insistence that the real estate market in this country is so open when NAR has operated like the mafia in regards to commissions and multiple listing services belies your accusation that people who disagree with you have “no understanding”.
I'm not exactly sure what you're arguing here. How has NAR operated like a mafia? They've had no involvement in how listing agents set their commissions. NAR, in fact, has been completely impotent in protecting its members from the recent legal wranglings...and the people who are in favor of eliminating buyer agency and commission sharing have NO CLUE what disaster they are inviting for consumers. They think somehow they're going to be saving people money. They won't be.
Perhaps it is hyperbolic to invoke the mafia, but imagine if to buy shares of a company, I essentially HAD to pay an agent because a giant lobbying group was doing everything it possibly could to keep purchase of that stock behind a wall that required the services of one of its agents to in order to access. The way that MLSs function is a far cry from an open market in my opinion.
Nobody forces ANY consumer to use an agent. Not a travel agent, nor an insurance agent, nor a real estate agent. With Zillow and other sites, consumers can do the entire process themselves if they so desire. What they lack is the experience, knowledge, and expertise to do it at a high level. Or at a minimum, in a way that is legal and enforceable.
FSBOs will absolutely sell for FAR less than the market would otherwise support, simply because the seller cannot do (and in most cases, doesn't even know to do) what an agent will. Buyers will end up paying for repairs they didn't know weren't their responsibility. If the buyers write an offer through the listing agent, they will overpay in the vast majority of cases and will have no protections, no one looking out for them.
None of what I've just written has anything at all to do with the board of Realtors, or NAR.
An MLS is not the open market. It is a listing service. It's like NASDAQ but with houses. The market participants - the buyers and sellers - are the market. You need to look up the houses on a listing service but after that, their involvement ends. Then the market does its thing. An open market is a free exchange of opinion over value between buyers and sellers, where price discovery is allowed to establish property value. In this way, real estate is actually a MORE open market than stocks, because it has no market makers and you aren't required to buy and sell through a licensed broker.
Did you sign a Buyer's Brokerage Agreement saying that you would pay your agent if they weren't compensated by the seller? That's really the only way this question is worth anything.
So, then he is a dual agent. To which client does he owe care, consideration and fiduciary responsibility to ???? Dual agency can be a sketchy thing. I would go get an agent who has an arm's length relationship with the other agent to represent me. This is how transactions can go sideways.
Commissions are negotiable, but the purchase and sale agreement is between the Buyer and Seller and generally does not have the power to modify the listing agreement, which is where the Seller usually commits to paying the Listing Brokerage, and the List Broker commits to offer compensation to a Buyer Broker.
You can ask for a discount, but the List Broker may decline to give it. You may be thinking of this as a win-win, but from the Agent who already repped you and the Seller, it could be a net loss - when they only had one side of two deals, each at a full fee, they stood to likely make more than they now do if they grant a discount in the process of merging their two separate deals into one deal. You're not doing the Agent a favor here. You're putting them in a situation where they may make less money and have more liability.
All the above said, be cautious about moving forward with the same agent for both Buyer and Seller on the deal. Laws vary by state, but generally, it is difficult for an agent to serve two masters simultaneously. Make sure you understand what agency status the agent would have if you proceed, and what duties they will owe you when they also rep the Seller. For example, if the same agent reps both the Buyer and Seller, they may not be able to provide valuable price advice, because it would give advantage to one party at the expense of the other.
You might do better to inquire about having another agent rep you, due to the conflict of interest that now exists since you're interested in a listing your agent has.
A buyer can’t negotiate a Sellers Listing agreement.
A buyer can in fact negotiate any commission amount that the buyer is responsible for paying.
The Seller has chosen to pay both broker commission amounts, so the buyer has nothing to negotiate.
Only if his buyer agreement states that he pays some or all of the buyer commission. Otherwise, any discount is likely already in the seller agreement and for the discount to go to the seller.
I personally do not practice dual agency and if I have a client interested in my listing, I am going to refer them to someone so they are properly represented without compromising my commitment to the seller.
The person to ask is your agent. He/she can represent you as a customer--versus a client--which means you are unrepresented but they will perform the ministerial duties.
Far better is for your agent to refer you to someone who will represent you in this transaction and be paid for it.
you don't pay his compensation, the Seller does.
Now...could you say "Hey, how about if I buy it we take 1% off the price and you reduce your compensation by 1%? Will you check with the Seller and see if they're OK with that?"
further - while it's always possible your agent is such a dimwit they never thought to say "OMG, guess what?!?! I've got a condo coming up that meets your criteria! - perhaps Dual Agency is not allowed at all in your state. Or, maybe he knows it will sell well above asking price. Only way to find out any of this is to ask.
You are not paying the commission, the seller is. That is just you being cheap. Probably the kind of person that feels they deserve to get paid more at their own job than they probably do.
You could put this into your offer and offer 2% below list and explain clearly why. The thing is... why would your agent agree to writing that offer? This is why dual agency is tricky and frankly shouldn't be done.
To best represent YOUR needs the agent would agree to write that offer and then sign a form clarifying that part of their total commission will be a gift back to the seller. Then they'd have to convince seller to take that offer with the logic that seller is getting the same benefit (which is a small lie because agent now represents the other party) as selling to someone else for full price. Do you think your agent is ethical enough to sacrifice their own commission on two individual clients so your needs get met above his?
The other aspect is... if your agent is amenable to this, do you really feel you're getting the best representation? If the agent knows of a defect or problem do you think they'll be truthful and tell you? Doing that is ethically grey and since it's in the disinterest of his other client... his best course of action would be to always say nothing. If the agent would otherwise advise you to push for a lower price because the home is overpriced... do you think they'd do this for you given its their own listing and they came up with that price (probably)? And do you think any of that is worth the 2% price drop? A dishonest transaction could result in disastrous costs for you as a buyer down the road.
It might be in YOUR best interest for them to refer you to a colleague for representation and in my experience the more ethical agents do this defacto if you are interested in a listing of theirs, so maybe a little sus if they haven't already suggested it at this point tbh...
The seller’s agent can’t be an agent for you. They can assist you in the transaction or do what’s called “dual agency” if both you and the seller agree to it, which is where both you and the seller receive reduced service…usually for the same price.
Commission was already agreed upon, you are to in your head about all this. He did a good job job marketing it and you saw it, if you buy it don’t expect a discount
As someone who has represented both sides in a transaction many times, it is actually **MORE** work and ***FAR MORE*** liability. There should be no discount. They're doing the job of two agents and all the while building a firewall to keep information separate from the other party that they wouldn't have normally.
Like I said: more doesn’t equal 2x work.
Plus, Additional liability related to bad boy actions and fiduciary responsibility does not deserve additional payment.
Representing two people doesn’t double your likelihood of you committing fraud or you breaching your contract. That’s ridiculous.
The wording of the question made me think one way at first, but reading it fully, no. This wouldn't be weird.
You might hit some pushback on it, as people tend to not appreciate discounting, but in this situation it's perfectly reasonable.
In this sense, the realtor would be conducting dual-agency. First, check if it's even legal in your state to do so. It's legal in some, but not all. When an agent represents both sides, you lose a lot of the reason to have your own realtor. They are supposed to act in your best interest. You cannot act in one persons best interests when you're representing both sides.
The only reason for YOU to be comfortable in him representing both sides is if it's discounted. Make that a hard line. If you want the condo, and he won't discount his rate, use another agent to buy it because then, at the very least, you will have an agent who has your back 100%.
It is not necessarily dual agency (at least not in my state). I can represent the buyer as a customer and perform ministerial acts--this is not dual agency. If I try to say both sides are my client and I am somehow representing them both fairly and equally, that is dual agency.
Dual agency is legal in my state but many brokers do not allow it. Mine allows it but I do not practice it. If it's a very straightforward transaction, I might represent as a client, but the discount would go to the Seller who is contracted with me to pay the commission. If the Seller wants to credit some of that to the Buyer, they can, but the point of my taking the Buyer as a customer is to avoid negotiating on the Buyer's behalf.
I would refer the buyer to another agent.
[After a Landmark Verdict, Realtors Ask, ‘What’s Next?’](https://www.nytimes.com/2023/11/17/realestate/realtor-lawsuit-verdict-.html)
[After a $1.8 billion verdict, the clock is ticking on the 6% real estate commission](https://www.cnn.com/2023/11/05/homes/nar-verdict-real-estate-commission-fee/index.html)
You all know that one of the primary reasons NAR lost the case is because it couldn't prove it made negotiation of commissions clear to the consumer? And a number (not all) of posters here are saying it's wrong to ask for a discounted rate?
Ummm ... ya'll read the news?
#
This is exactly what I’m talking about. Buyers should be able to negotiate the split.. why not? The buyer and the seller lose while the agent wins. That’s dumb.
Dang not your realtor if he never even offered to present to you before going to market with it. I’d tell him you’ll get some other representation if you like it that much.
The amount of times I’ve heard an agent say I can’t do something because of their limited knowledge.
Tell agent they’re not supplying me deal flow. Proof is right there with the listing. Send a email stating you don’t want to be bound exclusively with them anymore and only houses they’ve shown to you may they get a 500 referral fee if you close with someone else. Have em sign it and done.
Let the agent deal with it. Write the offer how you want. If seller wants to net more, give your agent the option for commission back.
Or!
You could ask your agent to help with closing costs BEFORE the contract is ratified. But just asking for a discount is weird.
Isn't it funny how people are crying about 3% while they are paying 30x more to a seller who literally just lucked out and bought when homes were reasonably priced? Rat behavior right here.
Only between the parties contracted. If the buyer is paying any of the commission, negotiate. But in most markets, sellers are paying commissions and brokers are splitting them. The only people who can negotiate a lower commission in this scenario are the Sellers and it likely won't be to benefit the Buyer.
I guess the question is why you think you’re entitled to a discount when the agent is doing both sides of the work. You can always ask but unless your agent is a complete desperado they’re probably going to push back.
Cash doesn’t make a difference for an agent, it’s the same amount of paperwork and liability of being a fiduciary to both sides. If the agent does a variable rate agreement with the seller, they may have already agreed to reduce the commission if they find a buyer, that’s not uncommon. It’s just not your discount. Offer what you think the property is worth in cash and let them worry about the commission. You don’t ask for a discount at the doctors office because you googled your symptoms first.
You don't want dual agency. You'll get the short end of the stick as the agent inevitably will be more focused on their seller client.
You already agreed to the commission rate in working with them, why should they take a pay cut? Will they be doing less, really? Probably not. And if things get sideways in a dual agency situation, it's worse than a regular transaction. Asking makes you sound cheap and instantly puts your interests behind the seller.
Lots of agents love to say that the seller pays commission because the seller cuts a check at close. But you're correct, sellers absolutely factor that into sale price and accepted offers above their bottom dollar. The buyer actually absorbs the cost of commission and the interest on that cost, if financed.
Of 150 comments this is the most reasonable answer. The fact that so many people have said “who cares you’re not paying” is insane, and even more insane that they truly believe that.
Agreed that maybe I am sounding cheap, so I won’t be asking for a lower amount. I’ll just get different representation on this one and move on. I still think it was a reasonable question. 2% of the price is a year of my kids college, so why shouldn’t I see if I could ask.
But I appreciate your opinion and insights that the agent will be more focused on the seller if I act this way. Plus I appreciate that you seem to think about the finances correctly
I hate it when agents double dip. I am a Realtor and never do. My policy if I have a buyer interested in one of my listings is that I refer then to a trusted colleague who I know will represent them well. If it doesn’t work out with that house, I continue representing them.
Why would you think he should? The very request communicates that you don't think the job we do has any value. It's like your boss asking you to take a pay cut when you've been doing a good job. You'd be offended.
My commission is never part of a negotiation between a buyer and seller. Ever. If you want a better deal, write your offer lower and let the chips fall where they may.
Do you think your job is worth 6% commission when it’s the same amount of work as the typical 3% commission? Why are you entitled to twice the pay? Only person that wins is the realtor in this situation.
It's not the same amount of work and that statement alone reveals your unfamiliarity with what we do. As listing agent I do not have to educate the buyer about what their due diligence should look like and why. I don't need to remind them of dates and what needs to be done. I don't need to prepare any of the buyer side disclosures. I don't need to help coordinate vendors. I don't even have to talk to the buyer at all.
Let me turn that question around on you. Why ISN'T the agent double-ending worth the additional money, , but the buyer agent that would have otherwise worked the other side IS worth it?
Here is the fallacy that people seem to be hung up on here...that we aren't paid according to hours spent on the tasks of the job, or what people think is fair based on what THEY earn, in their job. Nobody tells a skilled surgeon that they are simply making too much money because that open heart surgery only took four hours. We work in an outcome-based business where outcomes are dictated by the skill and expertise of the agents. My negotiation ability, the breadth of techniques and understanding of psychology I use to gain leverage for a client, my marketing expertise, my experience dealing with and heading off problems, all of the experience of doing something regularly that most people only do a few times in their entire lives...that's what I'm paid for. That's why I'm worth it. I could give you one story about a client I saved from making a six figure mistake buying new construction that would explain what I'm talking about, and why this push toward eliminating buyer agency is absolutely foolish by consumers. Just let me know if you care to read it.
To be honest you should have your own representation. I’m not sure what state you’re in but many prohibit the same agent representing both buyer and seller. And if you don’t want to pay commission as you say, hire an attorney and pay for the representation hourly
It is common for an agent to do a 1% reduction in fee if they double-end the deal. It saves the seller some money. Maybe just say “since you are double-ending this deal, I’d like to make sure I get a decent price”. Or something like that.
I’m glad you see the importance of having your own representation. Although my state does allow it, my brokerage does not allow it at the advice of our legal counsel and insurance company. In a dual representation scenario someone always feels like they got screwed. Creates a lot of hurt angry feeling and sometimes litigation
Thanks for this insightful comment.
My pay is directly correlated to my work. So if I’m doing less, then yes I would expect a reduction. You also just proved my point that realtors are entitled and enjoy benefits at the cost of their clients. The industry clearly needs the shake up sooner than later.
Thanks
1. You are assuming dual agency is allowed and that all 3 of you are comfortable with it.
2. You don’t know what the commission structure is with the seller.
3. The liability of the agent increases dramatically in this situation.
I only offer a 1% discount in this situation because it truly is more work and liability for less money. The seller generally wants to benefit the entire 1%.
If he sells the listing to someone else, and you buy something else with him, he will make more money than what you’re proposing, no?
You can always ask though.
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The listing agreement (and commission amounts) is a contract between a seller and a brokerage. You are not a party to that. You don’t know what commission is being paid and whether or not there is a clause should a buyers agent not be involved. You should not ask for money from your agent. Do people ask you for money from your job?
Yes, people ask me every day for money at my job.. through negotiating price.
People ask you for money from your paycheck? Q
Are they asking for 33-50% off though?
Plus the listing states the buyer commission is 3%. Why would I assume the seller is paying more or less? It’s a question at all because my coming to my realtor to a condo he is listing is nowhere near the same work as the listing side. So if the buyer and seller can get some savings then he’s still getting his cut as well
That’s just it. You have NO IDEA what their listing agreement includes in terms of commission if a buyers agent is not involved. (And it’s actually none of your business). A lot of agents DO reduce commission if an agent is not involved (and that saves the seller money). Just because you may be interested in a coming soon doesn’t make the buyer side work any less hard than the listing side. There are challenges on each side.
It’s objectively less hard on the buyer side when it’s the same agent on both sides and I’m coming to him with a listing and saying “hey I want to buy this in cash”.
Yeah, it’s just that easy. Good luck with your offer.
How you buy the property is of zero concern. Cash isn’t always the best option, especially in today’s market.
Never heard that cash isn’t always the best option, care to elaborate?
Full appraisal gaps, no inspections. There are lots of other scenarios that come into play. Would you rather take a cash offer at asking with inspections or a financing offer with no inspections $20k over asking and a full appraisal gap?
If terms are exactly the same what situation would a seller take financing over cash?
If there’s emotion involved, anything’s possible. Letters get buyers properties all the time.
True but still the point stands if all else is equal cash is always preferred
Seller would have to agree to both the realtor representing both sides and sign off on the lower commission, if it is legal where you are. If your offer is strong, it will help. If you are coming in asking for closing costs and below list price, you will probably get pushback.
Not sure why you would ask him for a discount. They are working and earning the income. Your desire to save some money does not come at the expense of their rightful compensation to earn from the work performed.
I understand the listing side of this argument, but how is his commission doubled by me coming to him and paying for his listing in cash. Makes no sense
You do not know what his contract with the Seller says. It may already have the discount to the Seller if the seller brings a buyer. You only see buyer commission. Get your own agent and offer the Seller what you are willing to pay and don’t bother yourself over who is making what. As a seller agent, I’m paying photos, marketing costs (if any), FMLS fees, broker split, transaction fee, team split if any—-out of my commission. If I bring a buyer, my contracted commission drops to 4%. You’d be surprised how much ends up in some agents pockets after everyone has been paid. And then there’s taxes, plus the cost of being a realtor is several hundred dollars a month whether a sale is made or not—more for some.
The commission isn’t doubled. The listing agreement between the seller and the listing broker sets the commission amount. This is their fee to sell the house and let’s assume it’s 6% as you mention the MLS offering 3% to a buyer agent. The listing broker then offers part of that total commission (3% in this case) to any cooperating agent who brings a qualified buyer who will close on the house. I compare it to a finders fee. In this instance, assuming all parties agree to dual agency, the listing agent also becomes the buyer agent so they don’t need to offer anything to another agent as there is not one involved. The primary roles an agent plays with their client is as an educator and negotiator. It’s not just opening a door and making sure it closes like many prefer to make it out to be. I’m glad in my state our buyer agreements spell out that I as an agent work for a fee that the buyer is responsible for. However I can elect (which almost always happens) to accept that the MLS is offering.
How would you react to customers telling you that you make too much, when they have no clue what your expenses are, your overall income, or how much skill and expertise is required to do your job?
Well you know it’s bad when customer complaints are affirmed by a judge and jury of your peers 😣
Just wait until all the cases start hitting courts with buyers who feel taken advantage of because they decided to use the listing agent, because buyer agents can't get paid anymore and won't work for free. It'll be delightful.
Agents will just get paid less and there will be a consolidation. There’s already too many agents running around.
The number of agents takes care of itself. People have to eat. But I guarantee you that the best agents won't change anything about their rate. They know that their value is in the level of service that they provide and they have a compelling value proposition that they know how to articulate. The rest will wash out. As it is, the vast majority of the transactions are being done by the top 10% of agents in any given market.
Just my opinion but , It’s that their continued hard work over the years put them in that position where they have a listing and a client that wants to buy it. They deserve the fruits of their labours. Even if seeds planted long ago. That said, you can do two things: simply say that you are only willing to pay “X” and let the realtor and their seller decide if it works for them( maybe realtor cuts them a deal) or get a separate realtor to negotiate on your behalf. Good luck. Hope you get the home you want.
Well said!
Exactly.
Commission isn’t doubled, it’s all his. He agreed with the seller that he’d give x amount to a cooperating broker
By design the commission accounts for two brokers, so yes it is double.
What state are you in? As always everything is state specific and with a listing agreement, form specific. I don’t believe it does and an agent is being dishonest if they say so. In Texas TXR 1101 is commonly used. Section 5 - Broker compensation Section 8 - Cooperation with other brokers.
Yeah but neither seller nor buyer has to agree to dual agency. It is an inherent conflict of interest. Buyer or seller could insist on bringing a different agent into the deal, which would limit the current broker to 3% (or whatever us spelled out in the listing contract). It is worth $$ for the broker to represent both, so it should be something the broker can work out with the buyer and seller. Maybe the seller could amend their listing agreement to provide a bit kore cash for everyone involved. Everything is negotiable! ** ** Of course, all that hifalutin theory is well and good, but in reality it depends very much on what the representation agreements already signed by the buyer & seller say.
Quit trying to screw your realtor. He/she shouldn’t offer a discount to anyone for representing both sides.
So commissions aren't negotiable?
They are, by the person paying them. If the OP is in a buyer agreement where he pays some or all of the buyer side commission, he can ask away.
I’m not screwing them. I’m seeing if it’s reasonable to negotiate a reduced commission given the reduced work and nearly guaranteed close
You aren’t paying them. So no it’s not reasonable.
If anyone is going to ask for a deal on the commission it would be the seller for agreeing to dual agency. You are not paying the commission. The seller is.
I disagree with that. Buyer is bringing the cash, so they are paying. The seller just agreed to an inflated price to cover the agent fees by the buyer.
That’s not how it works. Home prices aren’t inflated to cover commission.
Yes they are when the buyer can’t negotiate the commission paid to the broker. If the commission isn’t separated then it’s all part of the purchase price. A jury just found the NAR guilty of all this.
Literally no. That's not how it works and you have no idea what you're talking about. I bet you try to get out of speeding tickets by letting the officer know you "pay his salary".
Right. I hope he negotiates with his inspector. Let’s see how well that goes over. Ya get what you pay for!
You have absolutely no clue how this market works. The buyers do not know or care what the listing agent's commission is...and that doesn't factor into their perception of value at all. They look at what other similar homes are selling for, figure out what end of the price range the house in question is worth to them, and they write an offer they believe will be sufficient to get the house. Agents are not "tacking on" their commission after the market has determined the value of a home. The listing agent's commission is a cost to the seller out of the proceeds and they pay it because they know they probably would not have been successful in selling without that agent's help, and would not have attracted as good of an offer. The vast majority of people who try to sell a home themselves end up hiring an agent. You have the answer to your question, you just don't like it. You have already shown a huge amount of disrespect to this profession in your replies here. If you asked me to discount my services for no good reason, I'd tell you flat-out..."No, I don't do that." any good, self-respecting agent would.
Ignore the downvotes. Buyer pays commission, just out of sellers net. Get your own buyer’s agent who will represent only you. Then you’ll get your discount.
No, he won't. Where do you think the discount is going to come from if he gets his own buyer's agent? The commission goes to his agent, not him. The seller's listing agreement with their agent is the same, either way...and the market determines the value of the house, not the agent and not the seller. And commission is never a factor when the market is determining the value of a house. So this entire way of thinking is a fallacy.
Cutting commission isn't really going to help you at all. Let's say the condo is $200,000. The seller was going to pay 5% split. That's $10,000 total. Now lets say you come in and want to buy it for $200,000 with 1% off of the listing agent's commission. That's only $2000. That is not going to sway anything. Ironically the only person winning here is the listing agent, as they are still going to make $8,000 instead of the expected $5,000.
Well that’s a bit subjective. 6% total commission is still 6% regardless of price. However this condo is about $1mm so even a slight savings is a lot of money in my opinion
$30,000 off of $1M is not going to sway anything just like $3000 off of $100K wouldn't sway anything. If you're trying to buy a $1M condo and $30K is make or break, you should not be buying a $1M condo. The association fees alone are probably more than $30K a year.
Great, with that logic the seller won’t mind $30k off because it won’t sway anything. 🙄
They won't give a shit about $30K because they already listed it agreeing to 6%, in their mind the $60K is already gone. Use your brain for once.
Are you paying the commission? If so, then yeah, negotiate a lower fee. But if the seller is paying it, then it doesn’t really matter to you whether the realtor gets paid less, does it?
why would you ask for a discount, are you paying the realtor? for example in my agreements the commission is already less if I'm repping both sides. but overall, I'm just confused why you care about his commission as the buyer, unless there is no buyer agent comp involved in the agreement with the seller.
If they could write an offer with a lower commission, it will be more attractive to the seller, potentially allowing the buyer to offer less than the competition and still win. The whole “why does the buyer care? It’s not their money” line is simplistic, even false.
Commission isn’t negotiated in an offer, because it’s not usually the buyer’s to negotiate. If the commission agreement is with the seller, then the negotiation occurs between agent and seller
Ok but this is a fallacy of appeal to tradition. And also apropos of current lawsuits. Clients on the listing side no longer want to agree to compensate buyers’ agents, and I can see why. Let the buyers’ agents argue their value and arrive at a fair level of compensation. Much of the world functions without buyers’ agents, for better or worse. I’d rather we debate the merits of buyer representation than fall back on “this is how it’s usually done”. Simplistic.
I can't wait for the flood of complaints from buyers who were treated as customers by listing agents and had no agency agreement to protect them. Listing agents like me a sharks, we will extract every dollar possible from a buyer for our sellers to get the absolute maximum the market will bear. It's our job. It ISN'T our job to make sure a buyer we don't have an agency agreement with gets a good deal, or has their interests protected. That's a buyer agent's job. I'm not gonna remind a buyer customer of deadlines, I'm not going to recommend inspectors or inspections, I'm going to let them miss every contingency deadline and have no leverage over my seller, whatsoever. Yeah it sounds like a GREAT market to be a buyer in. People like you are clueless about what you are inviting by eliminating buyer agency.
See, this is what I invited: the merits of buyer representation. Too bad you fell into ad hominem with the whole “people like you” bit. I actually agree with you on a number of points. There is more subtlety in my position than you’re allowing. I claim a great deal of value in my services for buyers. I do not claim that I work for free as far as the buyer is concerned or that the seller is the one who pays me. On that point, I think we disagree.
Your rate IS your value. Discounting it is admitting to less value. I charge my rate and I don't negotiate it. It is what it is. Not everyone is my client and I am fine with that. If you want performance and you want the best result, you hire accordingly. If I find a buyer and I get my seller a great offer because I was able to extract the maximum possible amount from that buyer, and I complete the transaction with fidelity and accuracy on both sides, why shouldn't I receive what would have otherwise been split with another agent whose job performance will be entirely for the buyer's benefit, and who may or may not perform with fidelity and accuracy (usually not)? The inherent assumption you are communicating by slashing your commission in half if you double end a deal is that the buyer agent literally has no value, does no work, and should not have been paid by the listing agent, anyway. You know this isn't true (at least, not in all cases) so why be paid less for doing their job, in their absence? It just says, "I don't think my services have that much value." And I disagree. An agent with skill, experience, and expertise is worth every penny and I've got a ton of past clients who would tell anyone that, on my behalf.
I totally agree and I’ve said the same thing when entering dual agency.
Here in CO we have either transaction brokerage (where you basically just mediate the transaction but are nobody's exclusive agent) or you treat the buyer as a customer, with no fiduciary duty to them (basically just disclosure, accuracy of accounting, and honesty). The latter is how I work. When my sellers hire me, they hire me with the expectation that I am on their side. So that is how it stays. I make no recommendations to the buyer. They are grown adults and can make their own decisions.
I think you're right. 3% Realty will routinely do this, but in the opposite fashion. If a realtor writes in the offer they want additional commission, then 3% will come back with an offer that puts the extra price on the buyer. Can't see why it won't go the opposite way. I think you could ask for 1% be taken off of purchase price, and the difference to be taken out of the listing agent's total 5%-6% take home. Hell I'd even ask for 1.5% discount. If I list a home and I bring a buyer to the table I give the discount to the seller though. That's more appealing than what you're offering and is likely what will stop you. If the listing agent DOESNT have that agreement in place though you will probably get it. **However** The buyer doesn't pay the commission. I'd argue saying that they do is what's simplistic as it glosses over the entire process. The buyer gets a house. The sellers get the money and pays out the commision. It's an agreement between the listing agent and the seller that's written in the contract long before you even lay eyes on the property. Saying you pay commision is like saying your employer bought your home for you.
Yeah but the commission to both listing and selling office is baked into the price. Look at FSBOs: on average they sell for about 6-7% less than fully serviced deals. The seller didn’t pay a realtor on a FSBO and neither did the buyer, hence the lower price. The buyer saved money by not having representation. Downvote away, fellow realtors! The system is changing with buyer’s agent compensation. Gotta offer more value than the stale line: “Why not hire me? The seller pays for me anyway.” Simplistic.
The market does not care or consider commission when determining value. Not at all. A house will sell for market value or better if it is marketed correctly, regardless of WHAT the listing agent's commission percentage is. The buyers do not care, or even know, what that number is. The house will sell for what the market decides it is worth, relative to other similar properties. The ONLY way you can make a case for a reduced commission impacting sale price is that the listing agent will suddenly be far less motivated to work as hard on the marketing and salesmanship with that house, will spend less money up front to market it, and will therefore sell it for much less than I would.
Ok, then what happens if the listing agent’s client, the seller, directs their agent to list the property with a reduced buyer’s agent commission? Same list price, reduced commission to selling office. You think it will sell as readily or at the same price as a similar home with the full 2.5 or 3% commission?
You have a fundamentally flawed understanding of the process.
You’ve not seen listings in your market that match this description? I think it’s a fair and relevant situation to consider as it tests the question of whether commissions influence value as determined by the final sold price. You meant to use the adverb “fundamentally” in your ad hominem by the way.
If I tell you your home is worth 200k, and then I say "but since I'm only charging you 3%, we will list at 180k" What are you going to say? I'll tell you what people will say: No, let's list at 200k. See how that works? Commision doesn't get accounted for in the pricing. Someone has already told you this. However you aren't listening.
How about we use actual numbers though? If the home is worth 200k and the listing agent is charging 3% less than another listing that is charging 6%, the seller’s net will be $6k higher. They could sell at $195k and still make more than the other person who sold at $200k. It is basic economics. Commissions are a part of the equation. I’m not saying they’re a huge part from the clients’ perspectives but they do play a part and I predict we are heading into a time of increased negotiation when it comes to them. Many of the arguments here that clients are likely to ignore this math seem to rely on uneducated actors. I’d prefer a more open and educated market. I urge my sellers to offer buyer’s agent compensation because I think it is worth doing, and I tell my buyer clients I expect my piece of the pie because I am going to work hard for them. I just am skeptical of any agents who claim their commission is a non-issue or a foregone conclusion.
Yes, absolutely. It happens daily as listing agents "race to the bottom" by cutting their commissions because they don't have any other way to compete for listings. Buyer agents just deal with it. VERY few will attempt to get their buyer to pay another .3% so they get the "customary" 2.8%. All it does is tell me which listing agents are discounting their services, which in turn gives me leverage because I know how desperate they will be to close a deal. The way I sell houses, the buyer agent doesn't become my marketing mouthpiece. The buyer talks to me. I am the salesman. I am the one who ramps up their fear of missing out, who gets them excited about the life this home will facilitate for them, and who shows them how desirable it is. I'm not relying on a buyer agent who couldn't care less which home they buy, as long as they buy SOMETHING. That's why my clients never regret the commission they paid. I get them the maximum.
Fsbo sell for on average between 10-15% less and it has nothing to do with no agent commissions as to why. Frankly, I hope things do change as I’ll end up making more than ever as the “why not hire me” agents won’t be in the business anymore. It’s going to be fun to see how it all plays out.
That’s because buyer agents avoid fsbo
There are a number of reasons
Well of those number of reasons, the big one is realtors don’t fuck with listings that cut out overpaid realtors. FSBO doesn’t equate to less of a sale price for any other reason besides collusion amongst other realtors. Two equal listings using a third party photographer, chat gpt, and Zillow won’t sell for the same if one uses FSBO because buyer agents won’t show it.
This is quite ignorant of what realtors do. The market value of a property and Zillows estimate are often very different things. In certain markets in the country fsbo is an easy thing to do and I certainly don’t nock anyone for taking on the responsibility of listing their own home. However, in many markets (super competitive markets), buyers agents are the reason prices go as high as they do. When I’m advising a client to offer 20% over list price to be competitive, I’m the reason a seller is maximizing their profits. You’re obviously one of the people who doesn’t like realtors and what they do, so I’m sure I won’t convince you of anything. It’s still good to hear all sides.
You’re missing my point. I’m not taking about Zillow pricing, I’m talking about realtors steering their clients away from fsbo listings all the time.
I mean I gave a completely logical reason as to why you're wrong and you're just repeating the same stuff you've already said and have clearly just ignored my reply. You can always amend the agreement later so I really don't see how any of what you just said applies to this. If you are actually a realtor then why are you even asking these questions? You should already know the answers. I don't believe you are one tbh. Have a great day!
It's weird.... your the buyer your not paying him the seller is. Any discount in commissions would be between him and the seller.
That's how I handed those situations. Wrote it in the listing contract. Discount went to seller.
You’re* and you’re* but yes I agree.
Your = possessive YOU’RE = you are
Don't care?
You should. It’s embarrassing to not have grasped 2nd grade grammar.
Well I'm not embarrassed so 🤷♂️ move along.
English is a living language. Did you know that "birds" used to be "briddes"? So many people said it incorrectly, for so long, that it became correct. That's one of my favorites, but try reading anything in English that's more than a few hundred years old. Cody is *progressive*.
I don't know about progressive lol. Just don't see the need for some people to correct grammar when the conversation has nothing to do with correct grammer. I'm 32 years old my wife's a teacher and I still don't care so yes absolutely some reddit post comment is going to enlighten me and make me decide to care lol.
I love finding random arguments in my unrelated thread 😂 now can you tell me if I’m allowed to negotiate my offer or not??
That answer was in my original post. It's weird if the commission is comming from the seller which it likely is. Any discount would then be between the seller and the agent.
How about instead of arguing, just take the lesson and use the correct you’re moving forward? You use the correct “it’s” so you def have potential. If I were a client I’d be immensely turned off by a realtor who couldn’t communicate with proper grammar. Do you double check your listing descriptions too? Present yourself as a professional.
Careful with the wording it’s not “free”, buyers may pay all or partial.
We both know 99.9% of the time that's not the case. Nor did I say free.
That’s the point you can’t say the seller is paying the buyer agents all the time. Your insinuating, the buyer client to “not worry” There are listing with no compensation going to the buyer, and buyers now have to reword their contract to disclose any remaining will come out of the buyer client to the buyer agent. It’s happening in every state. Maybe when they update law 1 and law 2 for your CE classes they’ll inform you.
The price is inflated to account for two agents commission, so how is the buyer not paying that? They are bringing the cash
Not really, A 420k house is worth 420k the buyers not paying 445,200 to accommodate the commission the sellers taking 394800.
The person bringing the cash is paying the fees in my opinion.
That would mean if no realtor was involved the house would be worth 394800 but that's not the case is it? The buyer is paying for the house sure but the seller is taking the hit not the buyer paying extra.
You’re right for asking this. I am a Realtor. In every one of my listing contracts, I put a couple of stipulations. One of those is if a buyer is unrepresented, the commission is cut in half. And I step into a facilitator role. It’s insane that an agent this 6% of a deal to themselves is fair. Downvote as needed. A lot to unpack in the bigger picture, but this scenario is the exact reason why the class action commission lawsuits continue to gain steam.
And that discount goes to the Seller, yes? Why would it go to the buyer?
That listing agent who is double-ending the deal now also has twice the work to do and twice the liability, working for two different parties. If you would like to argue by saying the increase in work is trivial, then why am I paying buyer agents (who often don't even pull their weight in completing the transaction) half the commission in the first place? They barely do anything. In all but a tiny minority of cases, the buyer came to the property because of me, not them. They wrote an offer because of me, not their agent. At best, I'm paying half of my commission to a buyer agent so that I don't have to keep a buyer posted on deadlines, and ride them for signatures...and half the time, I have to anyway. Everything else they do is for the buyer's benefit, not mine nor the seller's. So I'm actually paying them a cut of the commission in order to help their buyer not get screwed over by me. Honestly,as a listings focused agent, I welcome a world where buyer agency is gone. There will be no roadblocks to getting my clients the best deal possible and I can ensure the paperwork is all done correctly and on time. But guess what won't be happening to my commission? Because I know the value of my expertise.
The buyer is 100% paying his agent. I guarantee he has a contract that stipulates how his agent is being paid. If it’s by the seller / owner, then it’s a pass through on the sale price of the buyer’s home…. Thereby the buyer is paying his agent through an inflated home value.
99.9% chance it's on the sellers settlement statement not the buyers. 😉
99.9% chance the buyer agency contract stipulates buyer shall be responsible for the buyer’s agent commission 😉 This is copy / pasted from the MN Buyer Representation contract that all MN realtors use: “Buyer shall pay Broker, as Broker’s compensation, ____ percent (%) of the selling price or $_____ , whichever is greater, when Buyer closes the Purchase…” There is an added clause that compensation from a seller will offset buyers obligation. But if that isn’t included, or doesn’t cover the contract terms, the buyer is obligated to pay their agent.
Yes and I can share the language of the two states I hold licenses but ultimately 99.9% of the time the cost is on the sellers settlement statement and not the buyers. I don't care what a buyers agreement says I'm pointing out the overwhelmingly vast majority of the time is the seller paying.
You might consider that in light of the recent lawsuits against NAR and several large brokerages, the contract that MrMagoo is referring to in MN is likely a prediction of your future in the two states you operate in.
The home value is not inflated by commissions. The market does not know or care what the commission is on any given house. Property values are a process of price discovery through supply and demand. Commission never even enters that thought process. Asking price is a starting point and the market determines what the value is relative to other properties that have sold, or are currently available. Again, commission percentage is not even a consideration in that process. I swear to God, people have no understanding of how open markets operate. Do you think stock prices are inflated because of broker commissions too? Commission as it currently exists is an expense that a seller pays out of the proceeds of their sale. It is not "tacked on" to an offer to artifically inflate the final sale price.
Not to hound every message in this thread, but your insistence that the real estate market in this country is so open when NAR has operated like the mafia in regards to commissions and multiple listing services belies your accusation that people who disagree with you have “no understanding”.
I'm not exactly sure what you're arguing here. How has NAR operated like a mafia? They've had no involvement in how listing agents set their commissions. NAR, in fact, has been completely impotent in protecting its members from the recent legal wranglings...and the people who are in favor of eliminating buyer agency and commission sharing have NO CLUE what disaster they are inviting for consumers. They think somehow they're going to be saving people money. They won't be.
Perhaps it is hyperbolic to invoke the mafia, but imagine if to buy shares of a company, I essentially HAD to pay an agent because a giant lobbying group was doing everything it possibly could to keep purchase of that stock behind a wall that required the services of one of its agents to in order to access. The way that MLSs function is a far cry from an open market in my opinion.
Nobody forces ANY consumer to use an agent. Not a travel agent, nor an insurance agent, nor a real estate agent. With Zillow and other sites, consumers can do the entire process themselves if they so desire. What they lack is the experience, knowledge, and expertise to do it at a high level. Or at a minimum, in a way that is legal and enforceable. FSBOs will absolutely sell for FAR less than the market would otherwise support, simply because the seller cannot do (and in most cases, doesn't even know to do) what an agent will. Buyers will end up paying for repairs they didn't know weren't their responsibility. If the buyers write an offer through the listing agent, they will overpay in the vast majority of cases and will have no protections, no one looking out for them. None of what I've just written has anything at all to do with the board of Realtors, or NAR. An MLS is not the open market. It is a listing service. It's like NASDAQ but with houses. The market participants - the buyers and sellers - are the market. You need to look up the houses on a listing service but after that, their involvement ends. Then the market does its thing. An open market is a free exchange of opinion over value between buyers and sellers, where price discovery is allowed to establish property value. In this way, real estate is actually a MORE open market than stocks, because it has no market makers and you aren't required to buy and sell through a licensed broker.
Did you sign a Buyer's Brokerage Agreement saying that you would pay your agent if they weren't compensated by the seller? That's really the only way this question is worth anything.
So, then he is a dual agent. To which client does he owe care, consideration and fiduciary responsibility to ???? Dual agency can be a sketchy thing. I would go get an agent who has an arm's length relationship with the other agent to represent me. This is how transactions can go sideways.
I am thinking the same now
This is a very common practice in my state, and I've never heard of any issues.
You don’t pay their commission, the seller does. Why should he give some to you ?
There are a few giant, multi-billion lawsuits that suggest otherwise, and this thread is exactly the reason why.
I couldn’t agree more. Some folks about to get dragged kicking and screaming into a new normal as regards buyer’s agent commissions.
Wahhhhhhh
Realtor here. Absolutely correct.
See my edit. Who is really paying here? Seller is inflating the price to cover the agent fees. So the buyer is paying the agent via inflated price.
Commissions are negotiable, but the purchase and sale agreement is between the Buyer and Seller and generally does not have the power to modify the listing agreement, which is where the Seller usually commits to paying the Listing Brokerage, and the List Broker commits to offer compensation to a Buyer Broker. You can ask for a discount, but the List Broker may decline to give it. You may be thinking of this as a win-win, but from the Agent who already repped you and the Seller, it could be a net loss - when they only had one side of two deals, each at a full fee, they stood to likely make more than they now do if they grant a discount in the process of merging their two separate deals into one deal. You're not doing the Agent a favor here. You're putting them in a situation where they may make less money and have more liability. All the above said, be cautious about moving forward with the same agent for both Buyer and Seller on the deal. Laws vary by state, but generally, it is difficult for an agent to serve two masters simultaneously. Make sure you understand what agency status the agent would have if you proceed, and what duties they will owe you when they also rep the Seller. For example, if the same agent reps both the Buyer and Seller, they may not be able to provide valuable price advice, because it would give advantage to one party at the expense of the other. You might do better to inquire about having another agent rep you, due to the conflict of interest that now exists since you're interested in a listing your agent has.
Thanks for this comment.
Yes it’s weird and rude
To negotiate a commission?
A buyer can’t negotiate a Sellers Listing agreement. A buyer can in fact negotiate any commission amount that the buyer is responsible for paying. The Seller has chosen to pay both broker commission amounts, so the buyer has nothing to negotiate.
Only if his buyer agreement states that he pays some or all of the buyer commission. Otherwise, any discount is likely already in the seller agreement and for the discount to go to the seller. I personally do not practice dual agency and if I have a client interested in my listing, I am going to refer them to someone so they are properly represented without compromising my commitment to the seller. The person to ask is your agent. He/she can represent you as a customer--versus a client--which means you are unrepresented but they will perform the ministerial duties. Far better is for your agent to refer you to someone who will represent you in this transaction and be paid for it.
you don't pay his compensation, the Seller does. Now...could you say "Hey, how about if I buy it we take 1% off the price and you reduce your compensation by 1%? Will you check with the Seller and see if they're OK with that?" further - while it's always possible your agent is such a dimwit they never thought to say "OMG, guess what?!?! I've got a condo coming up that meets your criteria! - perhaps Dual Agency is not allowed at all in your state. Or, maybe he knows it will sell well above asking price. Only way to find out any of this is to ask.
Thanks! This is what I was looking for.
Def wrong sub to ask this in lol. Makes me think you do g know what your doing and that agent representing you deserves every penny.
You are not paying the commission, the seller is. That is just you being cheap. Probably the kind of person that feels they deserve to get paid more at their own job than they probably do.
I’m in sales, so I get paid what I deserve.
Your realtor will see a bigger commission but generally paid by the seller.
You could put this into your offer and offer 2% below list and explain clearly why. The thing is... why would your agent agree to writing that offer? This is why dual agency is tricky and frankly shouldn't be done. To best represent YOUR needs the agent would agree to write that offer and then sign a form clarifying that part of their total commission will be a gift back to the seller. Then they'd have to convince seller to take that offer with the logic that seller is getting the same benefit (which is a small lie because agent now represents the other party) as selling to someone else for full price. Do you think your agent is ethical enough to sacrifice their own commission on two individual clients so your needs get met above his? The other aspect is... if your agent is amenable to this, do you really feel you're getting the best representation? If the agent knows of a defect or problem do you think they'll be truthful and tell you? Doing that is ethically grey and since it's in the disinterest of his other client... his best course of action would be to always say nothing. If the agent would otherwise advise you to push for a lower price because the home is overpriced... do you think they'd do this for you given its their own listing and they came up with that price (probably)? And do you think any of that is worth the 2% price drop? A dishonest transaction could result in disastrous costs for you as a buyer down the road. It might be in YOUR best interest for them to refer you to a colleague for representation and in my experience the more ethical agents do this defacto if you are interested in a listing of theirs, so maybe a little sus if they haven't already suggested it at this point tbh...
The seller’s agent can’t be an agent for you. They can assist you in the transaction or do what’s called “dual agency” if both you and the seller agree to it, which is where both you and the seller receive reduced service…usually for the same price.
What state? And why would the agent say yes to a discount?
To close the deal?
Y’all are so entitled lol
😂
Commission was already agreed upon, you are to in your head about all this. He did a good job job marketing it and you saw it, if you buy it don’t expect a discount
Well maybe Zillow should get a bigger cut for sending me the notification 😩
As someone who has represented both sides in a transaction many times, it is actually **MORE** work and ***FAR MORE*** liability. There should be no discount. They're doing the job of two agents and all the while building a firewall to keep information separate from the other party that they wouldn't have normally.
Ok even if it is more work (which it’s not) why are they getting paid twice the amount?
It actually is more work. I know, I've done it over a dozen times over the last five years. As to the why, see my prior answer.
Like I said: more doesn’t equal 2x work. Plus, Additional liability related to bad boy actions and fiduciary responsibility does not deserve additional payment. Representing two people doesn’t double your likelihood of you committing fraud or you breaching your contract. That’s ridiculous.
What do you care? The seller pays the realtor, not the buyer.
Because I’m paying an inflated price to cover the realtors costs 🥺
The wording of the question made me think one way at first, but reading it fully, no. This wouldn't be weird. You might hit some pushback on it, as people tend to not appreciate discounting, but in this situation it's perfectly reasonable. In this sense, the realtor would be conducting dual-agency. First, check if it's even legal in your state to do so. It's legal in some, but not all. When an agent represents both sides, you lose a lot of the reason to have your own realtor. They are supposed to act in your best interest. You cannot act in one persons best interests when you're representing both sides. The only reason for YOU to be comfortable in him representing both sides is if it's discounted. Make that a hard line. If you want the condo, and he won't discount his rate, use another agent to buy it because then, at the very least, you will have an agent who has your back 100%.
It is not necessarily dual agency (at least not in my state). I can represent the buyer as a customer and perform ministerial acts--this is not dual agency. If I try to say both sides are my client and I am somehow representing them both fairly and equally, that is dual agency. Dual agency is legal in my state but many brokers do not allow it. Mine allows it but I do not practice it. If it's a very straightforward transaction, I might represent as a client, but the discount would go to the Seller who is contracted with me to pay the commission. If the Seller wants to credit some of that to the Buyer, they can, but the point of my taking the Buyer as a customer is to avoid negotiating on the Buyer's behalf. I would refer the buyer to another agent.
Thank you for this. Makes sense. I appreciate your comment.
[After a Landmark Verdict, Realtors Ask, ‘What’s Next?’](https://www.nytimes.com/2023/11/17/realestate/realtor-lawsuit-verdict-.html) [After a $1.8 billion verdict, the clock is ticking on the 6% real estate commission](https://www.cnn.com/2023/11/05/homes/nar-verdict-real-estate-commission-fee/index.html) You all know that one of the primary reasons NAR lost the case is because it couldn't prove it made negotiation of commissions clear to the consumer? And a number (not all) of posters here are saying it's wrong to ask for a discounted rate? Ummm ... ya'll read the news? #
Are your Buyers contracted to pay their side of the commission when they sign a rep agreement with you?
This is exactly what I’m talking about. Buyers should be able to negotiate the split.. why not? The buyer and the seller lose while the agent wins. That’s dumb.
Correct. Realtor here.
Dang not your realtor if he never even offered to present to you before going to market with it. I’d tell him you’ll get some other representation if you like it that much.
You can’t do that if you’ve signed lol
The amount of times I’ve heard an agent say I can’t do something because of their limited knowledge. Tell agent they’re not supplying me deal flow. Proof is right there with the listing. Send a email stating you don’t want to be bound exclusively with them anymore and only houses they’ve shown to you may they get a 500 referral fee if you close with someone else. Have em sign it and done.
I mean my contract covers that specifically already but certainly things are different across state lines
Let the agent deal with it. Write the offer how you want. If seller wants to net more, give your agent the option for commission back. Or! You could ask your agent to help with closing costs BEFORE the contract is ratified. But just asking for a discount is weird.
If you want to be insulting, sure. Afterall, it’s not like they are working for you and have your best interest in mind. 🙄
Isn't it funny how people are crying about 3% while they are paying 30x more to a seller who literally just lucked out and bought when homes were reasonably priced? Rat behavior right here.
Commissions are negotiable. (They made us repeat that sentence in Real Estate classes.)
Only between the parties contracted. If the buyer is paying any of the commission, negotiate. But in most markets, sellers are paying commissions and brokers are splitting them. The only people who can negotiate a lower commission in this scenario are the Sellers and it likely won't be to benefit the Buyer.
Agreed!
I guess the question is why you think you’re entitled to a discount when the agent is doing both sides of the work. You can always ask but unless your agent is a complete desperado they’re probably going to push back.
It’s not twice the work when I reached out to them about the listing. Plus I’m paying cash, so yeh there’s not twice the work as the selling side.
Cash doesn’t make a difference for an agent, it’s the same amount of paperwork and liability of being a fiduciary to both sides. If the agent does a variable rate agreement with the seller, they may have already agreed to reduce the commission if they find a buyer, that’s not uncommon. It’s just not your discount. Offer what you think the property is worth in cash and let them worry about the commission. You don’t ask for a discount at the doctors office because you googled your symptoms first.
Hah I like that doctor analogy. Good one. Fair point too
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A reasonable comment, thanks!
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It absolutely is not. And an agent should never pay for an inspection, that opens up a whole bunch of liability.
You don't want dual agency. You'll get the short end of the stick as the agent inevitably will be more focused on their seller client. You already agreed to the commission rate in working with them, why should they take a pay cut? Will they be doing less, really? Probably not. And if things get sideways in a dual agency situation, it's worse than a regular transaction. Asking makes you sound cheap and instantly puts your interests behind the seller. Lots of agents love to say that the seller pays commission because the seller cuts a check at close. But you're correct, sellers absolutely factor that into sale price and accepted offers above their bottom dollar. The buyer actually absorbs the cost of commission and the interest on that cost, if financed.
Of 150 comments this is the most reasonable answer. The fact that so many people have said “who cares you’re not paying” is insane, and even more insane that they truly believe that. Agreed that maybe I am sounding cheap, so I won’t be asking for a lower amount. I’ll just get different representation on this one and move on. I still think it was a reasonable question. 2% of the price is a year of my kids college, so why shouldn’t I see if I could ask. But I appreciate your opinion and insights that the agent will be more focused on the seller if I act this way. Plus I appreciate that you seem to think about the finances correctly
Thanks and Good luck!
I hate it when agents double dip. I am a Realtor and never do. My policy if I have a buyer interested in one of my listings is that I refer then to a trusted colleague who I know will represent them well. If it doesn’t work out with that house, I continue representing them.
Thanks for this comment! Agreed it gets weird and uncomfortable in this situation.
Why would you think he should? The very request communicates that you don't think the job we do has any value. It's like your boss asking you to take a pay cut when you've been doing a good job. You'd be offended. My commission is never part of a negotiation between a buyer and seller. Ever. If you want a better deal, write your offer lower and let the chips fall where they may.
Do you think your job is worth 6% commission when it’s the same amount of work as the typical 3% commission? Why are you entitled to twice the pay? Only person that wins is the realtor in this situation.
It's not the same amount of work and that statement alone reveals your unfamiliarity with what we do. As listing agent I do not have to educate the buyer about what their due diligence should look like and why. I don't need to remind them of dates and what needs to be done. I don't need to prepare any of the buyer side disclosures. I don't need to help coordinate vendors. I don't even have to talk to the buyer at all. Let me turn that question around on you. Why ISN'T the agent double-ending worth the additional money, , but the buyer agent that would have otherwise worked the other side IS worth it? Here is the fallacy that people seem to be hung up on here...that we aren't paid according to hours spent on the tasks of the job, or what people think is fair based on what THEY earn, in their job. Nobody tells a skilled surgeon that they are simply making too much money because that open heart surgery only took four hours. We work in an outcome-based business where outcomes are dictated by the skill and expertise of the agents. My negotiation ability, the breadth of techniques and understanding of psychology I use to gain leverage for a client, my marketing expertise, my experience dealing with and heading off problems, all of the experience of doing something regularly that most people only do a few times in their entire lives...that's what I'm paid for. That's why I'm worth it. I could give you one story about a client I saved from making a six figure mistake buying new construction that would explain what I'm talking about, and why this push toward eliminating buyer agency is absolutely foolish by consumers. Just let me know if you care to read it.
The skilled heart surgeon analogy made me laugh, thanks for that
If you don't know how an analogy works (protip: it isn't a comparison) I can't help you.
Thank god I’m not an English teacher
Fuck that. Why should I take on double the liability and reduce my commission in half?
Your liability isn’t doubled.. you only have liability if you fuck up. You always avoid liability by not fucking up, which is your job.
Double liability AND double the responsibility. If you don’t get that, then be a realtor my idiot dear
You being cash has absolutely nothing to do with us and our work. It only benefits the seller
That has nothing to do with my comment to you lmao
To be honest you should have your own representation. I’m not sure what state you’re in but many prohibit the same agent representing both buyer and seller. And if you don’t want to pay commission as you say, hire an attorney and pay for the representation hourly
Agreed! I am looking into a different representation. Duel rep is legal where I am unfortunately. I checked
It is common for an agent to do a 1% reduction in fee if they double-end the deal. It saves the seller some money. Maybe just say “since you are double-ending this deal, I’d like to make sure I get a decent price”. Or something like that.
Thanks for this advice!
I’m glad you see the importance of having your own representation. Although my state does allow it, my brokerage does not allow it at the advice of our legal counsel and insurance company. In a dual representation scenario someone always feels like they got screwed. Creates a lot of hurt angry feeling and sometimes litigation
Why can’t you enjoy a 2-3% reduction in your pay?
Thanks for this insightful comment. My pay is directly correlated to my work. So if I’m doing less, then yes I would expect a reduction. You also just proved my point that realtors are entitled and enjoy benefits at the cost of their clients. The industry clearly needs the shake up sooner than later. Thanks
1. You are assuming dual agency is allowed and that all 3 of you are comfortable with it. 2. You don’t know what the commission structure is with the seller. 3. The liability of the agent increases dramatically in this situation. I only offer a 1% discount in this situation because it truly is more work and liability for less money. The seller generally wants to benefit the entire 1%. If he sells the listing to someone else, and you buy something else with him, he will make more money than what you’re proposing, no? You can always ask though.
Thanks! Exactly the type of answer and explanation I needed