Sellers, pls stop offering pay buyer's agent commission!

[Anonymous]

Any attempt to defaraud consumer,

Just go to ,

https://www.marylandattorneygeneral.gov/

[Anonymous]

Anonymous wrote:Why not offer to pay Buyer's commission...but of course, you would expect that Buyer to submit a higher offer compared to a buyer where you aren't paying the commission.

Certainly, there is value to a Buyer to be able to wrap that commission into a mortgage payment vs. paying cash out-of-pocket via hourly rates or a lump sum at closing.

Lots of people will wrap the commission in the mortgage. Whether or not the seller pays the buyer commission totally depends on the overall offer and the competitiveness of the market. If list is $1 million and you want me to pay your buyer commission of 2% and you offer me $1,020,000, I’ll pay that commission. However, if someone else offers me the same amount with no request to pay a buyer commission, you’re going to lose.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Why not offer to pay Buyer's commission...but of course, you would expect that Buyer to submit a higher offer compared to a buyer where you aren't paying the commission.

Certainly, there is value to a Buyer to be able to wrap that commission into a mortgage payment vs. paying cash out-of-pocket via hourly rates or a lump sum at closing.

Lots of people will wrap the commission in the mortgage. Whether or not the seller pays the buyer commission totally depends on the overall offer and the competitiveness of the market. If list is $1 million and you want me to pay your buyer commission of 2% and you offer me $1,020,000, I’ll pay that commission. However, if someone else offers me the same amount with no request to pay a buyer commission, you’re going to lose.

OP here: yea, the economic logics of these realtors defending the buyer agent commission is completely upside down. Of course taking out 2-3% commission makes the deal better for both buyer and seller

[Anonymous]

Anonymous wrote:

Anonymous wrote:Why not offer to pay Buyer's commission...but of course, you would expect that Buyer to submit a higher offer compared to a buyer where you aren't paying the commission.

Certainly, there is value to a Buyer to be able to wrap that commission into a mortgage payment vs. paying cash out-of-pocket via hourly rates or a lump sum at closing.

Yes, wrap that commission into the mortgage! Do the math and that $30k commission becomes $75k by the time you are done paying it off.

well in a perfect market that would be counterbalanced by a lower home price … the only real way to help the consumer is to bring the fees down, which HOPEFULLY a more transparent and free market will do.

[Anonymous]

There are really 2 issues here.

1) Are buyer's agents totally obsolete? No.

2) Should realtors be paid 6% commission? No.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Why not offer to pay Buyer's commission...but of course, you would expect that Buyer to submit a higher offer compared to a buyer where you aren't paying the commission.

Certainly, there is value to a Buyer to be able to wrap that commission into a mortgage payment vs. paying cash out-of-pocket via hourly rates or a lump sum at closing.

Yes, wrap that commission into the mortgage! Do the math and that $30k commission becomes $75k by the time you are done paying it off.

Well, why does anyone get a mortgage then by that logic?

[Anonymous]

Anonymous wrote:

Anonymous wrote:If they are offering to pay no need for you to sign a contract.

But how would this "buyer's" agent get paid if they don't have an actual contract with the buyer?

I suppose the buyer would work without an agent, thus trying to lower the sales price by 3% or get seller concessions worth the 3%

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:really???

No, I doubt this really happened. Or if it did, I am sure OP did something to provoke the response.

There are some unhinged people in this forum who are obsessed about agent compensation. Have been for years.

They thought the NAR settlement would disrupt compensation models. Maybe it will, but it hasn’t yet, namely because the settlement merely forbid the advertising of buyer agent compensation in the MLS. It didn’t do anything actually restricting buyer agent compensation.

In other words, nothing has really changed. And that’s OK.

This is what happens when you obsess about one small piece of a financial transaction instead of seeing the forest for the trees.

And let me just cut off your predictable response: No, I am not an agent and I do not work in the real estate industry in any way.

Who isn’t obsessed with paying 6% of the value of your house to people who either do minimal work for you, or don’t work for you at all? Six percent is a LOT. That would be almost 40% of the appreciation of my house, and would be the single biggest cost of the transaction - more than lender fees, more than title insurance, more than taxes. It’s a massive market failure.

Setting aside the point that 6% hasn’t been typical in well over two decades, you sound math challenged. Or maybe you just haven’t owned your house very long.

The only reason 5% seems so much now is the wild appreciation in houses in the first place. You probably don’t think THAT appreciation was ridiculous, right?

When houses cost $100,000, 6% commission might have netted around $1,200 for an individual agent after splits with their brokerage. Was that a reasonable charge to get a deal done?

It’s just now that houses cost closer to $1 million. At 5% that’s netting probably around $10,000 for an individual agent after splits and other brokerage fees. Is it a lot? Sure. But that’s driven by the value of the home. And if you bought that home at $100,000 and are now selling at $1 million, you’re really going to have a hissy fit over $50,000 in commission charges?

FFS yes I am having a hissy fit over FIFTY THOUSAND DOLLARS. That is a TON of money, the single biggest fee in the transaction, and in my particular case would amount to 40% of my appreciation. It’s absolutely absurd. I accept that I’ll probably end up paying some agents fees because the market hasn’t corrected yet (and there is still collusion) but I’m going to minimize what I can.

I'm a neutral party to this dispute (and a new poster to this thread).
I'm not a realtor, I'm not an agent, I'm not a lender, I have absolutely nothing to do with the real estate industry at all.

What I am, is simply curious as to how you're still struggling to grasp the logic, here?

You’re seeking to procure top-tier pricing for your property (profitting significantly beyond what you initially invested) while simultaneously expecting to pay minimal commission?

You're happy to reap the benefits⅞ of an overabundantly inflated real estate market; and yet... somehow you believe that no one else but you deserves a share of the gains?

There's a term for your mindset — it's called greed.

You're greedy.

And greed is such an ugly look.

lolololol

oh lololol

oh honey

Well, yes, I’m ‘greedy’ but as a seller, I’d rather share with my buyer than the buyers agent.

[Anonymous]

What I’ll never understand is any buyer’s agent would be paid on commission. It takes the same amount of work to help someone by a $500k house vs. one that costs $1.5M or $3M. Why should the fee be 6 times higher because I’m spending more? If I cannot find an agent who will accept a flat rate, I won’t use a buyer’s agent in the future.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:really???

No, I doubt this really happened. Or if it did, I am sure OP did something to provoke the response.

There are some unhinged people in this forum who are obsessed about agent compensation. Have been for years.

They thought the NAR settlement would disrupt compensation models. Maybe it will, but it hasn’t yet, namely because the settlement merely forbid the advertising of buyer agent compensation in the MLS. It didn’t do anything actually restricting buyer agent compensation.

In other words, nothing has really changed. And that’s OK.

This is what happens when you obsess about one small piece of a financial transaction instead of seeing the forest for the trees.

And let me just cut off your predictable response: No, I am not an agent and I do not work in the real estate industry in any way.

Who isn’t obsessed with paying 6% of the value of your house to people who either do minimal work for you, or don’t work for you at all? Six percent is a LOT. That would be almost 40% of the appreciation of my house, and would be the single biggest cost of the transaction - more than lender fees, more than title insurance, more than taxes. It’s a massive market failure.

Setting aside the point that 6% hasn’t been typical in well over two decades, you sound math challenged. Or maybe you just haven’t owned your house very long.

The only reason 5% seems so much now is the wild appreciation in houses in the first place. You probably don’t think THAT appreciation was ridiculous, right?

When houses cost $100,000, 6% commission might have netted around $1,200 for an individual agent after splits with their brokerage. Was that a reasonable charge to get a deal done?

It’s just now that houses cost closer to $1 million. At 5% that’s netting probably around $10,000 for an individual agent after splits and other brokerage fees. Is it a lot? Sure. But that’s driven by the value of the home. And if you bought that home at $100,000 and are now selling at $1 million, you’re really going to have a hissy fit over $50,000 in commission charges?

The vast majority of sellers are not in a position where they bought for $100,000 and selling for $1 million, and that 50k matters.

There are some who stay in a house for 3-4 decades, but on average in this day and age, people are more mobile - or need to be. Sometimes the unexpected happens and they need to move. Most people are not as rich as DCUM and 50k or 5% of their home’s value is a pretty big hit on their finances. So you can add me to the hissy fit pile as well.

I mean, even if you were the person who’s to make 900k (taxable) gain on your house sale, why would you happily pay 25-30K to the buyers agent on top of your agents commission? Especially if the place sells within one day with multiple offers?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Why not offer to pay Buyer's commission...but of course, you would expect that Buyer to submit a higher offer compared to a buyer where you aren't paying the commission.

Certainly, there is value to a Buyer to be able to wrap that commission into a mortgage payment vs. paying cash out-of-pocket via hourly rates or a lump sum at closing.

Lots of people will wrap the commission in the mortgage. Whether or not the seller pays the buyer commission totally depends on the overall offer and the competitiveness of the market. If list is $1 million and you want me to pay your buyer commission of 2% and you offer me $1,020,000, I’ll pay that commission. However, if someone else offers me the same amount with no request to pay a buyer commission, you’re going to lose.

OP here: yea, the economic logics of these realtors defending the buyer agent commission is completely upside down. Of course taking out 2-3% commission makes the deal better for both buyer and seller

“It is difficult to get a man to understand something, when his salary depends on his not understanding it.”

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:really???

No, I doubt this really happened. Or if it did, I am sure OP did something to provoke the response.

There are some unhinged people in this forum who are obsessed about agent compensation. Have been for years.

They thought the NAR settlement would disrupt compensation models. Maybe it will, but it hasn’t yet, namely because the settlement merely forbid the advertising of buyer agent compensation in the MLS. It didn’t do anything actually restricting buyer agent compensation.

In other words, nothing has really changed. And that’s OK.

This is what happens when you obsess about one small piece of a financial transaction instead of seeing the forest for the trees.

And let me just cut off your predictable response: No, I am not an agent and I do not work in the real estate industry in any way.

Who isn’t obsessed with paying 6% of the value of your house to people who either do minimal work for you, or don’t work for you at all? Six percent is a LOT. That would be almost 40% of the appreciation of my house, and would be the single biggest cost of the transaction - more than lender fees, more than title insurance, more than taxes. It’s a massive market failure.

Setting aside the point that 6% hasn’t been typical in well over two decades, you sound math challenged. Or maybe you just haven’t owned your house very long.

The only reason 5% seems so much now is the wild appreciation in houses in the first place. You probably don’t think THAT appreciation was ridiculous, right?

When houses cost $100,000, 6% commission might have netted around $1,200 for an individual agent after splits with their brokerage. Was that a reasonable charge to get a deal done?

It’s just now that houses cost closer to $1 million. At 5% that’s netting probably around $10,000 for an individual agent after splits and other brokerage fees. Is it a lot? Sure. But that’s driven by the value of the home. And if you bought that home at $100,000 and are now selling at $1 million, you’re really going to have a hissy fit over $50,000 in commission charges?

The vast majority of sellers are not in a position where they bought for $100,000 and selling for $1 million, and that 50k matters.

There are some who stay in a house for 3-4 decades, but on average in this day and age, people are more mobile - or need to be. Sometimes the unexpected happens and they need to move. Most people are not as rich as DCUM and 50k or 5% of their home’s value is a pretty big hit on their finances. So you can add me to the hissy fit pile as well.

I mean, even if you were the person who’s to make 900k (taxable) gain on your house sale, why would you happily pay 25-30K to the buyers agent on top of your agents commission? Especially if the place sells within one day with multiple offers?

+1 There's no scenario where tens of thousands of dollars just don't matter to the buyer or seller.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Why not offer to pay Buyer's commission...but of course, you would expect that Buyer to submit a higher offer compared to a buyer where you aren't paying the commission.

Certainly, there is value to a Buyer to be able to wrap that commission into a mortgage payment vs. paying cash out-of-pocket via hourly rates or a lump sum at closing.

Yes, wrap that commission into the mortgage! Do the math and that $30k commission becomes $75k by the time you are done paying it off.

Well, why does anyone get a mortgage then by that logic?

DP here. By your logic, why limit the mortgage amount at all? Why not just pay you realtors 25% since the loan amount doesn't matter according to you???

[Anonymous]

I’m a foreigner and have bought houses overseas. For comparison’s sake, agents in the UK and Australia act for the seller and in Sydney the typical commission is 2-2.5% while in London it’s 1.8-2.5% including VAT. Buyers agents are not common and probably are more used at the very high end of the market. Is there anything special or different about how the real estate market works here that would justify higher fees?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Why not offer to pay Buyer's commission...but of course, you would expect that Buyer to submit a higher offer compared to a buyer where you aren't paying the commission.

Certainly, there is value to a Buyer to be able to wrap that commission into a mortgage payment vs. paying cash out-of-pocket via hourly rates or a lump sum at closing.

Yes, wrap that commission into the mortgage! Do the math and that $30k commission becomes $75k by the time you are done paying it off.

Well, why does anyone get a mortgage then by that logic?

DP here. By your logic, why limit the mortgage amount at all? Why not just pay you realtors 25% since the loan amount doesn't matter according to you???

Well, this is a silly argument. At some level the mortgage payments, no matter what they are composed, become too unaffordable for someone.

The only salient point is that many buyers don't have $10k+ sitting in their pocket to pay a buyer at closing, but they can easily pay the $25/month in added mortgage costs to pay the buyer's fee over 30 years.

Let's face it all...the new structure isn't a great deal for the buyer unless they are paying less for the house...which I don't see happening.