Sellers, pls stop offering pay buyer's agent commission!
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Anonymous
This is silly. As a seller and buyer most buyers (not first time buyers) can do it on their own. I have a RE attorney and rather have him check everything, but the paperwork is really easy if you know what you are doing. you would save money with an unrepped buyer. Honestly the commissions are way too high. I understand it was like that when you could buy a home for less but times have changed and homes are expensive but the work for a realtor hasn’t changed. Some realtors also might hurt the purchase process too. I negotiate for a living and when I bought my first home our realtor gave us awful advice and we ended up loosing the home by $5k! Learned our lesson! Maybe sellers want buyers to have realtors so they can sell a home with issues and they aren’t liable for disclosing, I don’t know, but I don’t see the upside unless you are a first time buyer that can’t figure it out in your own / pay a RE attorney. |
Anonymous
NP, I am with the original PP. I am 100% using an agent to deal with a person like this. And if I have a choice between this person and one who has an agent, I am more likely to deal with the one who has an agent. Buying a house is a huge financial transaction. You use agents for many things, but one of them is arm’s length keeps emotions out of it. People like this poster are the type who are frequently wrong but rarely in doubt, and there’s no way I am going to interact directly with them in a transaction of this size. And, before the trope response is poster (because it invariably gets posted by these emotional, angry agent haters): I am not an agent myself nor am I in the industry. |
Anonymous
are you going to continue to offer 3% to the buyer’s agent? |
Anonymous
It doesn’t matter what they expect - it’s a negotiation. |
Anonymous
DP. It hasn’t been 3% in years. I would likely offer 2%. |
Anonymous
Play this out from a seller’s perspective. You list your house for $100,000 (to keep the math simple). You get two offers. Offer 1 is full price and they have a buyer agent who wants 2.5%. The buyer wants you to pay it. Your net is $97,500 (ignoring other closing costs for purposes of this example). Offer 2 is an unrepresented buyer. They offer $98,000 and point out they don’t have an agent so you will net more. Which are you taking? Spoiler: I am not automatically taking Offer 2. Too many other factors, the biggest of which is can they get to settlement? Other things I am going to be asking is how much are they offering in EMD? What is their financial situation/lending status? How difficult are they going to be on the home inspection negotiations (since they’ve already telegraphed they’re kind of miserly with their attitude about agents)? How much more work is my LISTING agent going to have to do to make this deal happen. And then I am going to have ask whether there is higher risk of the transaction not closing since the buyer isn’t represented. If the answer to all these things is satisfactory I might take Offer 2. But it’s hardly a reflex. |
Anonymous
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. |
Anonymous
Maybe. But in most cases you would split the buyers commission so indeed everyone ends up ahead. When I bought without an agent the seller’s agent dual repped us and everything went just fine. I believe sellers agent took an extra 1% of the commission and sellers got that 2% (almost 15k) back. That’s meaningful money. |
Anonymous
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I completely agree that something like this happens. We’re in the midst of buying and selling, and it’s clear that there’s a ton of peer pressure and some collusion to keep the fee percentages high. The agents all see what percentages their brokerage colleagues are getting, and their brokers review all of their agreements (buyer or seller side). There’s very little willingness to negotiate, and we’ve been told by all the agents we’ve interviewed that if there’s not a strong buyer fee (like above 2%) then we’ll lose buyers. And I believe it. We’ve also been told by all the agents that the full price agents won’t work with the discount agents. And I 100% believe that if we used a discount agent we would not get buyers who are being represented by the big brokerages. In the neighborhood we are selling in, those listed by discount brokers are sitting longer. And the agents we’ve talked to tell us that the homes are overpriced. But meanwhile the big brokerages are pushing pricing on the homes they list, and they are using getting the prices, and it’s not unusual that the buyer agent is from the same brokerage, so both agents have incentives to push the price and get the deal done.
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Anonymous
I mean it’s literally about money. If you’re so affected by this that you can’t see it’s a simple matter of getting more money out of the transaction, you sound like the emotional one. If you don’t want to talk to the buyer that’s what YOUR agent is for. |
Anonymous
All things being equal I’m taking 2, because I’m not into throwing away money. My listing agent is getting a lot lf money already out if the deal so they can do the work. This would be worth $30k to me (based on sales price for my home) so heck, I’d be perfectly willing to give the buyer a few thousand to pay a RE attorney to understand the closing process. It’s not being “miserly” to not want to throw away 30k. |
Anonymous
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? |
Anonymous
Interesting. Our neighborhood is still a sellers market so I’m not sure that would work here unless the agents literally are colluding against discount brokers like you say. I hope DOJ is taking note. All the more reason for buyers to use no broker or a discount broker though! |
Anonymous
But that’s just it: Never, ever, are two offers the same except the price. So there’s never, ever an “all things being equal” scenario. |
Anonymous
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. |