As a buyer, how can I leverage new Realtor commission rules for my benefit?

[Anonymous]

OK, so you have no substantive response. I was a NP, by the way. I've never heard anyone in real life or on the internet actually have anything positive to say about buyer's agents, so you're the first. Hard to say why you think you know more than me, I've bought and sold several houses with and without agents and it's worked out perfectly fine except that I regret the times when I felt like we might as well have a buyer's agent because they would be paid by the seller either way.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Okay can someone who isn’t a realtor shill kind of weigh in on the best ways to leverage these new rules? I’m tired of absolute idiots becoming realtors just showing me a house I want to see, then maybe do some limpwristed, but most likely conspiratorial negotiations with a seller agent, and filling out a couple forms and charging a big percent. It’s a joke. I get realtors will continue to try their best to abuse the new rules so they can continue the grift, but how can we get around that? What hard and fast stipulations can a buyer or seller employ to mitigate the fckery these days?

The best way to leverage these new rules is to not use a buyer's agent. Ask the listing agent to show you the home. You should not have to pay extra or sign any agreements to pay compensation for this.

Here's how this will help buyers:

Buyer A uses a buyer's agent and owes them 2% commission. They offer $1M with a seller concession of 2% to go to the buyer's agent. So effectively, Buyer A is offering $980K (actually a little less because the seller has to pay taxes and commission on that extra 2%/$20K).

Buyer B is unrepresented. They offer $985K. No seller concessions.

So all else being equal, Buyer B just won the house while paying $15K less than the other offer. Both the buyer and seller are better off for not having a second greedy realtor trying to get cut in on the deal.

That's just the thing, however. It's extremely rare for "all else being equal" to be true with competing offers where the only consideration is a tiny differential in price offered. Also, in your example, Buyer B is overpaying for the house.

Are you saying that Buyer B should instead offer $980,001? Sure, if they knew what Buyer A was offering, but they don't. So isn't it the case then that every highest bid offer is "overpaying" if they are more than $1 over the next highest offer?

Also, why wouldn't "everything being equal" be true? Again, the "special sauce" that a buyers agent brings is, what exactly? If it's "waive contingencies", then why wouldn't the seller just go back to Buyer B and say "if you can keep your offer at the same level, but waive contingencies, we will accept? Sending that email is worth an extra $5k if I am the seller.

Say you have two offers like you outline, with a $5K difference. Things that could be different in them:

1) Contingencies, including home sale contingency
2) Settlement dates
3) Rent backs
4) Requests for closing credits (especially help w/ closing costs)
5) Financial strength of the buyer. I'm not taking an offer for 5K more if their financials are materially weaker
6) Requests for things to convey

Just to name a few off the top of my head.

You're acting like money is the only thing that makes offers different. It's not.

[Anonymous]

Anonymous wrote:OK, so you have no substantive response. I was a NP, by the way. I've never heard anyone in real life or on the internet actually have anything positive to say about buyer's agents, so you're the first. Hard to say why you think you know more than me, I've bought and sold several houses with and without agents and it's worked out perfectly fine except that I regret the times when I felt like we might as well have a buyer's agent because they would be paid by the seller either way.

I didn't say anything positive or negative about buyer's agents. I simply pointed out that it's weird that OP thinks there something to be "leveraged" for a buyer as a result of the settlement new ways of doing business. Ultimately, there's no real benefit to the buyer here. The upside, such as there is any, is exclusively on the seller side.

The theory is this will bring home prices down. But agent compensation doesn't dictate home prices -- supply and demand does.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Okay can someone who isn’t a realtor shill kind of weigh in on the best ways to leverage these new rules? I’m tired of absolute idiots becoming realtors just showing me a house I want to see, then maybe do some limpwristed, but most likely conspiratorial negotiations with a seller agent, and filling out a couple forms and charging a big percent. It’s a joke. I get realtors will continue to try their best to abuse the new rules so they can continue the grift, but how can we get around that? What hard and fast stipulations can a buyer or seller employ to mitigate the fckery these days?

The best way to leverage these new rules is to not use a buyer's agent. Ask the listing agent to show you the home. You should not have to pay extra or sign any agreements to pay compensation for this.

Here's how this will help buyers:

Buyer A uses a buyer's agent and owes them 2% commission. They offer $1M with a seller concession of 2% to go to the buyer's agent. So effectively, Buyer A is offering $980K (actually a little less because the seller has to pay taxes and commission on that extra 2%/$20K).

Buyer B is unrepresented. They offer $985K. No seller concessions.

So all else being equal, Buyer B just won the house while paying $15K less than the other offer. Both the buyer and seller are better off for not having a second greedy realtor trying to get cut in on the deal.

That's just the thing, however. It's extremely rare for "all else being equal" to be true with competing offers where the only consideration is a tiny differential in price offered. Also, in your example, Buyer B is overpaying for the house.

Are you saying that Buyer B should instead offer $980,001? Sure, if they knew what Buyer A was offering, but they don't. So isn't it the case then that every highest bid offer is "overpaying" if they are more than $1 over the next highest offer?

Also, why wouldn't "everything being equal" be true? Again, the "special sauce" that a buyers agent brings is, what exactly? If it's "waive contingencies", then why wouldn't the seller just go back to Buyer B and say "if you can keep your offer at the same level, but waive contingencies, we will accept? Sending that email is worth an extra $5k if I am the seller.

Say you have two offers like you outline, with a $5K difference. Things that could be different in them:

1) Contingencies, including home sale contingency
2) Settlement dates
3) Rent backs
4) Requests for closing credits (especially help w/ closing costs)
5) Financial strength of the buyer. I'm not taking an offer for 5K more if their financials are materially weaker
6) Requests for things to convey

Just to name a few off the top of my head.

You're acting like money is the only thing that makes offers different. It's not.

None of those have anything to do with whether a buyers agent is present or not. And all of them can be negotiated (with or without an agent), and even included in the seller requirements to all people offering. And the closing credit is EXACTLY the issue that an unrepresented buyer makes stronger, since they don't need that credit to pay their agent.

[Anonymous]

Anonymous wrote:

Anonymous wrote:OK, so you have no substantive response. I was a NP, by the way. I've never heard anyone in real life or on the internet actually have anything positive to say about buyer's agents, so you're the first. Hard to say why you think you know more than me, I've bought and sold several houses with and without agents and it's worked out perfectly fine except that I regret the times when I felt like we might as well have a buyer's agent because they would be paid by the seller either way.

I didn't say anything positive or negative about buyer's agents. I simply pointed out that it's weird that OP thinks there something to be "leveraged" for a buyer as a result of the settlement new ways of doing business. Ultimately, there's no real benefit to the buyer here. The upside, such as there is any, is exclusively on the seller side.

The theory is this will bring home prices down. But agent compensation doesn't dictate home prices -- supply and demand does.

Agent fees act as a tax on home prices. Taxes absolutely impact final prices, because they create deadweight loss, and thus affect where supply and demand meet up.

[Anonymous]

Anonymous wrote:

Anonymous wrote:OK, so you have no substantive response. I was a NP, by the way. I've never heard anyone in real life or on the internet actually have anything positive to say about buyer's agents, so you're the first. Hard to say why you think you know more than me, I've bought and sold several houses with and without agents and it's worked out perfectly fine except that I regret the times when I felt like we might as well have a buyer's agent because they would be paid by the seller either way.

I didn't say anything positive or negative about buyer's agents. I simply pointed out that it's weird that OP thinks there something to be "leveraged" for a buyer as a result of the settlement new ways of doing business. Ultimately, there's no real benefit to the buyer here. The upside, such as there is any, is exclusively on the seller side.

The theory is this will bring home prices down. But agent compensation doesn't dictate home prices -- supply and demand does.

You don't think having the choice of whether to engage a buyer's agent benefits buyers? I fail to see why having the option to have a stronger offer and lower price with no buyer's agent compensation required of the seller is not a great thing for buyers. Very happy to pay less for my next house and not have to deal with a money sucking parasite who is just pressuring me to pay more. As is obvious from all of the press and threads on this, buyers AND sellers have been rejoicing at this settlement. It's a win-win for everyone who isn't a buyer's agent.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:If you want the lowest fee, just don't use a buyer's agent at all. It's not that complicated.

+1 Just contact the listing agent. Tell them you're an unrepresented buyer and you want to see the property. Refuse to sign any agreement for them or anyone else to represent you.

Wrote two contracts for unrepresented buyers on Tuesday and played them off each other. I even made one drop the VA financing even though the interest rate was better. After I squeezed them dry, the sellers did about $73,000 more than the best comp from June This is going to be a lot better for sellers because the buyers are easy to manipulate. I will take unrepresented buyers any day.

You mean, because there were no buyers agents there to advise their clients to offer above asking, with escalation clauses, and to waive inspection and all other contingencies? That kind of expert advice?

They were unrepresented and I gave them no advice. For their offer to be considered they had to waive all contingencies. That's why one buyer had to change from VA to conventional financing because he could not waive the appraisal contingency. No escalation clauses. I did several rounds of best and final offers until both reached top of the loan for which they qualified.

Is this post from 2021? You must have listed way low to get this kind of interest

“You” didn’t get them to drop the VA financing, the appraisal and competing offers did.

+1

Wouldn’t the same thing have happened even with a buyer’s agent except you’d be communicating your seller’s expectation/counter offer to the agent instead of directly to the buyer? It’s not like only unrepresented buyers get into bidding wars. What exactly would a buyer’s agent have done differently when there was a competing buyer? Waiving contingencies and escalating seems pretty standard if it’s decent home in a good area so I’m not sure how this story is notable compared to the thousands of other similar sales scenarios. Sounds like you’re really stretching things to prove your worth.

Also, if you’re talking about a $1M property then the buyers saved themselves 25-30k in the process. Seems like the buyers came out ahead compared to where they would have been with an agent.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:If you want the lowest fee, just don't use a buyer's agent at all. It's not that complicated.

+1 Just contact the listing agent. Tell them you're an unrepresented buyer and you want to see the property. Refuse to sign any agreement for them or anyone else to represent you.

Wrote two contracts for unrepresented buyers on Tuesday and played them off each other. I even made one drop the VA financing even though the interest rate was better. After I squeezed them dry, the sellers did about $73,000 more than the best comp from June This is going to be a lot better for sellers because the buyers are easy to manipulate. I will take unrepresented buyers any day.

This. Unrepresented buyers (I don't care how smart they think they are, or if they have a real estate attorney who can read a contract) are at a huge disadvantage. Period. I am a listing agent primarily, and I can tell you an unrepresented buyer, is rarely getting a better deal than if you had representation and often is not winning the contract if you are in a multiple-offer situation, No matter what all these anonymous posters say. I have seen it time and time again. I have seen highly skilled and hard working buyers agents literally make the difference in getting clients into a home. I'm sure there will be people on here who SWEAR otherwise or say I am biased, but I live this everyday and know how transactions play out. I can tell you going unrepresented without a *skilled realtor* (not just anyone) puts you at a disadvantage in many ways. If you think buying a home is like buying a car, you are wrong.

Maybe you are right. But the problem is that 90% of realtors are not very skilled. 90% of buyers aren’t getting the benefits of the skilled realtor you are talking about. They will be better off not paying these high realtor fees.

DP but also up until now it was standard to have a buyer’s agent. As buyers increasingly decide not to get an agent, sellers agents are going to have to deal more with unrep’d buyers. It’s not going to be the one random buyer offer vs multiple agent offers. Also I’m betting buyers agents will come up with a new fee structure (maybe hourly, 1%, or some sort of rebate). So even the buyers who do get an agent will be paying less to them and sellers will also not want to offer buyer agent commissions.

Realtors need to wake up and realize the days of 5-6% are going the way of the dodo and adjust accordingly if you want to stay competitive. It won’t be long until AI can handle writing an offer for a cheap flat fee.

[Anonymous]

Anonymous wrote:as an agent i just got such a buyer and it was great! buyer grossly overpaid and seller cut me additional commission. Buyer had no clue.

So you represented a buyer … who grossly overpaid? What exactly was their benefit in hiring you? You are bragging about getting inflated pay for not even helping your client.

Do you even realize you’re proving the point of why buyers don’t want to pay an agent.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Okay can someone who isn’t a realtor shill kind of weigh in on the best ways to leverage these new rules? I’m tired of absolute idiots becoming realtors just showing me a house I want to see, then maybe do some limpwristed, but most likely conspiratorial negotiations with a seller agent, and filling out a couple forms and charging a big percent. It’s a joke. I get realtors will continue to try their best to abuse the new rules so they can continue the grift, but how can we get around that? What hard and fast stipulations can a buyer or seller employ to mitigate the fckery these days?

I'm not a Realtor or an agent, and I think the point is that there's no "leveraging" these new rules. They will inherently put buyers at a disadvantage, no matter how you look at it. Yeah, I get that there are a lot of people who fancy themselves smart and capable of doing a transaction like this without representation, but in my mind it's akin to divorcing someone without your own lawyer.

I'm not sure where, exactly, you got this idea that there's some benefit to be "leveraged."

Potentially the seller benefits by paying reduced commission overall. But I don't see any inherent benefit to buyers. I see only downside risks.

The benefit to be leveraged is that it's now substantially easier to limit the amount of the pie going to agents, which means more for buyers and sellers. Seems reasonable to ask about the mechanics of limiting the agents' take and how to best capture any value lost by agents as a buyer.

[Anonymous]

I think agent should not be getting anything more than than 0.5%. By joining lots of big brokers and agencies there is a lot of fat that needs to get rid of. All this is making housing expensive, even if it is by a few %

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Okay can someone who isn’t a realtor shill kind of weigh in on the best ways to leverage these new rules? I’m tired of absolute idiots becoming realtors just showing me a house I want to see, then maybe do some limpwristed, but most likely conspiratorial negotiations with a seller agent, and filling out a couple forms and charging a big percent. It’s a joke. I get realtors will continue to try their best to abuse the new rules so they can continue the grift, but how can we get around that? What hard and fast stipulations can a buyer or seller employ to mitigate the fckery these days?

The best way to leverage these new rules is to not use a buyer's agent. Ask the listing agent to show you the home. You should not have to pay extra or sign any agreements to pay compensation for this.

Here's how this will help buyers:

Buyer A uses a buyer's agent and owes them 2% commission. They offer $1M with a seller concession of 2% to go to the buyer's agent. So effectively, Buyer A is offering $980K (actually a little less because the seller has to pay taxes and commission on that extra 2%/$20K).

Buyer B is unrepresented. They offer $985K. No seller concessions.

So all else being equal, Buyer B just won the house while paying $15K less than the other offer. Both the buyer and seller are better off for not having a second greedy realtor trying to get cut in on the deal.

That's just the thing, however. It's extremely rare for "all else being equal" to be true with competing offers where the only consideration is a tiny differential in price offered. Also, in your example, Buyer B is overpaying for the house.

Are you saying that Buyer B should instead offer $980,001? Sure, if they knew what Buyer A was offering, but they don't. So isn't it the case then that every highest bid offer is "overpaying" if they are more than $1 over the next highest offer?

Also, why wouldn't "everything being equal" be true? Again, the "special sauce" that a buyers agent brings is, what exactly? If it's "waive contingencies", then why wouldn't the seller just go back to Buyer B and say "if you can keep your offer at the same level, but waive contingencies, we will accept? Sending that email is worth an extra $5k if I am the seller.

Say you have two offers like you outline, with a $5K difference. Things that could be different in them:

1) Contingencies, including home sale contingency
2) Settlement dates
3) Rent backs
4) Requests for closing credits (especially help w/ closing costs)
5) Financial strength of the buyer. I'm not taking an offer for 5K more if their financials are materially weaker
6) Requests for things to convey

Just to name a few off the top of my head.

You're acting like money is the only thing that makes offers different. It's not.

None of those have anything to do with whether a buyers agent is present or not. And all of them can be negotiated (with or without an agent), and even included in the seller requirements to all people offering. And the closing credit is EXACTLY the issue that an unrepresented buyer makes stronger, since they don't need that credit to pay their agent.

There you go again, being awfully sure and very wrong.

Closing cost credits take a variety of forms. Usually, they are literally to pay for things like title fees and taxes. Buyers request these things for cash flow reasons more than anything. Sometimes they'll even say "I'll pay you $10,000 more if you'll give me $10,000 in closing cost help." This has NOTHING TO DO WITH PAYING A BUYER AGENT.

Sure, people can negotiate these things themselves. But you're a case in point of people who don't understand these dynamics and how they affect and offer -- you're your worst enemy in negotiations, because you're so sure you know everything ... and you actually don't have a clue. This goes back to your simplistic "all things being equal" comment. There's no such thing. No two offers are going to be exactly alike except for the price.

Are agents overpaid? Yes, but that's a factor of the higher value of houses. Are buyer agents pointless? I know you think so, but your absurd thinking is so black and white. You are, simply, far too emotional about these things. And the entire reason for agency is to take emotion out of transactions and protect people from themselves.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Okay can someone who isn’t a realtor shill kind of weigh in on the best ways to leverage these new rules? I’m tired of absolute idiots becoming realtors just showing me a house I want to see, then maybe do some limpwristed, but most likely conspiratorial negotiations with a seller agent, and filling out a couple forms and charging a big percent. It’s a joke. I get realtors will continue to try their best to abuse the new rules so they can continue the grift, but how can we get around that? What hard and fast stipulations can a buyer or seller employ to mitigate the fckery these days?

I'm not a Realtor or an agent, and I think the point is that there's no "leveraging" these new rules. They will inherently put buyers at a disadvantage, no matter how you look at it. Yeah, I get that there are a lot of people who fancy themselves smart and capable of doing a transaction like this without representation, but in my mind it's akin to divorcing someone without your own lawyer.

I'm not sure where, exactly, you got this idea that there's some benefit to be "leveraged."

Potentially the seller benefits by paying reduced commission overall. But I don't see any inherent benefit to buyers. I see only downside risks.

The benefit to be leveraged is that it's now substantially easier to limit the amount of the pie going to agents, which means more for buyers and sellers. Seems reasonable to ask about the mechanics of limiting the agents' take and how to best capture any value lost by agents as a buyer.

It's not, though. There's zero evidence that that's true or likely to happen. If anything, it's made agent compensation even more opaque. At least under the prior arrangement, the numbers were there for all to see on the MLS.

[Anonymous]

Anonymous wrote:

Anonymous wrote:as an agent i just got such a buyer and it was great! buyer grossly overpaid and seller cut me additional commission. Buyer had no clue.

So you represented a buyer … who grossly overpaid? What exactly was their benefit in hiring you? You are bragging about getting inflated pay for not even helping your client.

Do you even realize you’re proving the point of why buyers don’t want to pay an agent.

Wow, reading comprehension is not your strength is it? OP is claiming to be a SELLER who took advantage of an unrepresented buyer.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Okay can someone who isn’t a realtor shill kind of weigh in on the best ways to leverage these new rules? I’m tired of absolute idiots becoming realtors just showing me a house I want to see, then maybe do some limpwristed, but most likely conspiratorial negotiations with a seller agent, and filling out a couple forms and charging a big percent. It’s a joke. I get realtors will continue to try their best to abuse the new rules so they can continue the grift, but how can we get around that? What hard and fast stipulations can a buyer or seller employ to mitigate the fckery these days?

I'm not a Realtor or an agent, and I think the point is that there's no "leveraging" these new rules. They will inherently put buyers at a disadvantage, no matter how you look at it. Yeah, I get that there are a lot of people who fancy themselves smart and capable of doing a transaction like this without representation, but in my mind it's akin to divorcing someone without your own lawyer.

I'm not sure where, exactly, you got this idea that there's some benefit to be "leveraged."

Potentially the seller benefits by paying reduced commission overall. But I don't see any inherent benefit to buyers. I see only downside risks.

The benefit to be leveraged is that it's now substantially easier to limit the amount of the pie going to agents, which means more for buyers and sellers. Seems reasonable to ask about the mechanics of limiting the agents' take and how to best capture any value lost by agents as a buyer.

It's not, though. There's zero evidence that that's true or likely to happen. If anything, it's made agent compensation even more opaque. At least under the prior arrangement, the numbers were there for all to see on the MLS.

OK, agent. Before, buyers had little control over how much was paid to their agent. Now, agent compensation is entirely up to the buyer, and can be more effectively competed down. Less money going to the buyer's agent means more money for the parties to the transaction. If you are still able to get some buyers to give you 2.5%, good for you! But I'd be willing to bet your next commission payment that it will be fewer and fewer buyers who are so willing as the months tick by.

Who cares how "opaque" compensation is? No one needs to know what buyers are paying their agent, just as no one knew under the old system what sellers were paying their agent.