Need agent ONLY to help me with offer and closing on a house – what is the fee for this?
Need agent ONLY to help me with offer and closing on a house – what is the fee for this? – Trulia Voices
Need agent ONLY to help me with offer and closing on a house – what is the fee for this?
Burbed reader T.M. suggested that I share this with everyone. Here’s what he had to say about this thread:
Hi Burbed – thought you’d enjoy this gem of a discussion on the Advice pages of the realtor-supported website, Trulia, said “advice” consisting mainly of spammy advertisements for members of the realtors’ cartel.
Watch as a poor hapless customer in San Jose seeking advice on finding a simple fee-for-service arrangement gets over 100 self-serving, inaccurate, semi-literate replies, with realtor after realtor trying to persuade him that as a buyer, he will pay nothing if he and the seller each use 3% brokers.
Actually, T.M. had a lot more to say, but this in itself is comedy gold. Check out the thread. There’s definitely a lot of… uh… advice!
May 3rd, 2009 at 4:03 pm
Well the question was tricky. How I, a buyer, can I avoid paying a buyer agent’s commission fee if I don’t need that agent? No wonder most realtors were off-base (not to mention the number who posted while admitting they didn’t bother to go through the ocmments). And a couple of trolls hijacked the thread too.
So, there were apparently four pieces to the answer: the buyer agent’s commission is paid by the seller, the money is coming from the buyer or his bank, the contractual obligation to pay the buyer’s agent is between the seller and the seller’s agent before the buyer ever steps in, and it’s unethical in California to pay buyer agent’s commissions if you’re not a licensed agent.
As a result, there are three ways to work out a flat fee for a buyer’s agent:
* as buyer, negotiate with the seller and his agent a revised commission contract (realtors turned white at that thought)
or
* work with a seller who does not have a contract with his agent (realtors turned white at that thought)
or
* be licensed to claim the commission yourself (realtors turned white at that thought)
May 3rd, 2009 at 11:27 pm
One of the comments mentioned that taking a commission without a license was ‘unethical in California’.
Apparently California now has fundamentally different ethical standards than the rest of the world.
May 4th, 2009 at 9:30 am
So what happens with FSBO?
And so are the really rich realtors the ones who act as buyer & seller agent on the same home and get the entire 6%? After all, they’re connecting people making the best purchase of their lives! It’s gotta be like romantic matchmaking – everyone’s happy every time and they love you for introducing them!
May 4th, 2009 at 9:39 am
The agent never gets the entire 6% unless they are also the broker who owns the RE agency. The agent and broker (office) split their piece 50/50 in most cases.
I’m sure agents love to be the selling & buying agents but I’d make every effort to avoid it.
May 4th, 2009 at 8:34 pm
> as buyer, negotiate with the seller and his agent a revised commission contract (realtors turned white at that thought)
Many brokers and agents love “double ending” deals and will offer the buyer a discount for using them. Of course this may not been in the buyer’s interest since the broker or agent can’t harm (and therefore can’t help) either party. Some states have outlawed this practice.
> The agent and broker (office) split their piece 50/50 in most cases.
Your information is badly out of date. One popular MLM brokerage offers 70/30 splits, even though the firm has to share the 30 with the agent’s upline. Many of the other offices, not being burdened by an upline commission sharing model (unless you count the broker) offer an even more generous split to agents.
> I’m sure agents love to be the selling & buying agents but I’d make every effort to avoid it.
Many independent brokers who actively market against double siding, but then a small office is less likely to double side anyway. It’s a mistake to paint the whole group with a broad brush.
There are flat fee brokerages and there are brokers who will represent the buyer for 1% provided the buyer has already selected a property and an offer price. I’m not just talking about Redfin. I’ve met several local brokers who use the same 1% business model.
May 4th, 2009 at 10:36 pm
As for the discussion on Trulia, I disagree that the buyer’s price is affected by the seller’s commission agreement (AJ’s argument that the buyer is essentially paying the commission isn’t logical), except in cases where that agreement is modified due to double siding.
The seller can’t hope to charge more money simply because he/she offered to pay higher commissions, nor would the seller offer a discount if he/she was paying lower commissions. Sellers want the most money possible, like just about all of us, and charge whatever they think they can get. One need only look at current inventory levels to see the disconnect between what sellers want and what buyers are willing to pay.
When sellers get really desperate and have to cut their prices, some will switch to discount or flat fee brokers. In that scenario a lower commission could be a function of a lower price, but it doesn’t occur in the opposite direction where cheaper commissions allow the seller to ask for less money. Nobody does that.
May 4th, 2009 at 11:02 pm
Frank, I don’t agree with your logic. I’ve heard times and again that FSBOs take advantage of not having an agent to undercut the competition, since the 6% commission is not factored in. In other words, they can price their house lower than if they had agents, the buyer can offer lower than if there were agents, and the seller might still end up with more money in the bank than if they had agents.
Your rationale seems to be that everybody’s greedy so highest price it will be. I have first-hand experience than price-setting rationales and selling decisions are nowhere as predictable as you make them to be.
May 5th, 2009 at 8:35 am
I agree completely with DreamT on this one. First, sellers can be pretty emotional (read “irrational”) when selling. Also, if I’m selling a $1.5M house with a 5% commission, that’s $75,000. If I was only paying a $10,000 commission it would absolutely affect the price I was willing to accept for the property.
A seller who is not under duress (actually, probably ALL sellers who aren’t doing a short sale) has a number they expect to get for their house when they list it. This number is net of commissions.
May 5th, 2009 at 11:48 am
Another misnomer that I saw in the Trulia thread and now this one that I am sure agents love to perpetuate– 5% is the new SF Bay Area norm for sales commissions, not 6%. I rarely, if ever, see 6% anymore.
May 6th, 2009 at 1:01 pm
How about this?
http://www.gohalfpercent.com/