3 ms·
It doesn't sound like you negotiated well and is a sign you could use an agent :) But seriously, imagine you and I are both bidding $1,000,000 on a house. You
by xyzelement 3y ago
It doesn't sound like you negotiated well and is a sign you could use an agent :)
But seriously, imagine you and I are both bidding $1,000,000 on a house. You have an agent, so if your bid is accepted, your agent and the sellers agent each get $30,000.
I don't have an agent. In my offer, I write "the sellers agent gets the usual 3%, and I am allocating the 3% that the buyer's agent would get towards the seller instead." That means for the seller's agent there's no difference whether I use an agent or not, but to the seller themselves, my offer looks $30,000 better than yours because I am sweetening the deal using that $ I'd otherwise give my realtor.
All that said, I used a realtor on my house purchase despite being financially savvy and a good negotiator because they actually helped us find the right house, and they were well worth the fee.
- ralph84 3y agoThe commission is spelled out in the listing contract between the seller and their agent. The buyer is not a party to that contract and can’t dictate changes to it.
- sib 3y agoWell, sorta. The contract between the seller and their broker/agent definitely reserves (typically) 3% for the buyer side broker/agent. What happens to that 3% is definitely under the influence of the buyer. We negotiated a 50/50 split of the 3% back to us as the buyer in the most recent house that we bought. I guess we could have instead offered it as an incremental incentive to the selling party to sweeten the deal.
- xyzelement 3y agoYeah totally it's the same thing. The bottom line is you now have an extra 3% to "play with" between you, the seller's agent, and the seller that would have previously gone to the buyer's agent. How you split up that 3% depends on who's got most of the leverage in the scenario.
- ethbr1 3y agoFYI, here's what an example seller's contract from northeast FL MLS looks like: >> Broker will cooperate with and compensate, as stated below, NEFMLS brokers and any broker who reciprocates with NEFMLS. For finding a buyer ready, willing and able to purchase the Property, SELLER will pay BROKER, no later than the date of closing, a broker transaction fee of 5% of the Purchase Price, whether a buyer is secured by BROKER, SELLER, or any other person. BROKER agrees to offer cooperating broker compensation of: 2.5% of the Purchase Price to a single agent for a buyer; or 2.5% of the Purchase Price to a transaction broker for a buyer; or 1% of the Purchase Price to a non-representative broker. >> If no cooperating broker compensation is offered, the Property cannot be placed in NEFMLS. SELLER hereby directs closing attorney/settlement agent to disburse at closing all compensation to brokers payable hereunder So in this case, the seller's broker is entitled to 5%, of which 2.5% is required to be shared with a buyer's broker, if existent. In the event that no buyer's broker exists... it would be a conversation with the seller's broker as to how to dispose of the 2.5% (refund to the deal, etc.).
- xyzelement 3y agoYeah agree! Great reference to the contract language. Point being is that there's now a 30K that's freed up for creative use.
- ethbr1 3y agoHappened to have a recent contract handy. ;)
- xyzelement 3y agoCorrect, but I can make the offer with that language and the seller can review that w their agent. If the agent is "just as well off" or even ahead of the game they can direct the ~3% I whatever way makes sense to get the deal done.