Author Topic: RE Agent Commision - Negotiating  (Read 1372 times)

wombat9

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RE Agent Commision - Negotiating
« on: January 03, 2019, 12:47:04 PM »
What are some alternatives to the standard 3% buyer agent commision?

I have a property picked out and have been in touch with the seller who is ready to sell and gave me his asking price. I understand the seller usually pays the agents, but this is unlisted and I would be paying them.

Based on changes in the market Id like to try and negotiate a price reduction.
I have comps, income, expenses, etc.

Im not a good negotiator (with sellers or hiring agents), so Id like to bring in an experienced RE Agent. The property is almost $1M, so $30k for maybe a few days of work seems outrageous. Id like to pay based on the amount they reduce the price.

Id even consider hiring them as a consultant, rather than the buyers RE Agent if that is even a thing.

Any thoughts?

Jon Bon

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Re: RE Agent Commision - Negotiating
« Reply #1 on: January 03, 2019, 01:20:08 PM »
Ok first thing if you found the property by yourself and the seller has not listed it with a realtor do NOT bring in a realtor on commission, this would be unwise and they would take 3-6% of the deal for doing nothing.

You can try and find a good realtor to represent you for a flat fee (say $1000 bucks or something) who will handle the contract and negotiations for you.

You can also find a lawyer who does the same thing.

Problem with finding a realtor is most are shady and will 100% try to get you to sign with them for a commission. Do not do this! my guess is most who you cold call will not be willing to do anything but be a 3% commission realtor.

Do you have a family friend, contact, acquaintance whatever that is in real estate or law at all? One of them has to be able to help you directly or know someone who is. In my state the real estate contracts are all the same and could be filled in by a 3rd grader, so the 'mystic' of the all knowing realtor is BS. In my state writing the contract and negotiations would take maybe 4-8 hours of actual work on the high end.

*Full disclosures, I don't like realtors.




BicycleB

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Re: RE Agent Commision - Negotiating
« Reply #2 on: January 03, 2019, 01:43:33 PM »
What are some alternatives to the standard 3% buyer agent commision?

I have a property picked out and have been in touch with the seller who is ready to sell and gave me his asking price. I understand the seller usually pays the agents, but this is unlisted and I would be paying them.

Based on changes in the market Id like to try and negotiate a price reduction.
I have comps, income, expenses, etc.

Im not a good negotiator (with sellers or hiring agents), so Id like to bring in an experienced RE Agent. The property is almost $1M, so $30k for maybe a few days of work seems outrageous. Id like to pay based on the amount they reduce the price.

Id even consider hiring them as a consultant, rather than the buyers RE Agent if that is even a thing.

Any thoughts?

If you're in Dallas-Fort Worth, I can get you the contact of an agent whose specialty is getting all the transaction details right, and any ambiguities presumptively resolved in your favor. Did the work on both of my friend's purchases in the last 2 years, results excellent.  I assume price negotiable, so to speak.

Elsewhere (as is suggested by the $1M price tag) - good luck!!      :)

wombat9

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Re: RE Agent Commision - Negotiating
« Reply #3 on: January 03, 2019, 02:07:08 PM »
Thanks for the tips, I share your opinion of the typical REA.

I met an agent specializing in MFH a few years ago and have a call with him next week. Ill ask about a flat fee.

Is variable fee based on price difference a thing?  Offer on the table, I know I can buy it today for lets say $1M. Would offering REA 5-10% of the difference from current asking price be worthwhile. Seems like a good incentive.

I'm a red panda

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Re: RE Agent Commision - Negotiating
« Reply #4 on: January 03, 2019, 02:13:22 PM »
The seller pays the agent. As a buyer, it's not your concern what the commission is.

If it is FSBO, you just need a lawyer, not an agent.

Jon Bon

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Re: RE Agent Commision - Negotiating
« Reply #5 on: January 03, 2019, 02:58:00 PM »
The seller pays the agent. As a buyer, it's not your concern what the commission is.

If it is FSBO, you just need a lawyer, not an agent.

See this is right, but also completely wrong.

The BUYER is the only one bringing any money to the table. So it is in fact the buyers money that is used to pay the agents. I feel this is the type of comment that is often made by agents that is not completely honest.

This also means the seller is getting less out of the deal, so your offer without an agent is acutally 3-6% better then one made with an agent.



I'm a red panda

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Re: RE Agent Commision - Negotiating
« Reply #6 on: January 03, 2019, 03:36:34 PM »
The seller pays the agent. As a buyer, it's not your concern what the commission is.

If it is FSBO, you just need a lawyer, not an agent.

See this is right, but also completely wrong.

The BUYER is the only one bringing any money to the table. So it is in fact the buyers money that is used to pay the agents. I feel this is the type of comment that is often made by agents that is not completely honest.

This also means the seller is getting less out of the deal, so your offer without an agent is acutally 3-6% better then one made with an agent.

As a buyer, I've never paid an agent.  It isn't any of my business what the seller does with the money I provide them for the house.  Typically, the seller pays off the existing mortgage, pays the realtor, and maybe makes a profit.  Sometimes they don't make a profit. Sometimes they need additional money to pay off a mortgage. Some sellers work out a better deal with the realtor.
But as a buyer, I offer what the value I see the house has and have zero worry about what the realtor does make.  What changes is what the seller walks away with. As a buyer, I don't care about that.

When I did a FSBO, the buyer expected a discount because there was no realtor fee. So, in my experience, it still cost me the same as if I would have used a realtor or not.

ilsy

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Re: RE Agent Commision - Negotiating
« Reply #7 on: January 03, 2019, 04:31:21 PM »
If it is FSBO, you just need a lawyer, not an agent.
If it's FSBO and the seller and the buyer agree on the price and other conditions, you only need a title company.

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Re: RE Agent Commision - Negotiating
« Reply #8 on: January 03, 2019, 05:21:33 PM »
If it is FSBO, you just need a lawyer, not an agent.
If it's FSBO and the seller and the buyer agree on the price and other conditions, you only need a title company.

Maybe that's a jurisdiction thing. Here you need to use a lawyer. It's cheap.

Cwadda

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Re: RE Agent Commision - Negotiating
« Reply #9 on: January 03, 2019, 05:35:59 PM »
The seller pays the agent. As a buyer, it's not your concern what the commission is.

If it is FSBO, you just need a lawyer, not an agent.

See this is right, but also completely wrong.

The BUYER is the only one bringing any money to the table. So it is in fact the buyers money that is used to pay the agents. I feel this is the type of comment that is often made by agents that is not completely honest.

This also means the seller is getting less out of the deal, so your offer without an agent is acutally 3-6% better then one made with an agent.

Correct.

afox

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Re: RE Agent Commision - Negotiating
« Reply #10 on: January 03, 2019, 10:52:44 PM »
The seller pays the agent. As a buyer, it's not your concern what the commission is.


And you probably think the chinese pay the tariffs too.

ilsy

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Re: RE Agent Commision - Negotiating
« Reply #11 on: January 03, 2019, 11:35:06 PM »
If it is FSBO, you just need a lawyer, not an agent.
If it's FSBO and the seller and the buyer agree on the price and other conditions, you only need a title company.

Maybe that's a jurisdiction thing. Here you need to use a lawyer. It's cheap.
For cash purchases you also need a lawyer?

Fuzz

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Re: RE Agent Commision - Negotiating
« Reply #12 on: January 04, 2019, 09:28:09 PM »
Wombat - your first post said you're not a good negotiator and want to bring in professional help. I'd encourage you to lean into your fear and try and negotiate. If face to face isn't your thing, try texting or email or whatever. Get a friend to help. Tell them you're saving realtor fees and want 6% off. They'll expect it.

ilsy

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Re: RE Agent Commision - Negotiating
« Reply #13 on: January 04, 2019, 09:55:40 PM »
Based on changes in the market Id like to try and negotiate a price reduction.
I have comps, income, expenses, etc.

Just be frank, and email, something along the lines "Hi, based on the comps, income, expenses (bring examples), at this point I can only offer _ . Don't be too apologetic, this is a business transaction, if it doesn't work for you, it doesn't work. Also tell them some positives, that you can close within whatever time, and need such and such documents from them (Schedule E or whatever). You don't need a consultant, if you know what you want.

Car Jack

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Re: RE Agent Commision - Negotiating
« Reply #14 on: January 05, 2019, 07:19:18 PM »
Maybe I missed something, but you've found a house you want to buy that's FSBO.  Have you contracted a buyer's agent?  If so, what's the contract say about anything you find yourself?  If not, why are you talking about getting an agent?

Now, it depends on the state who you need to have help with the transaction.  In my state, there's no such thing as a title company.  With no agent, a good, safe, inexpensive way to go is to hire the bank's lawyer who's handling the mortgage.  If no mortgage, then just hire a real estate lawyer.  They'll search the titles at the county courthouse, explain anything you need to know (like easements or covenants) and register the deed along with handling the paperwork and exchange of money.

Again....other states are different.  I've done this twice, buying from a FSBO.  I've sold using an agent twice and the lawyer along with the agent handled that.  The house I now live in, we bought for much less than what we'd have paid if an agent was involved.  It was a bit expensive for us and the seller knew it.  Not having an agent saved them a lot and we got a good savings from that.

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Re: RE Agent Commision - Negotiating
« Reply #15 on: January 05, 2019, 07:49:48 PM »
The seller pays the agent. As a buyer, it's not your concern what the commission is.


And you probably think the chinese pay the tariffs too.

Not Trump's..

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Re: RE Agent Commision - Negotiating
« Reply #16 on: January 05, 2019, 07:52:07 PM »
If it is FSBO, you just need a lawyer, not an agent.
If it's FSBO and the seller and the buyer agree on the price and other conditions, you only need a title company.

Maybe that's a jurisdiction thing. Here you need to use a lawyer. It's cheap.
For cash purchases you also need a lawyer?

My understanding is yes. Even when using a RE, you use a lawyer for the title.

The cost was negligible when we sold our house. Low enough I don't remember what it was.