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Realtor Negotiations
Posted on 7/23/18 at 9:05 am
Posted on 7/23/18 at 9:05 am
I am in the process of looking at houses, have a question on negotiating realtor fees. The lady we spoke with on a house we are looking at is the listing agent, so we would go through her as well so I assume she would get 100% of the commission. We would also possibly use her to list our house as well, since we do not have a realtor. In this scenario would realtor fees be negotiable, and what % would be fair to both parties?
8
Posted on 7/23/18 at 9:14 am to TigerSaint1
Realtor fees are always negotiable, however, I would it on the back end (once you have an offer, etc) to make the deal work rather than the front end.
They may tell you that commission cannot be changed, but it always can be.
They may tell you that commission cannot be changed, but it always can be.
Posted on 7/23/18 at 9:16 am to TigerSaint1
You're right she'd get 100%/2 or 50%.
It has been my experience that they can be flexible in such circumstances. Wave your listing under her nose and see how well you can negotiate.
I would maybe ask her and see what she says. She may give you better numbers than you might suggest.
It has been my experience that they can be flexible in such circumstances. Wave your listing under her nose and see how well you can negotiate.
I would maybe ask her and see what she says. She may give you better numbers than you might suggest.
Posted on 7/23/18 at 9:19 am to TigerSaint1
quote:
I am in the process of looking at houses, have a question on negotiating realtor fees. The lady we spoke with on a house we are looking at is the listing agent, so we would go through her as well so I assume she would get 100% of the commission. We would also possibly use her to list our house as well, since we do not have a realtor. In this scenario would realtor fees be negotiable, and what % would be fair to both parties?
I've done it. I typically have tried to use the listing agent, when possible, for this very reason. If you bring a buyer's agent into the mix, what starts as a 6% commission for the listing agent automatically turns into a 3% commission (this is the norm, but it works the same no matter their fee is). From there, it's unlikely you're going to get them to negotiate and if someone else comes to the table with the same offer (and possibly even relatively close), you can bet the listing agent will highlight that offer with the seller over yours.
My guess is you could negotiate the price down to what would amount to 4-4.5% commission for the agent. And of course, letting them list yours as well also helps your case.
Everything is negotiable.
This post was edited on 7/23/18 at 9:21 am
Posted on 7/23/18 at 9:37 am to TigerSaint1
quote:
The lady we spoke with on a house we are looking at is the listing agent, so we would go through her as well so I assume she would get 100% of the commission.
Don't do this. Don't use a dual agent.
Posted on 7/23/18 at 9:40 am to lnomm34
quote:
Don't do this. Don't use a dual agent.
I'm curious as to why or if you have experience with it. I can understand some of the potential reasons.
Posted on 7/23/18 at 9:56 am to S1C EM
I apologize but I remain confused. I expect to enter into a listing agreement with a realtor for some rural acerage in a few months. Her contract indicates a 6% commission. As I appreciate it, that is the norm for commercial property. Is this fee shared with a purchaser's agent? What is ther roll of the purchaser's agent? What is the breakdown if another broker that uses a multiple listings directory delivers the buyer?
Posted on 7/23/18 at 10:09 am to lnomm34
Can you elaborate further on this?
Posted on 7/23/18 at 10:20 am to CharleyLake
quote:
Is this fee shared with a purchaser's agent? What is ther roll of the purchaser's agent? What is the breakdown if another broker that uses a multiple listings directory delivers the buyer?
In short, yes. The commission will be 6% (all to her if no buyer's agent is involved). If a buyer's agent comes into the mix, it's generally a 50/50 split between those two agents at that point, or 3%/3%. They may negotiate that with each other to where it isn't 50/50, but I haven't seen that be a common thing.
The role of the buyer's agent is simply to "represent the buyer and their best interests" in the deal. Depending on if they're worth a shite or not, that might actually mean something. Some will go to bat for you with the seller/listing agent in negotiations and ensuring that you get a good deal, researching property history, alerting you to possible issues, etc. Some literally don't do anything at all besides completing the standard paperwork and playing middle-man between you and the listing agent.
Not sure what you're asking in the third part of the question. Essentially, if someone delivers the buyer who is NOT the listing agent, they're getting some fee, usually a cut of the listing agent's predetermined commission.
Posted on 7/23/18 at 10:38 am to S1C EM
quote:
Some literally don't do anything at all besides completing the standard paperwork and playing middle-man between you and the listing agent.
Seems to be the case more often than not.
Posted on 7/23/18 at 10:45 am to TheBoo
quote:
Seems to be the case more often than not.
Has been my experience in every case, honestly. And I personally liked the agents; they just didn't do anything I couldn't do and I wouldn't say they went out of their way to make the experience better.
Posted on 7/23/18 at 11:28 am to TigerSaint1
To elaborate a bit on dual agents, it just doesn't make sense unless you thoroughly and completely understand the property and the market.
The selling/listing agent's goal is to get the best price for the home for the seller.
The buying agent's goal (ideally) is to ensure the buyer is fully and completely knowledgeable about the property, its shortcomings, the neighborhood, etc., and to help the buyer negotiate a fair deal.
In my mind, those two goals are in conflict. Sure, there are some buyer's agents who don't do anything to really educate or help the buyer--and they're still fulfilling their legal obligations, but a good agent will really help ensure you don't end up in a house that doesn't fit your needs.
My first house, we bought using a dual agent. We were new to the area and no one clued us in on areas that would have been more appropriate for our family. We found a nice house, contacted the listing agent, she showed us the house, and we bought it. Three years later, I needed to sell it so I contacted the same agent. She basically laughed at me when I asked her to list it for the same price we bought it and told me I'd never get that price. She was right. After six months of listing with her, I moved the listing to another agent, dropping the price about 15% along the way . . and another 15 months later, the house FINALLY sold. I'm not blaming the original agent for my mistake, but I think if I'd have contacted a good buyer's agent, they would have steered me away from the area I bought (in a legal and ethical way, of course).
The selling/listing agent's goal is to get the best price for the home for the seller.
The buying agent's goal (ideally) is to ensure the buyer is fully and completely knowledgeable about the property, its shortcomings, the neighborhood, etc., and to help the buyer negotiate a fair deal.
In my mind, those two goals are in conflict. Sure, there are some buyer's agents who don't do anything to really educate or help the buyer--and they're still fulfilling their legal obligations, but a good agent will really help ensure you don't end up in a house that doesn't fit your needs.
My first house, we bought using a dual agent. We were new to the area and no one clued us in on areas that would have been more appropriate for our family. We found a nice house, contacted the listing agent, she showed us the house, and we bought it. Three years later, I needed to sell it so I contacted the same agent. She basically laughed at me when I asked her to list it for the same price we bought it and told me I'd never get that price. She was right. After six months of listing with her, I moved the listing to another agent, dropping the price about 15% along the way . . and another 15 months later, the house FINALLY sold. I'm not blaming the original agent for my mistake, but I think if I'd have contacted a good buyer's agent, they would have steered me away from the area I bought (in a legal and ethical way, of course).
This post was edited on 7/23/18 at 12:22 pm
Posted on 7/23/18 at 11:32 am to TigerSaint1
(no message)
This post was edited on 7/23/18 at 11:37 am
Posted on 7/23/18 at 11:53 am to CharleyLake
quote:
I apologize but I remain confused. I expect to enter into a listing agreement with a realtor for some rural acerage in a few months. Her contract indicates a 6% commission. As I appreciate it, that is the norm for commercial property. Is this fee shared with a purchaser's agent? What is ther roll of the purchaser's agent? What is the breakdown if another broker that uses a multiple listings directory delivers the buyer?
They want you to believe it is standard and etched in stone, but it is always negotiable, don't throw away money offer a lower commission.
Posted on 7/23/18 at 12:31 pm to lnomm34
I can understand your reasoning, but we are very familiar with the area and looking at comps in the same neighborhood right now. We know what the price per S/F should be around and offering at that price. But like you said, there will still be some sort of conflict of interest there.
Posted on 7/23/18 at 12:39 pm to S1C EM
You answered my question. Appreciate you.
Posted on 7/23/18 at 12:47 pm to lnomm34
This is very helpful to me. I would think that the most likely buyer would be a 500 S & P Company and would have attorneys etc. and would not be in need of a buyer's agent.
I will inquire with the prospective listing agent just to be clear of their effort to be incentivised if need be.
I will inquire with the prospective listing agent just to be clear of their effort to be incentivised if need be.
Posted on 7/23/18 at 1:05 pm to lnomm34
quote:
The buying agent's goal (ideally) is to ensure the buyer is fully and completely knowledgeable about the property, its shortcomings, the neighborhood, etc., and to help the buyer negotiate a fair deal.
This is almost never actually put into practice. If it were, I would probably agree with you.
Posted on 7/23/18 at 1:07 pm to CharleyLake
quote:
You answered my question. Appreciate you.
You are most welcome.
Posted on 7/23/18 at 1:16 pm to CharleyLake
quote:
I apologize but I remain confused. I expect to enter into a listing agreement with a realtor for some rural acerage in a few months. Her contract indicates a 6% commission. As I appreciate it, that is the norm for commercial property. Is this fee shared with a purchaser's agent? What is ther roll of the purchaser's agent? What is the breakdown if another broker that uses a multiple listings directory delivers the buyer?
Without turning this reply into a book, the short answer is you probably only know what the listing agency is going to get and what the selling agency is going to get - not the individual agents. Most states distinguish between brokers and agents (who must work under a broker). So unless the listing/selling agent is also the broker/owner of the agency (and will likely get 100% of the commission), you won't know what percentage the agent is getting. Individual agents might be on different deals depending on their positions within their respective agencies. Some may be on 100% commission deals (and pay for a desk), while others may be on 50/50, 60/40, 40/60 or whatever splits with their brokers.
As far as what's shared with the selling agency (assuming it's not an agent within the listing agency), you'll likely see a section in your listing agreement that refers to Sub Agent's Fee and it'll typically show up in the MLS as SAF: X% - and yes, it's usually half of whatever the overall commission is.
One of the most confusing things about real estate and agents/brokers is that in most states that I'm aware of, the subagent (selling agent who delivers the buyer) has a fiduciary duty to the seller, not the buyer. A LOT of buyers think that the agent who is riding them around represents them. Unless the buyer has signed an exclusive buyer's agent agreement with that agent/broker, he does not represent them and he owes no (legal) fiduciary duty to the purchaser. Being a subagent, his fiduciary duty is still to the seller. Unfortunately, a lot of agents (esp. newer ones who are not actually Realtors) seem confused about their legal responsibilities to sellers and/or buyers.
Hmm... not really a short answer, but I wanted to try to address the subagency quandary that tends to confuse a lot of people. Hope that helped.
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