real estate agent fees?

Question

I am considering buying home. we do not have a realtor, but the seller does. The realtor stated he would serve as realtor for both sides, dropping his fee to 4% of the selling price. Do we have to use a realtor? Can't we buy the home without one? I do not want to pay the commission, as I do not have the money for that/

Answer 1

The seller pays the Realtor, so you really don't have any reason to not purchase this house. If the seller signed a contract with the Realtor, and I'm sure he did, he is obligated to use his services.

Bear in mind that the Realtor has to put the interests of the seller first.

Answer 2

The seller pays the full commission, both his own realtor as well as the buyer's realtor. An agent can represent both parties. The standard is that the seller pays his realtor 3% to list the house and offers 3% to the buyer's realtor as an enticement to bring him buyers! So this realtor offring to "drop his fee" to 4% just does not make sense to me. If anything, they should give YOU a price break in the purchase price for agreeing to use the seller's realtor as both of those parties are the ones getting the good end of the deal. SELLER: assuming he was paying 3% to his realtor, he would normally have to pay an additional 3% to the buyer's realtor, so now instead of paying 6% he is paying only 4%! REALTOR: assuming he was charging the seller 3% of the total purchase price, now he is getting 4%. Does that make sense? Personally, I do not think a buyer's realtor is necessary. You can subtract a percentage from the asking price in your offer (that way you benefit), then just enlist the help of an attorney. Realtors are expensive!!

Answer 3

No you don't have to use a REALTOR, but the seller does in this case. They have signed an agreement to use them.

In more cases than not, even if you don't agree to have this agent represent you, the seller is still going to pay a minimum of 3-4% anyway to him/her.

If you did have agent representation, then the would probably pay 5-7% to this agent, and that agent would give 3-4% to your agent.

Very rarely through all of my experience as an investor or Realtor have I seen commissions affecting the overall price. If you are buying it for $100,000, then that's what you're buying it for regardless of 4 or 6% commission.

There are some instances where this is different, usually in a distressed sale situation, where commissions may actually cost the seller money because the accepted purchase price is too low.

Answer 4

You could certainly buy a home without one, however there is no one experienced in the complex issues that can be apart of a real estate transaction, who has YOUR best interests in mind. Someone who represents you the buyer.

The listing realtor dropping is fee doesn't mean much to you the buyer. It may to the seller. But he stands to gain the entire 4% commission. So who do you think he is thinking "best interests of "? .

Find a realtor who knows the area you want to live in, someone who has been in the business 5+ years. Maybe has a designation like GRI or CRS which shows their serious about their business and the experience level they can offer.

Always choose representation! You wouldn't do surgery without the surgeon would you?

Answer 5

Since the seller already has an agent there's no way that he or she will not be paid. You'd have to let the listing agreement expire and wait at least 6 months to avoid the seller's agent's commission.

Although you don't technically need an agent yourself, any agent represents the buyer unless you have an explicit buyer's agent agreement in place. As long as the agents' positions have been fully disclosed there is no real conflict of interest although a few states do require buyers and sellers to have different agents.

Since the listing agent as offered to lower his commission, this is going to be the lowest cost way for you to go. The seller always pays the agent's commission, but that is obviously figured into the price of the home.

For your own protection it's always a good idea to have your own attorney review the contracts that you'll be signing. This isn't all that expensive and is cheap peace of mind in the long run.

Answer 6

The owner has probably signed an agreement to pay this Realtor. The Realtor is offering to charge a lower amount on this transaction than the seller is normally obligated to do.

If you want this home, buy it. Ask someone, but I bet the seller is paying the Realtor fees at closing.

Answer 7

Well, it's a catch 22...do you use the same Realtor to save money on the commission, or do you risk overpaying and in the end, not save anything?

You don't have to use a Realtor, but this is what I tell people: Would you go and defend yourself against a $100,000 lawsuit without legal representation when the party suing you has one?

Everyone says no...but when it comes to Real Estate, people engage in this transaction without representation, and they sign paperwork obligating them for the next 30 years.

Not saying this to be mean...it's heartfelt advice: When it comes to Real Estate...this is not the time to be a penny wise and a dollar foolish, especially if you are an unseasoned buyer.

I wish you luck, but only you can make that decision.

Answer 8

As a buyer, it doesn't cost you anything to have a realtor. It is a good idea to have a realtor to make sure everything goes as it needs to. However, I would not use the sellers realtor. Get your own. The discounted commission does not affect you because the SELLER pays the commision - not the buyer.

Answer 9

In your case you really need one. He lied about you having to pay anything. 4% (2 and 2) is not uncommon with bank owned homes (banks are cheap).

You will pay a lower amount for the home with your own agent. It is actually against the law for him to try and bargain for you, he is contractually obligated to the sellers to get every dime out you of possible.

The only one saving money in the scenio desribed is the SELLER, they are the one that pays for commissions.

Answer 10

i dont see why you would need one..that is a conflict for him to represent both.so be cautious..i dont know what state your in but i would look into it...the commission of a sale as always been the on sellers in most states..