Buyer's agent needed for foreclosure property?

Question

I've asked this question before and got both a yes and a no. It seems that realtors responded with a yes and individualls responded with a no. I found the property and this is not our first house. I am also a very good negotiator on price.

1. What would a realtor bring to the table for me that would earn them 3% - approx. $20,000?

2. Is it true that the seller has already signed a contract with their realtor agreeing to pay them 6% to be split with the buyer's realtor no matter what...meaning if the buyer doesn't use a realtor that the seller's realtor gets to keep the full 6% thereby not giving the buyer any additional leverage on price?

Answer 1

#1 - negotiating; verifying proper forms are completed; giving advice on what you should do.

#2 - yes, the listing contract specifies a % for commission - and that goes to the BROKER, not the realtor (unless the realtor is also a broker and an independent agent, not affiliated with any other brokerage company). It is up to the broker to determine what will be split with the realtor (usually the broker keeps 1/2 and gives 1/2 to the realtor, so they each get 3% if the % for commission is 6%). The listing agent won't kick back any money to the buyer (unethical).

As far as foreclosure properties, it is up to the bank or their designated realtor (commission is usually not the 6% that it would normally be for a non-foreclosure property). Remember, the bank is cheap too - they are already losing money on the house so they don't want to pay as much commission - usually, since the bank has volume, they pay a lower % for real estate commission (sometimes between 2-4%).

Answer 2

Realtor answer=true! If I have the listing and no other Realtor is involved I have to "do all the work"! to get it closed and I get to keep all the commission! So if you don't bring a Realtor-you could ask for a part of the commission but, they do have an agreement in place that states the listing agent will be paid so frankly that just takes more money out of the transaction for the seller and ticks them off to boot so either bring a REALTOR and have the good counsel or live with the other agent working for the seller!
I won't speak to what the REALTOR will bring besides the good counsel because it depends is a true statement if you hire an experienced person you may get good benefits from it, if you hire your cousin(no offense I don't know them!) they may or may not bring anything to the table-the benefit remains the same they get the 20K and either you get better advice if you hire wisely or not!

Answer 3

Question number 2 is the key issue here. The lender contracts with a real estate brokerage firm to dispose of the property involved. If you do NOT use buyer brokerage, the listing agent will get the ENTIRE amount of the commission involved. There is no reduction in the brokerage commission paid because you do the work yourself.

As a side note, lenders do not normally pay the area average rate of commission. It's normally at least one point below that.

However, to answer your question, the brokerage fee, in its entirety, will be paid to at least ONE agent. If you elect to allow the listing agent to collect the commission, the amount of the commission won't change. Therefore, it makes ZERO sense to not use a buyer agent. Each agent will get a smaller amount, but you WILL have legal representation for yourself.