Question Details

Raj, Home Buyer in Chesterbrook, PA

Hiring a broker

Asked by Raj, Chesterbrook, PA Mon Mar 10, 2008

I have selected a house to buy and will soon start negotiating the price. I was initially planning to hire a flat-fee or discount broker to take care of routine paperwork and processes but now I learn that the seller's agent gets his full commission (6%) irrespective of whether my agent (broker) is involved or not and that the seller's agent gets to keep the entire 6% if I am not represented by a broker. I was actually planning on using this (not having a 3% broker) to negotiate a better price but it doesn't look possible. Am I missing something?

If the above is true, could I hire a broker, explain him the situation, get him that 3% with an understanding that he will reduce his commission while selling my home?

Thanks,

Raj

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5
BEST ANSWER
Hi Raj. It looks like you have done your home work since your home work. While not being represented as a buyer does not entitle you to a discounted purchase price, you could negotiate a commission rebate with the agent who represents you in the purchase transaction. Some states do not allow rebates and I don't know what the rule is in the state in which you are located. If rebates are not allowed in your state, your proposal to discount the commission for selling your house seems to be a fair compromise as long as the discount is not excessive. I think as long as you negotiate all the terms with the broker before hand, your approach is not objectionable. I think repeat customers should be rewarded. Just remember, in the end it's more important to get competent representation than cheap representation.
1 vote Thank Flag Link Mon Mar 10, 2008
Ute Ferdig -…, Real Estate Pro in Newcastle, CA
MVP'08
Contact
Raj:

Did you manage to purchase a home in the end and how did you resolve your issues?

Colm
0 votes Thank Flag Link Sat Nov 22, 2008
Hello Raj,

Regardless of who the procuring cause is (the broker), the same amount of paper work, and time is involved. Your problem is that a broker has already shown you the property and they have become the procuring cause.

Any reputable agent will not touch a home that has been shown by another agent.

By the way, you don't get anyone the 3%. The seller is paying the commission.

You're plan has back fired. Sorry.
Web Reference: http://www.Philfowler.com
0 votes Thank Flag Link Mon Mar 10, 2008
Thanks Dawn. One clarification - I haven't hired or spoken to any broker yet. So, all options are still open to me.

Regarding the seller's agent being entitled to 6%, my question is - seller's agents painfully explain that they represent seller's interest etc and make you sign the relevant forms .. Still they are entitled to 6%? I am not arguing, just trying to understand the dynamics.
0 votes Thank Flag Link Mon Mar 10, 2008
If you have already selected a home and spoken to the broker then it is that brokers deal and can not have another broker state he is representing you after the fact. The 6 % commmission is typically split between the buyers broker and the sellers broker when their are two involved. If a buyer comes to a house that is listed and the buyer is not represented by a broker and wants to purchase that home, then yes that broker is entitled to the 6% because he/she will be performing all the necessary transaction details. As far as discounting for the sale of your own home that is a separate transaction and deal altogether. You could contact a broker to discuss in your own area.
0 votes Thank Flag Link Mon Mar 10, 2008
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