This is not common practice, it is a businees stratagy that some fee for service or cut rate agents do to buy business.
If you are going to negotiate a reduction in the commission do that but it should reflect in the price you pay for the property.
Look at the money. The buyer (and bank usualy) bring the money to the table. The seller agrees to pay the brokerages a percentage of the gross dollars. If your agent works cheap or needs to buy your business, that money just should not be brought to the table. Negotiate and recuce the offer price to reflect the difference otherwise you are lying about the price your paying and could be defrauding the lender because you are falsely reporting a jacked-up price and pocketing the difference.

Orie,

When I read this question my first thought was that this was posted in the wrong area because this practice is most certainly is NOT common here. I've NEVER heard of anyone doing this, so I find it a little hard to believe that you have spoken to three agents who said this. There are companies who rebate a portion of their commission, but that is not the same as what you are describing.

My next thought when I read the first answer was along the lines of what JR said, a setup question for a Redfin pitch.

Assuming that this is a legitimate question, I will ask you some questions?. Given that you are not in the business, are you really so sure that your strategy is right? When you researched comps did you look on the computer or did you visit supposed comparables in the field? Did you balance the offer strategy against what you've seen in the field as a professional, including unlisted solds that don't get put on the MLS?

Regardless of how much research you did, your offer strategy is unlikely to be as solid as an agent/broker who is active in the field (read: has seen more properties than you will in a lifetime and is much more aware of trends than you could possibly be), experienced, and is a solid negotiator. Using someone who is all of the foregoing is likely to save you a lot more than you would on your own.

Additionally, it seems that you are just looking for someone to submit the offer you have come up with on your own. Neither myself nor anyone who works with me would ever just submit an offer without checking everything out. My advice is to get someone who's really good make sure you are on target and let the seller pay the commission they agreed to. Most likely you'll be glad you did.

Best of Luck,

Lance R King/Managing Broker
415.722.5549
lance@fixedrateproperties.com

Here we go again. Amen Vicky. Why don't you ask the 3 agents you spoke with?


Tap

You're popular with me,Vicky! and thumbs up to you,too Grace for your usual great answer.

This question sounds like a setup for the first answer, which is a pitch for Redfin.

Anyway, you say "Talking to a few realtors to represent us and submit the offer on our behalf we learned that it's become common practice for realtors to offer the buyer credit towards non-recurring closing costs out of their commission." Really? Common practice. You spoke to a few realtors and based on what 3 Realtors said to you, it is "common practice"? I'm glad I don't "practice" in California! After having a few buyers and seller pick my pocket a couple of times, I now have a policy NEVER to contribute towards any buyer or seller monetarily. It would unfair to my clients that I DON'T contribute to. This is the same reason I charge the same fee to everyone.

Orie,

The answer may depend upon the amount agreed upon in the listing agreement for professional services. If this amount was discounted at the time of the listing, it would be unrealistic to expect a significant discount. On the other hand, if the fee for services is inflated you may expect a larger discount.

And, here I go being unpopular. I wouldn't offer you any of my pay, but I would prove my value. Hard for you to know what you need at this point, but I am an excellent agent and have never had a client say I wasn't worth the money I collected (which they always think is more than it is - please remember, the national average is that agents keep about 1/3 of what you see on the HUD). People who work for less aren't worth more.

Hello Orie and thanks for your post.

If you have located the home that you want to buy, and have determined how much you want to spend and need a licensed real estate professional to help with the offer, the documents, reports, inspections and close, then consider using a facilitator. As a facilitator, any credit for the commission (which can be as high as 1.5 to 2 percent of the purchase price) can be applied to the purchase price of the home if the seller is willing to reduce the price or will be paid directly to the buyer by the agent's broker under the terms of the Buyer's Representation Agreement. The commission payment to you will then lower your basis in the purchase price of the home and must be recognized as part of the gain when you sell.

I've already performed as a facilitator for several Trulia clients in many areas of the Bay Area. Since the buyer is in charge of many aspects of the purchase, rather than the agent, using the agent as facilitator can give the client a greater sense of satisfaction in the purchase process.

For more information about using a facilitator, see my blog here on Trulia or at my web address below.

Sincerely,
Grace Morioka, SRES, e-Pro
Agent/Facilitator
Area Pro Realty
Tel (408) 426-1616
Email: graceareaprorealty@att.net

Check out Redfin.com. They will rebate half their commission back to you. It's a great way to go and you'll save thousands of dollars. They will do a fine job for you.

Brad Davidson
Real Estate Commission Rebates @ http://www.wehelpubuy.com