Home Buying in Phoenix>Question Details

No Buyer's A…, Home Buyer in Phoenix, AZ

Real estate fees to listing agent if there's no buyer's agent

Asked by No Buyer's Agent, Phoenix, AZ Tue Sep 1, 2009

We are considering buying a house in Phoenix. If we don't have a real estate agent, does the listing agent get the standard 6% commission or do they get 3% (since there is no buyer's agent)? We want to know if it's leverage to negotiate.
Thanks.

Help the community by answering this question:

Answers

17
Like the others have stated below in the overwhelming majority of the cases this will not represent any savings to you. And by the time you find that out, by working directly with the seller's agent, it will be too late to get your own representation (at no cost to you) during the transaction for that property.

And even if you believe you can get some discounts you might still end up loosing by doing that. One of the many things your agent will do for you is to advice you on how to structure your offer for success, including the purchase price. This will include running an in-depth CMA analysis and making the proper adjustments based on his experience with the current market - that is something that you can not get from the very quickly and automated CMAs you can get for free.

Without that you will never know if you got a good price - regardless of what the seller's agent tells you. You might think you got away with a good price, but you might not.

Also remember that the listing agent will still be representing the seller. Meaning that his duty is still towards the best interest of the seller. So he will not do anything to protect you. In the case of a dispute you will find yourself going against an experience person who knows the contract, the law, the rules and know how to work his way to the benefit of his client, the seller.

Unless you are an expert on the contract, are aware of all the deadlines, all the necessary due diligences the buyer needs to make, know the law and the local rules, have access to all the comparables and know how to make the proper adjustments I will advice agains going solo in the purchase of your property.

Carlos J. Ramirez, PC, ABR, CNE
Associate Broker, HomeSmart -
http://www.SmartAZRealty.com
2 votes Thank Flag Link Wed Sep 2, 2009
The Listing Agent will take the full 6% unless they have agreed with the Seller to take a lesser commission if they have the Buyer. In this case, that agent will be a "dual agent" and must be fair to both parties - there is also a lot more liability to this type of agency, and some agents don't like to be exposed to dual agency. If they do not create a dual agency, then you are an unrepresented Buyer and they only represent the Seller. It truly is best to get an agent for the side of the transaction that you are on.
Good Luck, and let me know if you would like my assistance.

-- Lisa Miller
623-326-9261
2 votes Thank Flag Link Tue Sep 1, 2009
Peter, your response demonstrates your below average intelligence, not that of Realtors.

With very little research anyone can determine the actual value of a car, and even for how much they are selling in the area. The same cannot be said for houses, as every one is unique. To determine a proper market value of a house you will need access to all the true comparables and most importantly you will need to make all the proper adjustments for improvements, location, condition, etc…, something that only a Realtor or appraiser can do properly.

Additionally a Realtor knows all the rights and duties of each side, those in the contract and those provided by law outside the contract. Going to a transaction not knowing all your rights and duties is a dumb thing to do. Trusting the other side to tell you your rights and duties is even dumber.

Although I do agree that Realtors who provide that information for free on this site are not being too smart either.

As a buyer not using a buyer’s agent is not going to save you a penny. Not even on FSBOs as most of them want to keep the savings for themselves, and not give it to the buyer. FSBOS are only a very small percentage of the market anyway.

As a seller you can try to sell it by yourself and save some money, although you will only be reaching less than 15% of the market, since more than 85% of the market use buyer’s agent. That may also cause you to ask too much and never sell the property, or ask too little and lose money.

On either case, buying or selling, not using a professional to help you is a dumb thing to do.

The only thing where I may partially agree with you is that there are many Realtors out there who are not the best professionals. There is a huge difference between Realtors out there. You should always get one who is full time, and one who also has at least a bachelor’s degree (or even better a master’s degree), not one with only a high school degree.

I am a former agent (licensed in a different state) and know the value of someone who knows the local market (trends, rules, regulations, etc…). That is why in all of my transactions (buying and selling) I always use an agent, and pay him his full commission, even with the volume I generate. My agent knows the local market and is a true professional with a master’s degree in finance.

But I think that, since you are so smart, you should always go by yourself during all of your transactions.

Good luck Peter!
1 vote Thank Flag Link Sun Sep 1, 2013
This is a good and a very commonly asked question. As you have cited there are two parts to a normal transaction, the listing side and the selling side. This would imply there are two sets of relative responsibilities that are associated with each. In the event the listing agent finds a buyer, leaving only one agent left to make things work, who would you suggest would assume the responsibilities associated with the selling side of the transaction?

Is it reasonable to expect the listing agent to do at least twice the amount of work for no compensation? Put yourself in this position.....your boss says, I'd like you to do a double shift from now on....and by the way, there will be no pay for this service because I know you are truly dedicated and love this work!

I would think that bad words and unkind gestures might come to mind.....

Keeping it real...

Bill
1 vote Thank Flag Link Sun Sep 1, 2013
I offer free full service buyer's representation and if you'll take one minute to visit my website you'll see how you can save thousands on your home purchase.

Scott
AZ's REBATE Realtor
Web Reference: http://www.cr-az.com
1 vote Thank Flag Link Tue Sep 8, 2009
I really hate the, oft repeated by real estate agents, analogy that not using a buyer's agent is like not having professional legal representation in court. There is NO comparison between what a real estate agent has to go through in order to execute sales in a given state and what a lawyer has to go through in order to practice law in the same state; none.

On top of this I would venture to say that within a given sample of the population that have worked with both lawyers and realtors in the past, they would likely say that they found the lawyers they had worked with to be reasonable with above average intelligence and common sense, and that the same could not be said for the realtors.

In the end, a real estate agent is, above all else, simply a salesperson. So of course all of the salespeople that are responding to this thread are going to try to add value to what they do that justifies the 2-3% that they collect by doing a relatively small task as a buyer's agent. I think a much better analogy would be, "would you purchase a car from a dealership without a buyer's agent representing you?" and the answer is probably yes.
0 votes Thank Flag Link Sun Sep 1, 2013
Relatively small task? Try showiing someone 30-40 homes, writiing multiple contracts before getting one accepted and driving hundreds of miles for weeks. Then you will spend a month walking this first time buyer step by step through everything, protecting them , negotiating for them, and making sure they are treated right...to you...that's not worth money...it's probably minimum wage some of the time...I have twenty years in this industry and bring a lot to the table that you apparently have no understandiing of.
Flag Thu Mar 31, 2016
Peter, your response demonstrates your below average intelligence, not that of Realtors.

With very little research anyone can determine the actual value of a car, and even for how much they are selling in the area. The same cannot be said for houses, as every one is unique. To determine a proper market value of a house you will need access to all the true comparables and most importantly you will need to make all the proper adjustments for improvements, location, condition, etc…, something that only a Realtor or appraiser can do properly.

Additionally a Realtor knows all the rights and duties of each side, those in the contract and those provided by law outside the contract. Going to a transaction not knowing all your rights and duties is a dumb thing to do. Trusting the other side to tell you your rights and duties is even dumber.

Although I do agree that Realtors who provide that information for free on this site are not being too smart either.
As a buyer not using a buyer’s
Flag Sun Sep 1, 2013
I once heard the following analogy to the points made in this discussion. Would you go to court where you have the chance to loose thousands of dollars without your own attorney? Would you agree to let the others party's attorney represent you as well as them?

If you answer yes to both of those questions then move forward with self representation or a dual agency position with the listing agent.

Regarding commission... that is a contract between the listing agent's broker (not the listing agent) and the home seller. In most cases, the broker's policy determines how commissions are split, not the listing agent.
Web Reference: http://www.urbanteamaz.com
0 votes Thank Flag Link Sat May 1, 2010
Add up the total you want to pay and offer that
Seller should accept that he pays the cost of agents
otherwise he should sell it himself, for sale by owner
You give the $ and they split is as they wish/agreed

Agents do lots of work but seller should pay them, as mainly for his benefit
0 votes Thank Flag Link Fri Apr 30, 2010
Whether the listing agent gets to keep the "buyer's side commission" or not, has been predetermined by the contract that they've signed with the listing agency.

I think it's fair to "presume" that they will receive the buyer's side, or a portion thereof, but I wouldn't "bring it up" as part of your negotiation tactics. Just keep it in the back of your mind, and negotiate the best deal that you can.
0 votes Thank Flag Link Wed Sep 2, 2009
Alan May, Real Estate Pro in Evanston, IL
MVP'08
Contact
Negotiating a purchase price involves far more than just the listing agent's commission. Some listing agents will agree to a lesser commission if the property is sold to an unrepresented buyer. Some will not and will receive the full listing fee.

Factors involved in negotiating a purchase/offfer price are condition, location, features, age, time on market, equity position of the seller, market conditions for area and many other factors.

Focusing simply on the listing agent's commission shows inexperience and will not help the position of an unrepresented buyer.

Lenn Harley
Broker, Homefinders.com
Web Reference: http://www.homefinders.com
0 votes Thank Flag Link Wed Sep 2, 2009
What the seller negotiated with his/her listing agent to market their home is not a discussion a buyer would normally have when making an offer on the property. It really has no relevance to what is really important, you obtaining your own representation when purchasing a property. As the other agents stated, it is always better to have a Realtor representing you as a buyer. The buyers agent works for YOU and can provide you the comparibles for the properties you are interested, as well as demographics, possible continuation of property depreciation and location information. This is the information you will use as leverage when negotiating your purchase price, not the realtors commission. Good Luck
0 votes Thank Flag Link Wed Sep 2, 2009
I believe an important fact has been missed. When an agent accepts a listing, they do so on behalf of the firm where their license is held unless they are the actual designated broker of that firm. Therefore, when an agent negotiates a commission with a home seller, the commission is paid to the brokerage, not the agent and the brokerage pays the agent based on their contract.

You mention a standard commission rate of 6%. Commissions rates are negotiable and not set at 6%. This is quite evident in today's market where banks often negotiate commissions to the listing brokerage in the 4-5% range. The listing brokerage, through it's agents, chooses the rates offered to the buyer's agent. In today's market it is not uncommon to see the rate offered to the buyer's agent well under the 3% rate you mentioned.

If you (the home buyer) self-represents, the listing brokerage has the option of reducing the commission rate to the home seller, thus creating some negotiation room. This option is generally negotiated with the home seller at the time the listing is taken, rather than when an offer from an unrepresented buyer is presented.

The listing agreement, where the commission amount is identified, is not a part of the purchase contract. The two are fully separate documents. One is an employment agreement and the other is a sales agreement.

If the listing agent is representing both the buyer and seller, full commissions, per the listing agreement, are common. The agent does more work and is put in a position of much greater risk in this type of transaction as are both the buyer and seller.

I hope this answers the actual question you asked.
Web Reference: http://www.urbanteamaz.com
0 votes Thank Flag Link Tue Sep 1, 2009
A buyer needs to ask themselves who's best interest the agent is going to have in mind. Is it going to be the seller they are representing that is paying their commission or is it going to be the buyer. When looking at a comparable value on the home, you never know what comps that agent will show you to put a true value on a home. A buyer's agent will be your advocate and get you the best price and only have your best interests in mind and not the seller's. The purpose is not to try to save on the commission, but to get the best price for the home. Even when you do your inspection and want to ask for certain repairs, will the seller's agent fight for you and get their seller to make the repairs. I have received my ABR (Accredited buyers Representative) designation specifically to work with buyers in order to protect them in all ways. a buyer's representative will also keep you abreast of the best deals out there and ways to finance.

Did you know about the program called Your Way Home Arizona? You can get $15,000 from the county if you buy a bank owned home and stay in it for a minimum 5 years.

I would be happy to represent you in buying a home. You can go to my website and learn about me and my partner. See Web Reference below for my website.

Best regards,
Lorrie
480-570-1074
0 votes Thank Flag Link Tue Sep 1, 2009
BY any chance, do you work for the Justice Department?
0 votes Thank Flag Link Tue Sep 1, 2009
Saving money on commission is usually the thought behind not using a buyers agent. Who is going to write the offer? If it's the listing agnet, then you now have used a buyers agent. This is Dual Agency. The listing agent is entitled to both sides of the commission. They may cut the commission a little, but they are still going to get something.

Keep this in mind. This is a buyers market. You really should have a buyers agent working in your best interest. When an agent performs Dual Agency, they are not allowed to advise either side what to do. (Can't show you comparable properties and suggest a starting price, can't advise you how to respond to a counter offer by the seller, things like this. Same goes for the selling end). A buyers agent can and should advise you throughout the entire process from showings to closing. Unless you know what you are doing, and are going to do this yourself, you probably won't save much.
0 votes Thank Flag Link Tue Sep 1, 2009
Hello NBA,

It is not a "standard practice" to reduce the commission if the buyer does not have a buyer's agent. The listing agent MAY take a reduced commission, but it is not a guarantee. There is a great deal of liability to represent both the buyer and seller, and the work of a buyer's agent doesn't end when the house is found.

If you do choose to go this way be sure and get any commission reduction in writing and keep in mind that the agent has (had) the duty to the seller first, not to you.

Also...have you talked with a buyer's agent to see if they might be able to negotiate the price you want to pay? You might be able to get what you want AND have proper representation.

Good luck!
Feel free to contact me with any additional questions at susan@PhxDreamHomes.com

Susan Ellis
Realtor, CNE
Web Reference: http://phxdreamhomes.com
0 votes Thank Flag Link Tue Sep 1, 2009
They usually get the full 6%. I have used this in the past when I represented myself, I offered 3% off the sales price that I would have normally asked for basically. To be honest a lot of times the agent just presents it to the seller as is, with A 6% commission to themselves anyway, so sometimes it works just to get the agent to "really like" your offer.....

If you need help with this you can call me as a lender in PHX.
0 votes Thank Flag Link Tue Sep 1, 2009
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2016 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer