In that situation you may be negotiating without professional representation or you'll be in a dual agency agreement, whereby the listing agent represents both you and the seller and does not owe both of you full fiduciary responsibility (provided you both agree to enter into that type of agency, otherwise the listing agent will be working for the sellers best interests, not yours).
As an agent and ABR i believe you should have professional representation and it does not cost you anything, and without it could cost you more that the 2.5 you believe you may save.. .I recommend you speak with a local Realtor, ask your friends & family for recommendations or go to the ABR (Accredited Buyer Representative http://www.rebac.net ) website to find a local agent who specializes in buyers representation.
Best of luck to you,
Barabara L Smith
ABR, GRI, SFR
Licensed NJ & PA
Here are some ways to skirt their commission:
1) If you see a house you like, talk to the listing agent. Ask them if their commission is renegotiable. While they can't discuss their contract they have with their seller, you can ask them up front if it is a set 6% commission or if the commission will be reduced by unrepresented buyers. Since almost all are a set commission, you can then ask the agent if they are flexible.
2) Use the listing agent as your buyers agent, but sign an agreement with them that will pay a certain amount of cash back at close, or a percentage back. Basically, you can ask to have 2% back.
3) Hire a buyers agent who will give the 2% back or who will work for a flat fee.
If you're worried about suitable representation, hire a real estate lawyer for $500-$1000.
If you have a DUAL AGENT..... make sure they are a DUAL AGENT and NOT A TRANSACTION BROKER. Make you are being represented.
Your agent will protect you and make sure you understand all your options.
When you are able to negotiate terms and when you are officially locked in.
Good example of what to avoid is - friend tried to buy a house FSBO, with out a realtor, they signed Sellers contract and offer accepted.
Shortly after the buyer had a vacation planned, and by the time they came back they had 1 day to do the inspection "as per contract" they rushed to do it, and when the inspector saw the issues with the roof he said "RUN AS FAST AS YOU CAN" . The house was a 900,000 house with a very expensive clay roof. The roof had been repaired over repair over repair. Buyer tried to cancel and the seller said he was past his time. It took $25,000 in court fees to get back his $30,000 deposit.
Especially as a buyer..... AGENTS DONT COST ANYTHING!!
COURT COSTS are EXPENSIVE.
As realtors we see it all..... all situations!
We work off referrals and need your business in the future!
If we dont do right by you..... you wont do right by us!
In this type of business if your not working for your clients well being..... your not working much longer!
Show your agent how serious you are about buying, have a pre approval ready.
As agents we deal with many buyers who jump from agent to agent. Find 1 agent who best suits you and Trust them to guide you the right way.
Whether or not sellers agency gets to keep full commission depends on the contract they've signed. True, if seller signed a contract that specifically says: 5% commission, only split if there is buyer's agent - you are in tougher position. But even then you can get part of commission back if you agree with your agent.
You can look up Redfin's guide on the subject (just google buying without agent). Also I've wrote extensively about this in my blog post "Find real estate agent / realtor or purchase house without one" - http://howtoaddict.com/find-real-estate-agent-realtor-purcha
There are clauses in a contract by which a seller can save the buyer's agent commission, but they'd have to have that in their listing agreement. If they did, they would most likely "keep" that 2.5% themselves, as opposed to passing those savings on to you, the buyer. Just because they don't have to pay it out, doesn't mean they will lower the purchase price by 2.5% to give you a better deal on their property.
Instead of grasping at straws trying to find ways to save the buyer's agent commission, I would focus more time on ensuring your best interests are protected when making one of the biggest investments you'll ever make in your life. A good agent will most likely be able to save you that 2.5% (or more) with effective negotiation, as well as see the transaction through the closing.
Hope that helps!
Best of Luck,
Century 21 Tenace
The full commission is due unless the listing agent has an agrement that if he brings the buyer the commission will be reduced.
It is in your best interest to get your own agent. and from a different agency than the listing agent.
In my experience when buyers use the listing agent to purchase a home they typically pay more than they would have had they had their own buyers agent that can so them comparable sales.
Here are reasons why it pays to work with a real estate agent...
1.Youâ€™ll have an expert to guide you through the process. Buying or selling a home usually requires disclosure forms, inspection reports, mortgage documents, insurance policies, deeds, and multi-page settlement statements. A knowledgeable expert will help you prepare the best deal, and avoid delays or costly mistakes.
2.Get objective information and opinions. Real estate agents can provide local community information on utilities, zoning, schools, and more. Theyâ€™ll also be able to provide objective information about each property. A professional will be able to help you answer these two important questions: Will the property provide the environment I want for a home or investment? Second, will the property have resale value when I am ready to sell?
3.Find the best property out there. Sometimes the property you are seeking is available but not actively advertised in the market, and it will take some investigation by your agent to find all available properties.
4.Benefit from their negotiating experience. There are many negotiating factors, including but not limited to price, financing, terms, date of possession, and inclusion or exclusion of repairs, furnishings, or equipment. In addition, the purchase agreement should provide a period of time for you to complete appropriate inspections and investigations of the property before you are bound to complete the purchase. Your agent can advise you as to which investigations and inspections are recommended or required.
5.Property marketing power. Real estate doesnâ€™t sell due to advertising alone. In fact, a large share of real estate sales comes as the result of a practitionerâ€™s contacts through previous clients, referrals, friends, and family. When a property is marketed with the help of a real estate agent, you do not have to allow strangers into your home. Your agent will generally prescreen and accompany qualified prospects through your property.
6.Real estate has its own language. If you donâ€™t know a CMA from a PUD, you can understand why itâ€™s important to work with a professional who is immersed in the industry and knows the real estate language.
7.Real estate agents have done it before. Most people buy and sell only a few homes in a lifetime, usually with quite a few years in between each purchase. And even if youâ€™ve done it before, laws and regulations change. Real estate agents, on the other hand, handle hundreds of real estate transactions over the course of their career. Having an expert on your side is critical.
8.Buying and selling is emotional. A home often symbolizes family, rest, and security â€” itâ€™s not just four walls and a roof. Because of this, home buying and selling can be an emotional undertaking. And for most people, a home is the biggest purchase theyâ€™ll ever make. Having a concerned, but objective, third party helps you stay focused on both the emotional and financial issues most important to you.
Fred Yancy, Broker
Exit Platinum Realty
What a great way to wrap up 2012! Double siding a listing.
Xilu, what you should be reading in my words is there is NO advantage to you, but significant benefit to the agent who has the listing.
Every night before I go to bed an ask the universe to delver to my listing a buyer thinking they are going to 'save' on the professional fees THEY DO NOT PAY! That's when I do the 'Happy Dance.'
Invariably, buyers will barge through all the warnings, red flags and candid advise, only to return later to forums such as this to find someone to blame for a mistake they have made. The process, as it exists, is in place to PROTECT YOU. When you choose to circumvent these safe guards, you will only have yourself to blame.
You are a very smart and clever person, and you may truly believe you have found a benefit.
I wish for you the very best outcome possible.
I agree with all of the other responses posted so far.
Who is negotiating your best deal and explaining all the
procedures and making sure your interests are represented?
I am an Accredited Buyer's Representative, Certified Residential
Specialist, and a Broker-Associate. I have been listing and selling
in Union for over 21 years and I have lived in town for 24 years.
I am a Full Time Realtor Professional.
Sell-abrating 21 Years with Century21 Real Estate!
Barry Goldman, CRS, ABR, GRI
Certified Residential Specialist
Century21 Picciuto Realty
1915 Morris Ave
Union, NJ 07083
Regardless of whatever you do, the sellers agent is going to get paid the entire commission (whatever it may be), if he lists and sells the house. If you need help, look for a person with experience in Union and the surrounding area. Look for an agent that does this FULL TIME. Look for an agent that understands the current market.
Call me if you are looking for all of the above.
REMAX In Action
I am a licensed agent and still list my own homes to sell (paying my company) If I were buying I would also still use the best agent, inspector and attorney I could find.
Hello! That is a very good question. If a Seller has hired a real estate brokerage to list and sell their home then, most likely, the Seller will not be saving anything if the Buyer does not use an agent. In fact, there could be a conflict or an inferred agency between the listing agent and the Buyer.
Additionally, as a Buyer, you want someone who is there to look out for your best interests. The listing agent will be working for the Seller, not for you. The home buying process can be confusing, especially if you are a first time homebuyer. An experience agent, especially one who has obtained their Accredited Buyer Representative designation (such as myself), can help guide you through the process and help you get the best terms possible.
By not using an agent, you will not be able to negotiate any better price (and could end up negotiating a worse price!), and you are doing yourself a disservice by not having an advocate for your needs, wants, and desires.
If you have any further questions, please don't hesitate to contact me.
Coldwell Banker Residential Brokerage
A big trap is the statement that buyer's agent costs nothing to a buyer. Everything is priced in the sale price. If you know just a little bit ABC of negotiating you deserve to have some if not all of the whopping 3% of sale price that your buyer's agent will get. I am not a realtor or broker. In the time when there were no Zillows Trulia Redfin, i could see value of an agent but now a days???? you search for the home on these sites you decide what to offer and you apply for mortgage by comparing lenders online. Think what job your buyer's agent will do ?????
Look at the listing price and sale price of recent sale in the area you want to buy your home and make an offer with help of attorney (couple of hundred dollars) and there you go....
Now all that said, for some people it makes sense to have a buyers agent. But if you don't, make sure the Seller understands that at a minimum, the two of you should be splitting that extra 3%, not the Seller's Agent.
If the home is for sale by owner then this may change the pricing, specially if the home was on the market before.