Home Buying in 07083>Question Details

Xilu, Home Buyer in Watchung, NJ

Will buying home without buyer agent save the seller 2.5% commission in nj?

Asked by Xilu, Watchung, NJ Tue Dec 11, 2012

I am planing to purchase a house without buyer agent in union, nj. I thought it would give us a little bit more room to negotiate since the seller does not have to pay the 2.5% commission. But the seller agent told us then the seller agency will take 5% if we do not use any buyer agent or dual agent, is that right?

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Maria Cipollone’s answer
The same way that the seller choose to be represent by a listing agent you have the right to get your own real estate agent that can work for you and advocate in your behalf. The seller's agent does not want the best deal for you, he is trying to get the best price, terms and conditions for the owner of the property.

Best of Luck,

Maria Cipollone

Century 21 Tenace

2 votes Thank Flag Link Tue Dec 11, 2012
Most listing agreements are written as Exclusive Right to Sell which simply means that regardless of where the buyer comes from, the listing agent is due a fee at the closing.

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
Weichert Realtors
Licensed NJ & PA
Direct: 609-980-7593
email: BarbSmith321@gmail.com
Web Reference: http://BarbSellsSJ.com
2 votes Thank Flag Link Tue Dec 11, 2012
You'll never get the full answer from agents in this arena. They are looking to protect their job market and ensure high commissions in an arena where buyers and owners have more power then they ever had had. If you are trying to sell a home that is vacant or if you are moving long distance, I recommend an agent. However, if you are moving local, say 'trading up' to a larger home, you can sell the home yourself and you can buy a home yourself without an agent.

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.
5 votes Thank Flag Link Fri May 3, 2013
Spot on TomCox. This is the age of Uber, Airbnb and Netflix. Consumers today can hire a good property inspector, a good lawyer...and then do their own research online, apply for mortgage online and soon they will buy property online. On a property worth $300k, even if you spend $2k extra to do all these, you will save money...more importantly you would have done more thorough research than most buyers agents do.
Flag Thu Jun 16, 2016
horrible advice. really bad. Its a property that matters to you, let the professionals do their job to help you. Skirting them could and usually does cost you big.
Flag Sun Mar 8, 2015
Flag Fri Sep 5, 2014
Oh yeah, that'll work.
Nearly as good as the 'investor' seminars that encourage offering 40% of Just Market Value. One success way back in 2009 and all of a sudden it becomes a buying strategy. If you like the house, your kick back strategy will result in 'keep on looking.'
Flag Mon Nov 4, 2013
1. The listing agent is representing the seller so he is looking out for the best interest of the seller not your unless you sign a disclosed dual agency agreement with them.
2 It is against NJ banking laws for an agent to give back commissions to the buyer or seller.
3. Same as above against the law to give commission to anyone not holding a license.
Attorneys will charge more in no real estate agent involved..
Flag Sun May 12, 2013
I just wanted to notice how much smoke and mirrors agents bring up whenever this topic is mentioned. I understood it's your job and earnings at stake... but aren't you obliged by law to give correct information? Yes, right? Well why are you focusing only on negatives?

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…
3 votes Thank Flag Link Thu Nov 20, 2014
You should always try to have an agent represent you. Having your own agent separate from the listing agent is the ideal situation.
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!!

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.
3 votes Thank Flag Link Sat May 11, 2013
"Especially as a buyer..... AGENTS DONT COST ANYTHING!!
COURT COSTS are EXPENSIVE." this is so untrue - if no one else is bringing money to the table then who else is paying everyones fees?? Are agents really working for free - regardless of buyer or seller, if they aren't then they are costing the buyer!
Flag Wed Dec 10, 2014
Perfect example why you need to be represented!
Flag Mon Nov 4, 2013
You will not "save" 2.5%, nor will the seller "knock the amount" off your purchase price if you decide to not use an agent when purchasing. Generally, the listing contract is for a "total" commission, which the listing agent either out a portion, or keeps it all if there is no representation.

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!
3 votes Thank Flag Link Wed Dec 12, 2012
You should always be represented. You need someone looking out for your best interest. The sellers pay it not you. When you sell you will also pay it out. So protect yourself and get a BUYERS AGENT. Pick 1 agent that will guide you from beginning to end. Find 1 you like and work with them from beginning to end. you will get the same loyalty in return.
2 votes Thank Flag Link Mon Nov 4, 2013
This is one of those urban legends that just won't die! Your are MORE likely to get a discount because the seller is just happy about the Mayans being wrong about the world ending today (although the day is still young!). As a buyer, you do not save money by NOT using an agent UNLESS you're looking at an FSBO, where there is no seller's agent. As pointed out below, it usually ends up costing you MORE because you are under-represented. Best of luck with your purchase...Jim
2 votes Thank Flag Link Wed Dec 12, 2012
How many of the answers provided here are from agents who want to protect their jobs???? With all the detailed information about listing online these days, you can buy a home on your own. Remember: only you have your true interest in heart. What advice do you think a buyer's agent will give you when he or she is paid by a percentage of the transaction price? The higher the price you pay the better for him/her.

Besides, we were just fed up with the time wasted by communicating through another layer (who may even filter the real information) and by people who wants to steer you to certain places and flood you with places you are not really interested in and are slow in scheduling showings....
1 vote Thank Flag Link Sat May 14, 2016
All of the agents/brokers on here are either irrational or full of you know what. Any Listing agent when offered the opportunity to get either (1) 4-4.5% of the sales price as a result of a sale to an unrepresented buyer who is asking for 1.5-2.0% of the commission back either via having the listing agent represent them, kick back a portion of their fee, or agree to rebate their commission to the Seller so that the Seller can then provide the Buyer with a Settlement credit, or (2) 3% of the Sales Price as a result of a sale in which the buyer is represented by an agent who will be entitled to half the commission, is going to choose...wait for it...wait for it... you guessed it! Option #1. The reasons this site is full of agents/brokers saying otherwise are twofold: (1) When they're not the Listing Agent, agents frequently, wait for it, wait for it... are buyer's agents! If we got rid of buyer's agents (by the way they do very little if you already know which home you want to buy and you can use Zillow or the local county property website to check comps, recent sales, etc, and know how to use google to find your own appraiser, or inspector, etc.) all these folks would have their salaries cut in half (or a lot of them would simply be out of jobs); (2) They want Sellers to think that even if an unrepresented Buyer comes along, the Listing Agent is still entitled to 6% (i.e. they should get paid twice as much as they ordinarily would for doing basically the same amount of work....the Selling AGent is going to have to answer all the same questions that the Buyer is going to ask even if there is a Buyer's AGent, only difference is who is asking the questions.).

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.
1 vote Thank Flag Link Fri Sep 5, 2014
As stated

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.
1 vote Thank Flag Link Wed Dec 12, 2012
I would not recommend going into such an important real estate transaction with out representation. Especially since you are not paying their fee.

Here are reasons why it pays to work with a real estate agent...

1.You’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. They’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 doesn’t sell due to advertising alone. In fact, a large share of real estate sales comes as the result of a practitioner’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 don’t know a CMA from a PUD, you can understand why it’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 you’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 — it’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 they’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
Crye-Leike Realtors
(678) 799-4663
1 vote Thank Flag Link Tue Dec 11, 2012
Hi Xilu, the sellers agent is representing the seller and is going to act in the best interest of the seller. It is very important to have someone represent you that's going to act in your best interest. At time of listing the seller signs a listing agreement with sellers agent stating what the commission will be. Seller already know they will have to pay that % they agreed on. They have a binding contract. If you have any further questions please feel free to call
Kirk Smith
Exit Platinum Realty
1 vote Thank Flag Link Tue Dec 11, 2012
Not at all. Usually, if no buyer's agent is used then that full commission will just go the listing agent.

Laquita Baez
Licensed Realtor in NJ and GA
Weichert Realtors
1 vote Thank Flag Link Tue Dec 11, 2012
In Union New Jersey there is a listing agent doing the 'Happy Dance."
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.
1 vote Thank Flag Link Tue Dec 11, 2012
"That's when I do the happy dance" - Thank you for pointing out the EXACT reason an experienced buyer should NEVER hire a buyer's agent: The listing agent will be MUCH more motivated to convince the seller to accept an offer from an unrepresented buyer since they get to make an extra 2-3% percent (thousands or tens of thousands of dollars!), even if the offer is less than what the listing agent thinks the house should sell for. The agent's fiduciary duty to the seller may very well be replaced by the "Happy Dance" as a broker just described.

Even if there is a slightly higher offer from a represented buyer, the listing agent can renegotiate his fee with the the Seller, so that they both make a little more by accepting the lower offer from the unrepresented buyer - here there isn't even a breach of a fiduciary duty.
Flag Sun May 12, 2013
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
cell 201-207-9307
office 908-688-3311
fax 908-688-9212
web: http://www.BarryGoldmanRE.com
1 vote Thank Flag Link Tue Dec 11, 2012
Hi Xilu,wether you use an agent or not is not going to save any money,you will propably end up paying more for the house.Seller's agent represents the seller not the buyer and is untitled to a full commission if the buyer goes directly to the seller's agent. You need professional help thru the whole buying process.I work and live in Union and I am very familiar with the Union Inventory.Please call me or visit my website at http://www.4homeconnection.com a full search of houses.
1 vote Thank Flag Link Tue Dec 11, 2012
Your negotiating power will come from getting yourself an experienced buyers agent.
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.

Joe Nunes
REMAX In Action
1 vote Thank Flag Link Tue Dec 11, 2012
that depends upon the type of listing agreement exists. It is most common that seller will pay entire commission to their agent. (it could be mor eor less than the 2.5% you mention as fees are negotiable) Are you also going to avoid using an attorney to save that fee? Perhaps you may also not get home inspection and save more.
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.
1 vote Thank Flag Link Tue Dec 11, 2012

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.

Tg Glazer
Coldwell Banker Residential Brokerage
1 vote Thank Flag Link Tue Dec 11, 2012
Hi Tg, thanks for the explanation. Also, is it a good idea to get a buyer agent from the same company as the listing agent? I heard that it may cause unnecessary trouble than the benefit. Thanks!
Flag Thu Dec 13, 2012
Real Estate agents are going the way of the dinosaurs. Every yenta housewife who has nothing better to do when their rich husbands bring home the bacon take a weekend course to become a "Real Estate Marketing Professional". There is a thing now called the "computer" that accesses the 'Internet". A listing agent wants 3% to put your home up on Zillow, Trulia, Realtor.com, and the local MLS. Can do it yourself for free with the exception of MLS. Can do that for a couple hundred bucks but need to add a buyer agent commission. The only person that has any value is the person that can bring you a buyer. Chances are that the buyer is watching the sites for new listings and will call direct if their agent does not have access to the property because no fee was offered. 30 years ago I used to day trade stocks and the fee was hundreds and hundred of dollars through a broker, even without their "professional advice". Now I can do it online myself for 20 bucks. Sooner or later the real estate industry will render their agents as useless as the full service stockbroker.
0 votes Thank Flag Link Thu Jun 9, 2016
Everything is negotiable, even after the seller signs an exclusive listing agreement. While I agree, many people are well served in being represented by their own agent, there are those rare circumstances where this may not hold true. Case in point, I list my deceased father's home for sale with an agent whose my cousin, as I live out of state and already have a relationship. I'm an attorney and my practice area is real estate and finance where my life is consumed with complex transactions. Cousin/agent agrees that if he also finds the buyer, he would reduce his fee to 5% which is fair. While we're completing deferred maintenance and preparing the home for an open house in three weeks, an investor builder makes an all cash offer with only two weeks needed for due diligence. I let him know it is listed. Two days later, he has his partner whose also a broker, send me the Contract, without any agency fees. I contact my cousin and make sure he is protected as the listing agent. Addendum to Contract are sent and Escrow money goes hard in two weeks after disclosures and inspections completed. At this point, the home still has not been listed in MLS, there has been no open house , no sign out front, nor has my broker worked towards any back up offers. I continue to deal directly with the investor builder. After deal is a go with closing in two weeks, I call my cousin/broker with the good news. I'm still happy to pay him 3 % and thought I would be generous and add another point to 4%. Surprisingly, he tells me he wants the full 6% and states this is coming from his company. I tell him if he insists on receiving the full 6% percent, then he's open to being sued for non performance. There was no listing on MLS as stated in the listing agreement, there have been no marketing or negotiating activities on his part, nor has he even shown the property in hopes of having multiple offers. He's had no communication with the buyer or partner/broker who is not asking for any commission. While the Listing Agreement has a mediation clause, under state statute where the home is listed, his agency can still be sued for non performance. Needless to say, my broker/cousin and his agency were happy to receive 4% commission. Although they did not perform, they were a back up if the original deal did not go through. But I quickly learned that I would have to do most of the work in the final analysis. Sometimes things need to be renegotiated when circumstances warrant. Yes, I know, never do business with family.
0 votes Thank Flag Link Wed Jun 1, 2016
More likely that the agent will work as a dual agent and still apply for the 6% commission.
Tom Hinz http://www.shortsaletosell.com
0 votes Thank Flag Link Tue Feb 2, 2016
If the house is already listed with an agent then I would expect the seller to not want to deal with someone that is not represented by an agent. It would be a disadvantage for you in that case. Sellers don't like to deal with inexperienced buyers agents let alone someone with even less experience just trying to save a buck. You would have to prove to the seller you know more about real estate than the average realtor to be taken seriously. Everyone wants to save a buck but there is so much more than that to a transaction. Who is writing your contract to buy the property? Do you know the timelines involved? Do you have all the needed inspections ready to go? These things would be a concern for a seller. A good price with bad terms on a contract won't work. The seller may have a timeline to keep on their next deal and if you can't stay on top of yours on this deal if can put the seller in a pickle. The seller will need to be confident things will be done. If you are planning on using the sellers agent to write your offer and guide you through the process then expect the agent and brokerage to charge the 5%.
0 votes Thank Flag Link Mon Feb 1, 2016
would not having a buyer's agent influence or improve your chances of getting the house in a hot market/area? For example, if someone has a buyer's agent and offers the same price or slightly higher than someone with no buyer's agent, would the person without a buyer's agent most likely get the offer accepted as the seller's agent would get a much heftier commission?
0 votes Thank Flag Link Mon Feb 1, 2016
Depending on the contract the seller signed to list their home, they may be required to make full payment of the commission stated. This has nothing to do with the buyer. You should always use an agent to represent your interests. Most of the time it does not cost you anything.
0 votes Thank Flag Link Wed Dec 10, 2014
if you are local NEVER NEVER hire a buyer's agent. Whenever you read a response look who has posted the response. If a broker telling you, always hire a broker, go figure.

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....
0 votes Thank Flag Link Wed Dec 10, 2014
In New Jersey typically the buyer's agent commission is paid by the owner. If you represent yourself there is no savings. The seller's agent already has an agreement with the owner, if there is another agent they will share the commission, but if there is no agent the seller's agent can collect the 5%.

If the home is for sale by owner then this may change the pricing, specially if the home was on the market before.
0 votes Thank Flag Link Thu Jun 20, 2013
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