Billy
I fully agree with your comments. I have a friend who recently advertised and sold his home using Craig's List and it was absolutely 'free'.

Pat,
It is unfortunate that your relationship with your current REALTOR is at this level. If indeed you feel your agent is not providing the service level you were expecting, then most Real Estate Brokers will allow you to cancel your buyers rep agreement. Be ware though....this may not eliminate your need to pay the 3% you have stated you are paying the agent/broker. More likely in this case you would be dragged into a court battle with you against the agent, broker, and the local board of REALTORS.

As many have stated, you are typically not the one who pays the buyers broker fee rather the fee is pre-arranged through the listing side of the sale. If you did discuss with either the listing agent or the sellers directly this option of eliminating the buyers agent side of the transaction, then you and all those involved are in direct violation of contract laws and will no-doubt be found guilty of this...trust me! The finding of the potential home to purchase is one of the smallest and easiest parts of the real estate transaction, It is important to look at all the steps involved in the transaction. If your agent is worth any of their commission, they should be able to more than save you the 3% during the negotiation of the sale alone! It sounds like you have discussed things with the listing agent which most likely means you have given away some of your negotiating points and probably much of your motivation. If this listing "agent" did in fact bring up this option then they should be brought in front of their board for punishment...I certainly would not trust them as an agent at this point. Keep in mind that their job is to represent the sellers side only!

If you truly still feel that this is worth your effort to try and "save a buck" then pull out your buyers rep contract and read carefully. I am a Realtor in Minnesota, our contract states that the buyer would be required to pay the fee even if the contract is canceled "unless" they are required to pay another broker for that transaction, this would not save you the 3% rather it would allow you to hire another agent who would then receive the buyers side brokerage fee. In these tight times it seems like everyone wants to "use a coupon"!
~Chris Robertson

Contacting a Realtor after the house hunting is complete is just the beginning of the procees of getting the property purchased. Realtors love to work with buyers because the seller has negotiated a commission with the listing agent to pay both the listing agent for marketing and the selling agent (that's the agent that represents the buyer) for bringing the buyer. That fee is advertised in the local MLS. The agreement between the seller and his agent is not a part of the contract to purchase the property and is an offer made by the listing agent to pay some portion of the commission charged the seller to the buyers agent. In short you the buyer pay no commission to the buyers agent. In some cases under a buyer agency agreement the buyer will agree to pay a consulting fee or an hourly wage to the agent, those fees are negotiable between the buyer and the buyers agent.

An excellent question. That discussion should have taken place with your Realtor when the two of you first discussed working together. Bear in mind that finding the house is, maybe, 10% of the process. Your Realtor's real value is in her/his knowledge of the market, access to comparable sales data, monitoring the closing process, getting the inspections, survey and title work coordinated, making objections, negotiations, etc. There are a hundred details in the process and it is very easy to miss one that could haunt you for the rest of your ownership of the property.

I am surprised and a bit concerned by the diversity of answers.

First of all, nobody can really answer this question properly without knowing some very important additional facts. The respondents would have to make assumptions as I have and you know what happens when you assume... : )

Assuming you have a signed written agreement with your agent and they are representing YOUR best interests for a given period of time. If you found the perfect home after signing an exclusive buyer agreement with the Realtor and it was within the specified time frame, then you would owe and should pay the full commission. After all, the Realtor negotiated for you and hopefully got you a tremendous deal on the house you were interested in at a better price than you may have gotten it for yourself. The agent will be checking with the attorneys to make certain contracts are expedited, will probably check with your lender to make certain all is going smoothly and probably be in touch with the seller's agent to make certain closing takes place within a specified period of time. In addition, the agent will probably witness the home inspection and initiate further discussion if warranted.

If you found the home and did not have a written exclusive agreement with anyone, then you should have found someone else to represent you for less since you had done the work in finding your home. Since fees are entirely negotiable, you could possibly have found cheaper representation, but not necessarily better representation!

I hope this helps you!

Jo,e Joe, Joe.... I've run into people like you before. You think everyone is out to cheat you, and nobody works hard for a living.
"...wait until the listing expires..." THAT could be up to a year. In the meantime, someone with a GOOD agent comes along, negotiates a good price, and poof! your dream home is gone.
(And guess what? A lot of listing agreements have a clause where the agent gets the commission for a period of time AFTER the expiration date.....)
Re: "Also, don't buy any of this talk that the seller pays -- all the money is coming out of your pocket, you just hand it to the seller who hands it to the agent. Also, don't buy any of this talk that the seller pays -- all the money is coming out of your pocket, you just hand it to the seller who hands it to the agent. "-- are you NUTS? The seller is in a contractual agreement to pay a commission for the sale of their home- NOT the buyer.
When I bump into someone like you, I don't work with them- I fire them. I'm here to provide valuable service and experience to someone who needs and wants that- it's a win-win. Working for someone with your attitude is a losing proposition.....

Jr. -- I'm not interested in supporting your job. I'm sure that Pat works hard to keep a roof over his head, feed his family and pay his cable bill. He is questioning the value of paying full 3% ($15,000 min where I live) for a service. Based his question, I think he has legetimate concerns that he is overpaying for the service. I think he should avoid the buying agent altogether if possible, especially when you look at the amount of services $15,000 can purchase in other financial fields.

Joe's answer is a direct violation of most states Listing Agreement. If found out, both the buyer and seller could be liable for Realtor Commission.

Joe is advocating conspiracy against the listing agent in that example.

If the seller's listing expires then they've got a huge price problem, in which case you better get a good Realtor to make sure you get the best deal.

As others have commented already, the commission is generally paid by the seller. HOWEVER, more agents and brokers are offering commission rebates to clients or customers in this situation. The way you take advantage of this opportunity is by having an agent who is representing YOUR best interest and negotiating a better deal with him or her -- depending on how much work you do yourself. That said, it's not always the legwork that earns the commission. Your agent should be a skilled negotiator AND a clear & detailed process for a smooth and complete closing of the transation. It's also smart to use an agent with a deep understanding of this exact neighborhood. If your agent does not have that understanding, you could be making a big mistake since you may not have critical information that effects the deal.

This is Pat again- OK GUYS -- - I got my answer from my realtor- apparently some of you think that I am a seller- I am the buyer and a 1st time buyer---apparently I did my homework after I asked the question ;) My realtor states the seller is the one that pays her commisson- so I don't have to worry about coughing up any extras for her...All the answers I received was very informative - and I do thank you all.
Have a great weekend

This is Pat- I do appreciate all the answers- I spoke to the realtor I will be dealing with and she explained her way of doing things- thank you again for all your responses.

I've been reading the arguments on this thread with some amusement, I'll admit. Just my own personal wrinkle to add to an already wrung-out discussion. When representing a buyer, a good agent does even more than locate a property, negotiate the deal, do the back end work, etc. While all of this is true (except in this case where you located the home yourself), I feel that this is still the small picture. The larger picture of being a buyer's agent is helping your client choose the correct property. You really want a professional ally on your side to make sure that the property you wish to purchase is a solid investment without any deficiencies that might affect future value and enjoyment. Often, I find my job involves much more discouragment than encouragment when it comes to selecting a property. Saving a percentage, but making a poor purchasing decision is tantamount to cutting off your nose to spite your face. I personally wouldn't want to potentially pocket 3% at the expense of the remaining 97%. If you do not feel that your agent is protecting your interests, you need a new agent. Making the big choices without a reputable, professional guide is potential trouble.

You entered into a contract with the Real Estate Professional to help you find a property and to represent you in any negotiations, for this you agreed to pay him 3%. He your Buyer's agent by contract. The Realtor surely did his due diligence and has helped you up to the time when you found another home possibly a FSBO. In this case, you still owe your Buyer's Agent the agreed upon 3% of the purchase price. The reasoning is the professional was doing everything possible to connect you with the property you instructed him to find. You happened to find another property first but that was not his fault. In many cases finding a home for a client is actually a team effort. Consider that you are still utilizing the Real Estate Professional's experience and oversight up until and including the day escrow closes.

My opinion is that you should choose a Realtor to represent you that you feel is a partner in your activities. In all cases the buyer is making the buying decision and it is impossible to decide on a home without significant time on the ground looking at properties. You should be able to commnicate your feelings to your Realtor partner. He or she should be able to answer your questions and concerns. The Realtor relationship is more than that of a house finder.

What I cannot tell from your question is whether your are talking about the listing broker or your broker. In Texas, the listing broker has an agreement with the Seller, so you are not paying the fee. For that matter, your Realtor is generally paid from the Seller side as wel, but not alwaysl.

My opinion is that you want someone to represent you. If you sign a contract and hire a Realtor, your Realtor has a fiduciary duty to you and you alone. The Realtor has a duty of fair dealing and honesty with all parties, but that is not the same as a fiduciary duty. In a fiduciary duty, the Realtor is obligated to put your interests first, even above his own.

In your case you might also consider hiring an attorney to represent you. Generally and in Texas Attorneys hired by you are also in a fiduciary duty to you. You can have a Realtor and Attorney or one or the other, but I would get someone to look after YOUR interests.

These are my opinions. I hope they are helpful.

http://reserrealty.com
http://donreser.com
http://donsapartments.com

Much will depend on State laws in each area.. some prohibit rebates .. in other states a rebate or credit is fine. If all you want/need is a discount broker then that is who you should be working with.. there are a number of fee for service companies who ofer minimum service for a lesser fee.
However buying a home is often about more then "finding a house" on the internet.. many times what looks great on the internet is not so great in real life for a number of reasons. The internet is the place to start.. A good agent brings more to the table then the "home" and may save you more then the commission involved.. sometimes what is saved is making a poor choice when the agent knows of a better option.
I bring a lot of experience to the table and can solve almost any difficulty that may arise.. which you may not appreciate unless you run into a major problem.. At that point you may decide I am worth my fee and more.

There is a lot more to the Realtors job then the public knows, many on going commitments. When the commission is split, the company split, the office fees, the IRS and the advertisement, the commission is not as much as you may believe it to be. The fact is FSBO are part of the inventory, I welcome FSBO. Some FSBO are very smart, most of them are attorneys, ex-loan officers, ex-Realtors, CPA's. Smart and strong minded people. As the market slides down to a buyers market, we find more people willing to list with Realtors. I actually refer all listings out in this time. I choose only to work with pre approved buyers. Even if my buyer has a product for sale, I refuse and refer that product out to another agent. The Buyers market is strong and once again rent is equal to mortgages, interest rates will remain low because of the large surplus of inventory. Now is the best time to buy real property, not the best time to sell. Arguing on the internet about what is right and wrong is useless and it is about efficient as advertising on napkins and tossing them along the highways.

WOW! I just spent the last 30 minutes reading through this thread and I am just amazed. If someone has the time, in today's world, to find and buy a home as discussed, then by all means they should. If they don't then that is why there are realtors and brokers to do the job for them. I can set up a garden in my back yard and grow my own food, but trust me, my family would go hungry because even though I have a green thumb, I don't have the time to do the work and when would I find the time to do my job, to continue to support my family, oh and buy the tools and seed, etc to work the garden and feed my family...see where I am going? Realtor get the brunt of a lot of what is discussed, but we are independant contractors and out of a commission, very little is left after taxes, splits, costs, mine and my families health costs, etc. When you go to your local Costco you are paying for the same things on the products you buy bult into the price of those goods. I know there are those in our industry that have a greater focus on the sale/commission, but I feel that is a small percentage they are just the ones you here about. I have met many fabulous realtors and brokers that have BENT OVER BACKWARDS to make a deal go for their client, working until midnight or later, and they made $500 on the transaction, some made nothing, but they simply wanted to see the joy of their client get the home they wanted. Quite honestly, for me, that is such a rush knowing the differnce I made in that persons life! I have made 3% to making nothing, it all depends on the transaction and the circumstances. I feel, as I'm sure the others in this thread do, that I have the best job in the world and it offends me greatly when people make blanket statements or make assumptions without consideration!

Thank you for allowing me to speak from my soapbox! ;o)

The commission, whether a percentage or a flat amount, was negotiated by the listing agent with the seller; it is part of the listing contract. The buyer is not a party to that contract and has no input about the amount of the commission. The commission being offered to the buyer's agent reflects what the seller is willing to pay for the buyer's agent to initiate, negotiate, and close the contract on behalf of the buyer.

Greg Wrote:
I was smug seeing as got more for the property myself than the two "professionals" would've and I paid 0% commissions . . . I'll never look back.
~~~~~~~~~
You go Greg! It's a new world out there...

Have you considered the overhead of your REALTOR to stay in business? Does the REALTOR send you magnets, notepads, helpful or local information? As a business, doesn't your REALTOR need to pay the E&O and auto insurance, gas, continuing education, cell phone, etc...

--Sarah,

Why is up to Pat or me to keep you in business? All businesses have costs and expenses. The last thing I do is justify the price of my product by telling my customer that the fees cover my phone, car insurance, computer equipment, etc. All businesses have costs. The question if whether the service is worth the cost. When I compare the cost of a real property seller/buyer vs. other areas of RE (title, insurance, legal, etc.) I think there is a legetimate concern that RE commission fees need to be adjusted.

I built (and sold) the same home last year. We interviewed two qualified real estate professionals and both suggested that we list the house for $799K. Given the crappy sales market I understood the need to price the home to sell but pricing it to sell and paying $56K in commission fee? Yikes!! We had a nice sign made "Home for Sale", did a $599 listing (a flat rate paid to a broker to have the listing placed on the sacred MLS). We did offer 2% buyers agent commission and were scoffed at by some real estate proffessionals. "I only show the homes that offer the higher commissions . . .". A buyer saw the listing and we made the sale. It actually settled for $805K and I was smug seeing as got more for the property myself than the two "professionals" would've and I paid 0% commissions . . . I'll never look back. Since then, I've purchased property, making my own offers without the "aid" of a realestate agent. This always equates to a better price for me as the seller knows they wont have to pay a buyers "agent". Everything is negotiable. I don't doubt Jr. is successful but let's be realistic about what's really going on here . . .

Wow, lots of spin and scare tactics here from the realtors. Fortunately the Dark Ages are gone and The Truth is here for all to see. The Secret Art of Real Estate is a thing of the past. As a realtor, you will be successful if you learn how to operate in this new world of Information. Or you will become a dinosaur.

The truth is this - the process of buying and selling a home is not that complex, and there is plenty of information available EVERYWHERE for anyone who wants to purchase their home on their own. Yes, you need to be educated if you want to do it on your own, but don't let realtors scare you into thinking it's complex evil voodoo magic. It's not.

A couple of misleading statements repeated over and over again:

"Lawyer to review contract costs $500/hour"
C'mon realtors. You're not paying $500/hour for contract review. Unless you're doing a very complex sale, offer and real estate sales contracts are standardized. My lawyer offers copies of sales contracts for free and review of a sales contract costs $125. TOTAL lawyer costs for my last sale were less than $500. I await your spin.

"The seller pays the commission."
This is technically true. HOWEVER, a smart seller looks at the bottom line in the sale of their home. That means if I'm selling a home for $400,000 and paying 3% buyers broker commission, then my bottom line is $388,000

If a buyer is able to come to the same seller without a realtor, and the sellers listing does not obligate him to pay the commission in this circumstance, then the seller puts the full $400,000 in his pocket.

Suppose that seller gets 2 offers on this home:
Offer 1 : $400,000 and buyer has a agent who will get 3%
Offer 2 : $394,000 and buyer has no agent (so no commission will be paid)

All other things equal, which offer will I accept? Easy - offer # 2 because even though the price the home sells for is less, I get an additional $6,000 in my pocket at the end of the day! And the buyer - who did all the work of finding the home themselves and therefore deserves it - gets a $400K house for $6k less. Offer 1 with the buyers broker would have to bid at over $405,000 to even compete with Offer #2.

How do I know this? I've sold a house like this! Yes, it's legal. No, the lawyer didn't cost $500 an hour. No, I didn't collude. I simply made the best decision for ME as a seller when the offers came. Bring on the scare tactics!

Stop spinning the commission like it's a non-factor. It is a real cost involved with the sale and purchase of the house, and yes it can be negotiated and leveraged. And in the end, the buyer is effected by that commission, don't let the spin fool you.

"Realtors always negotiate the most terrific price"
Bull. Realtors - on both sides - want the home to sell and will do what it takes to get the sale done. Sellers realtors will happily have you drop price $15k if it means a faster sale, and Buyers realtors will happily put you over the top of budget or in a junk house they can to get that sale asap. 3% is alot of money and $10k-$20k in the home price either way doesn't really effect the bottom line. Go on realtors, tell me about the code of ethics and laws and how many hours of classes you took. The Truth is, your ultimate goal is to close.

Don't get me wrong - I don't have anything against realtors and the work on both ends does have alot of costs and time involved. But stop with the scare tactics already. There is a wealth of information and home sources available, and if your buyer is outpacing you, you're doing a bad job and they shouldn't have to pay.

As for the original question - if you signed the buyers contract with a realtor to pay them 3%, then you are contractually obligated to allow them the full commission even if they stink.

However, I think you are right to feel like they should rebate a portion of their commission in this case.

The problem is - most realtors probably won't - or can't - make this deal. Why should they - they have you right where they want you, and they have the law to back them up!

Moral of the story is - don't sign buyers broker contracts and you don't have to worry about this. If a realtor won't work with you without a contract, find someone who will. They're out there - there are TONS of realtors everywhere who will be happy to help you. If they do a good job, reward them with the sale.

This sensitive subject has become a forum for insecure or inadequate realtors to express their frustrations at what is an erosion of the need for the agent. It is the agents that have made it "industry standard" for the seller to pay the buyers agent. As a seller, why should I pay your agent? Negotiate the fee and pay your own agent, that ought to save you money on the purchse as I don't have to "build in" an additional 2 to 4% on top of what I want for the home.

To answer Pat's question - presuming you do not have a contract with the agent, you're not obligated to use them. They didn't find the house - you did. Why is that? Represent yourself and negotiate a price based on what other properties of like kind have sold for. Make it contingent on a home inspection that finds no existing problems. There might be minor problems that are discovered but you can negotiate something more with the seller in this case or you can choose to walk away - entiltiled to a full refund of earnest money. Make sure the contract clearly states the rights you want to have. A good realestate attorney could handle all of the actual contract matters for $1,000 (probably a lot less), more if you want them to attend the settlement. This is a lot more economical than using a real estate "agent". Real estate agents want you to believe that you need them but for the majority of us, we really don't. Given the sea of unknowlegeable, unimaginative, untalented, lazy "agents" out there, it is important to realize that there are people there who can truly be "your agent". Not just a wind bag, middleperson trying to advantage of an easy situation (seller pays) but an informed, seasoned, articulate, educated individual worthy of forfeiting hard earned money to. God agents are there but they are further and more far between than we imagine.

With hard work, patience & literacy, we can do most of these tasks in a much more economical fashion. Good luck . . .

Joe wrote:

Sondra, I'm sorry if I wasn't clear. I don't mind paying for a service. The question is the cost of the service in relationship to the value. As Jodi, has mentioned, the amount of time that a buyer works with an agent has shortened, while at the same the prices of homes and the commissions associated with the buying/selling those homes have skyrocketed. Jodi and Glen are both very forthcoming with their advice and acknowledge the challenge. You (Sondra) and jr. just seem interested in defending the status quo.
~~~~~~~~~
Joe the fact is it's irrelevant to you in this case what the fee is. The fee has already been negotiated between the agent and the seller. Would you agree that sometimes a buyer walks into a store and picks something up and buys it, and other times comes back a few times before making their decision? Is the price of the item different? No.

Just call up the owner directly and see when the contract with their current realtor expires. If you're willing to wait tell them you will call them with they aren't under contract. Also, don't buy any of this talk that the seller pays -- all the money is coming out of your pocket, you just hand it to the seller who hands it to the agent. If you are comfortable with the process avoid the Buying agent! You can get an attorney to go over docs for $500/hr - keep that in mind when you are paying that 3%.

There has been a lot of good information below. I will just add my two cents. As agents we do a lot of work that people do not see so that we can be of the best possibe service to our clients (at least I do) - unless there are special circumstances, the listing agent negotiates a commission with the seller and then the listing agents offers part of that commission to the buyers agent - so technically the seller is the one paying out the commission - a buyer gets services from an agent without there being any cost involved for those services to the buyer (unless there is a transaction fee that many agents have started charging).

The seller is usually responsible for the realtor fees. If you are looking at a FSBO and not a house already listed with a REALTOR it can be a different story. In most cases fsbo's are willing to work with realtors, you do however run into some that do not. If you want agent representation on a house that the seller refuses to pay a realtor then you would be responsible for the realtor fees. As far as how much, that is between you and your realtor! With a limited fee you may get limited service.

Hi Pat,

Within my agreement, it states that if the buyers efforts, or my efforts produce a home that the buyer wants to buy, that I am still due a full commission. Finding the house is the first step in making a purchase, but its only one piece to the whole complex puzzle. Now that the home has been found, the agent will do the necessary research, provide disclosures, complete a CMA, draw up the contract, negotiate the best terms and price, provide referrals, aid in the inspection, assist with financing, coordinate the appraisal, schedule the closing. And he/she will do all this while representing your best interest, taking on (most) of the liability and being your record keeper 7 years. I hope this eases your concern for the cost. Best of luck to you!

Melissa Mancini, Realtor, CBR, GRI

Chris
Finding the right house is one of the most difficult things for this Buyer to find. I looked at numerous homes since January and felt a disconnect with 98%+ of them. Simply put, there are a lot of lousy homes out there and also ones with some serious defects.

I believe a good Buyer's agent should pre-screen homes knowing what his client's tastes and standards are before just showing him a bunch of junk.

Pat...you have asked a very loaded question which appears to have sparked the interest of many agents. Bottom line is you are the boss...if you have a Buyers Agency Agreement then the terms should be outline as to how and how much you will pay your agent.
Please understand that finding the house or property is in some cases the easiest part of the transaction, especially in today's market. Bringing that property to closing and ensuring that your interest is protected is where you want to make sure that you focus your attention. Do not follow victim to the mistake I see so many buyer make in attempting to save pennies then exposing themselves to thousands. The old saying you get what you pay for is very true in many cases, especially Real Estate.
I could share with you many stories of people who attempted to use discount brokers or even went it alone. Sure they saved so dollars up front but now they are finding themselves in situations that could amount to thousands. They would have gladly paid a higher commission had they known now what a Professional Real Estate Agent could have helped them steer clear of. Just a friendly bit of advice.

Hey Pat!
This thread is going to go on and on.... can you tell that you've hit a nerve here? I think the general concensus by the panel is that the percentage has more to do with your perception of what a realtor does for his/her fees...

Trust me, its 100x's more than anyone outside of the business can imagine.

Again, compensation is negotiable - however; if you needed emergency surgery on your ruptured appendix, would you hire a part-time "got my degree on-line" discount surgeon, or would you want someone experienced and fully trained?

For that matter would you do the sutures yourself to get a discount, and send the surgeon a bill for credit? I know it's an extreme example - but you are implying that the realtor just has to push some paperwork and be done with it....

This is hardly the case and the panel has outlined the process quite well in the previous posts!

I agree that a good Buyer's realtor can earn his 'keep'. However, he/she must be good and also at all times loyal to his Principal (Mr Buyer).

However, when a Buyer's realtor ignores clear instructions from the Buyer and ends up working with the Seller's agent to just force a closing despite things not being properly taken care of under the terms of the Purchase Agreement, then that realtor becomes a Buyer's disaster.

Depends, if you are the seller, the answer is yes. However some buyers feel since they have to get a loan to buy the house and part of the loan money goes to pay the seller, who then pays the listing agent who then pays the buyers agent, Some buyers feel they are paying the agent and not the seller. If that is how you are thinking or feeling, Then.....

Think of it this way. You go to Macy's departmant store to find a pair of shoes. There is no clerk there to help you. So you find the pair of shoes on your own. When you reach the cashier, do you ask the cashier if you can get a discount because you found it on your own?

Or another example, You feel a twinge in stomach, you know it's not a normal twinge, so you see a doctor, the doctor says you need an operation or some medicine. Do you ask the doctor for a discount in his fees because you discovered the twinge in your stomach on your own and then you went to the doctor so the doctor can write you a prescription or gives you a reccommendation to proceed another way.

For a real estate agent, just finding a home is not the only action or service that they do. They also write the contract, help interpret the contract, do negotiations, and a multitude of other tasks not readily seen by the buyer or seller. Therefore many times it appears to people that real estate agents don't really do a lot, except for finding a house.

Here is another scenario. You hire a lawyer, music teacher, plumber or some other service professional, and they cannot fix, correct, win or bring you to the level of competency you would like. Do you still pay the lawyer his fee, even if the lawyer doesn't win the case? (typically attorney contingency fees are 33% of the final settlement including expenses)

Do you still pay the music teacher for the time the music teacher is teaching you or your child. Do you sitll pay the plumber for his time if the plumber can't fix your water heater? More than likely the answere is yes.

Real estate agents normally work on the concept of a success fee or contingency fee(real estate agents fee or commission rate is substantially less than other professionals who work on a contingency scenario).

In other words if the transaction closes successfully, that is when the agent gets paid. Their fee is contingent on successfully closing the transaction. During the process, the agent usually does not ask you for payment of expenses, such as printing or travel expenses, auto expenses, computer time or charge you for knowledge or experience, etc.

Many other professionals and service providers do. Hopefully this answers your question or sheds some light on how real estate agents work. For more information about buying a home click on the link below, There you will find free articles you may read and download to help you.

Wishing you the best in your purchase. Bill Fung

To me it sounds like your a buyer and in this market I would be happy to say that "representation for a buyer" is great thing. The fact you found the house as nothing to do with all of the details and negotiations and making sure everyone stays above the board a legal. The moneys paid out to a Realtor are a lot less then your thinking, what Realtors do is work hard for their pay check. Would you ask the Butcher for a discount because you raised the cow? Would you ask the carpenter for a discount because you cut down the tree? Or best of all, I have a root canal to be operated on in my mouth and I am in pain, would I ask the dentist for a discount!? The percentage (%) is just a number. This number ($) is something we all work for. By time the company takes a split, the office fees, the IRS, the state tax and our advertising the commission is about 1%. So next time you pull in to Shell Oil ask them to take less for their gallon of gas.

It depends on your agreement before hand. If you signed a Buyer's Agreement then yes you should pay the Realtor the 3%...otherwise everything is negotiable. Please know that Realtors pay tremendous fees, have continuing education classes, and pay heavy advertising to be in the real estate business. In my opinion, the Realtor you used in this transaction is assuming risk; therefore, a commission is due.

I'm sure Jr. isn't a legal professional. I know attorneys/lawyers have to go through tons of school in order to practice law. That doesn't mean there in it for your best interest, I'm just stating the facts. To ba a reale state agent (not a broker mind you), I could qualify with a few night classes. I'm not trying to be insulting here, just keeping it real . . .

Jr wrote:
Me: Fine, go for it! List it yourself, FSBO. It makes no difference to me. Good luck!
~~~~~~~
Not a FSBO Jr, theres a realtor in back of me, they just take $500 instead of $15,000.


Jr wrote:
... And don't expect me, or any other agent, to handle YOUR NEGOTIATION or call YOUR BANK or YOUR attorney to see what's holding things up. In fact, I will probably not be bringing any customers, they will all be clients, and in that case, I will be working against you, not for you.
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Are these more scare tactics? More "Look at how complicated the Secret Art of Real Estate is"? Of course I do my part as the seller, my attorney is there for any legal issues, and the title company ... well, they do most of the work anyway, don't they?

And you'll work WITH me, because you want that commission and you don't want your buyers going to someone else. You'll close the deal and make everyone happy or you won't get paid. Stop trying to be scary.


Jr wrote:
Me: You don't have to do any work to market your home, you don't have to be available at all hours to show it and you don't have deal and negotiate directly with anyone, it's simple: but you have to PAY someone to do that for you.
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Even more. Of course I will market my home. But over 85% of homes are found directly through the MLS and by buyers on Realtor.com, aren't they? I'm there. The rest of the marketing is easy. I have an electronic lockbox and the buyers realtor shows my home, it's the way the world works, doesn't it? Direct buyers work with my schedule and are happy to do it. Here is where you try to scare me about strangers being in my home. Negotiations - again, not rocket science when you know what to expect. Stop trying to make your job seem so complicated!

The correct answer to your question is...what ever the contract says. Could you be more clear in whether you contacted the listing agent to do the paperwork or your REALTOR.

But, I feel the issue is more about the duties of a buyer's agent. In today's market, the REALTOR usually is not the one who finds the home. With the internet, most of my buyers know which homes they wish to see before they even call me. Pat, why didn't you contact a buyer's agent in the first place? That agent could have reduced your legwork, learned more about you and your needs and then been available for her professional advice on the home. Your REALTOR only knows as much as you tell them. What if you just really like the home and it has met all of your criteria, but you haven't consider future resale. Maybe that home is the only home on the block that doesn't have an additional bathroom. Would you know that? Did your agent assist you in the home inspection, pest inspection, appraisal? What if the agent could suggest a similar home but at a better price or better condition?

Have you considered the overhead of your REALTOR to stay in business? Does the REALTOR send you magnets, notepads, helpful or local information? As a business, doesn't your REALTOR need to pay the E&O and auto insurance, gas, continuing education, cell phone, etc... Not all REALTORS are out to rob your money. MOST OF US are honest and ethical people who love helping others purchase perhaps their largest investment of their lifetimes.

Jr wrote:
Sorry Billy, I don't take agency listings...
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Jr, unfortunately for you I don't need you to take my listing. There are plent of limited service / flat fee MLS listing services who are glad to take my $500 and list me on the MLS, Realtor.com, give me a website, and market my home in hundreds of other places (via the MLS listing). I can run an open house, place a newspaper ad, and show the home myself, it doesn't cost me $15,000 for this.

Don't want to show my home as a realtor because I am listed in this manner? Ha, is this ethically looking after the best interests of your client? Shouldn't you be showing them the homes that are best suited for THEM, not your financial considerations?

No worries in any case, many realtors will show that home and I am glad to pay them the 3% if they bring a buyer. Those who evolve get the money while the dinosaurs go extinct. If a buyer comes in with a realtor, I will honor their commission (they're legally entitled to it) .. any further negotiations are between the buyer and the realtor. HOWEVER, I will also leverage my situation if I'm able to bring in a buyer myself (don't you do the same thing as a listing broker?) If I did the work to market that home, I deserve the rewards, there's nothing unfair about that.

It would best to contact an agent that lists themselves as a transaction broker. They cost about $1,000 to do the paperwork. If there is a seller's agent involved they are making 3%. If you are comfortable negotiating with them, make them do the paperwork so they actually earn their 3%. Definitely reduce your offer on the property so that the net amount to the seller is the same as if you paid an agent.

The commission is something that is negotiated with that particular agent. Most of the time as part of the negotiation the seller would pay the commission. If this were not something the seller is willing to do then you would decide what would work between yourself, the agent, and the brokerage. I have helped a client purchase a home that he found and I just did all the paperwork and negotiation for less then 3% of purchase.

Yea Jodi!!! I too, work for a fee-based real estate company (well I actually co-own it with my husband, Kyle Cosper), Lowcountry Lifestyle is our franchise in the Charleston, SC area. I am happy to share my "commissions" with buyers, because of exactly what you said... they do a lot of the search themselves. What I still find upsetting is that potential buyers think they have to pay for my services, not the seller.

Commissions are negotiable. Yes, the seller "pays" the commission, but the buyer is paying the seller, so in the end the commission is really paid from the purchase price. Why don't you write down exactly what you want and contact a bunch of agents and find out what the market price for your service is? -

Pat,
You need to educate your self.
I have been an agent for years, If buyers really knew what they wanted it would most likely be the agent that found the home, unless you spend all day looking homes up on line or drive around all day. What makes people think that we should negotiate our wages everytime we go to work ( Do you do that every day) Well I don't and I have been a top producers many times over Why !! Because I work very hard for my cleints Finding the home is just the beginning. So if you feel your agent is not worth commission ( which YOU as a buyer are NOT Paying) Then find a another agent or do the rest yourself. First of all what makes you think we get all the commission in our back pocket.
M.K

Jodi wrote:
With today's Buyers utilizing the internet, most of them are doing their homework and a lot of leg work ahead of time and only using the services of a Realtor for an average of 2.5 weeks, rather than 9 weeks like it used to be. We think that Buyers should be rewarded for their hard work - so our company gives our Buyers a rebate of the commission that we receive. We are not the only company in the country doing so.
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Jodi? Are you so happy to make a sale, any sale, that you will pay the buyer to buy from you? If you are so quick to give away the money you earn, how can your clients expect you to be looking out for THEIR best interests? How much quicker will you give away their money. It's try in this day and age buyers begin looking on the internet: they email what seems all night long, they expect a reply quickly otherwise they move onto another Realtor. When we make an appointment to look at 5 houses, the internet savvy buyer arrives with print outs of 10 more he wants to see that he found, or emails another 10 the night before and asks "can we see these too?" whether or not we have already previewed eliminated these homes and not selected them for some reason or other. The internet has not made our job easier, it has made us have to be available 24/7. Don't short sell yourself and your abilities.

Jo,e Joe, Joe.... I've run into people like you before. You think everyone is out to cheat you, and nobody works hard for a living.
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Sondra, I'm sorry if I wasn't clear. I don't mind paying for a service. The question is the cost of the service in relationship to the value. As Jodi, has mentioned, the amount of time that a buyer works with an agent has shortened, while at the same the prices of homes and the commissions associated with the buying/selling those homes have skyrocketed. Jodi and Glen are both very forthcoming with their advice and acknowledge the challenge. You (Sondra) and jr. just seem interested in defending the status quo.

With today's Buyers utilizing the internet, most of them are doing their homework and a lot of leg work ahead of time and only using the services of a Realtor for an average of 2.5 weeks, rather than 9 weeks like it used to be.
We think that Buyers should be rewarded for their hard work - so our company gives our Buyers a rebate of the commission that we receive. We are not the only company in the country doing so.The buyer rebate is illegal in some states - but not PA. I would look online for: real estate buyer rebate (in your town) and see what comes up. Check the Brokerage out and make sure they are not just filling in blanks...utilize the services of a professional, maybe someone that holds an ABR (Accredited Buyer Representative) who will look out for your best interests, help with negotiations, contracts, financing - someone to take care of all the details for you - and will reward you for your hard work.

If you are buying a home, the seller pays the commission. The commission you would pay is when you sell the home
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And the money utilized for paying the commission to the selling agent is generated by the sale of the property. If the selling expenses are reduced either the sale price of the home could be reduced (benefit for the buyer) or the profit generated from selling the home could increase (benefit for the seller). No matter how you cut it the commission fees are an added cost which impact the amount of money spent by the buyer.

You are not paying your agent! The Seller is paying the commission. If your looking to save $$$ find your self a good Realtor whom is worth thier comission and can help you negotiate and save you $$$.

Joshua Jarvis writes: Joe's answer is a direct violation of most states Listing Agreement. If found out, both the buyer and seller could be liable for Realtor Commission.

Joe is advocating conspiracy against the listing agent in that example.

If the seller's listing expires then they've got a huge price problem, in which case you better get a good Realtor to make sure you get the best deal. -

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Good for you Joshua, you are 100% correct. A refreshing answer after reading agent upon agent who seem to be happy to cut their salaries.