If i do a good job getting the house you sell or buy and a better than competitive price, should I charge you extra? The only time I make a commission concession is if it is a buy & sell or I need to make something right that went wrong. For example, the washer and dryer are supposed to be included at closing and the seller got sneaky and removed items between contract date and closing date. In that instance I gave my buyer half the cost of buying a new washer and dryer. $500 went a long way to make that buyer very happy and received two referrals since. Best $500 I ever spent!
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Did you agree to pay for your Realtors gas ?
Did you offer to NOT take your kids out on weekends so you can stay and show clients the house?
At your Job, did your boss ask you to take less money home for the next month so he/she can complete a deal ?
I did not think so.
If you don't think we as agents should give up our income "thumbs up" this response. That should give a good indication how we feel about giving up our salary. Thumbs up if you like keeping your income and do not want to give it away!
As for buyers - same thing, they know going in how I work and what I will do. Kicking back on commission isn't on the list. Buyers don't pay for representation in GA anyway.
I love the idea that agent have to share in the "loss" - why exactly is that? Do doctors share in the illness? Lawyers share in the sentence?
but God forbid that the homeowner ask the Realtors take a cut just to get the deal done!
and this is what your paying for?? shame, shame!
Well, I also ask the nervy person that asks this question that If the attorney cuts his fee, the mortgage rep cuts the commission and the buyers attorney cuts their fee also, I will gladly join the group! I mean really, what does and attorney do? Some brief paperwork? The mortgage rep? Does what? Uses a calculator once or twice and then deflects questions? What do any of them do?
Oh, they won't cut their fees so you can make a deal? Terrible.
Oh really? When the agent has successfully educated the client on the market and priced correctly and then precipitated and negotiated an offer in a short time they should be rewarded for this acumen by a salary cut? Do you also believe that the longer a house is listed, the lower the commission should be? I once had a seller tell me they would pay me 6% if the home sold in a month, 5% in two months, 4% in three. . . you get the picture. I asked them "let me see if hear you correctly: you're saying the harder and longer I work, the less I should be paid? Let's try this. I'll list for 5%, if it doesn't sell in a month I'll take 6%, if t doesn't sell in 2 months I'll take 7. . . ."
Didn't the lender verify the funds? There was some mix up about the required amt. Who really knows? Everyone starts talking gibberish when you try to get to the bottom of things.
In any event, the buyer's agent called me back about 2 days later and said they got all but about $500 and could not get any more. They were already getting gift money and everyone was tapped out. Big mess.
So, I had a decision to make. I needed to make the deal work, or the property would have to be put back on the market. After 2 extensions, I was fairly confident the seller would not entertain another amendment asking for more selling concessions. So, I had a decision to make. The buyer's agent and I agreed to split the $500 down the middle. My commission would be less $250 and her's would be as well.
Was I angry that I had to take a hit on my commission? Yes. Did I think the lender should have better qualified these buyers? Yes. But I had to look at the big picture. I could not see losing a sale, and re-listing the property with more days on market for $250.
That's my take on it.
Having an agent take less commission doesn't really make a deal work, it only allows the seller to reduce their cost. Sometimes sellers look for the easy way out and want 'someone' to bail them out of the situation they are in.
The reason a deal isn't working is that the buyer does not feel the price of the home is worth what the seller wants. If those 2 people cannot agree on a price, there is no sale. It is sellers house and the seller gets the profit or loss when it sells. Maybe the seller is being unrealistic about the value of the home, maybe the buyer is unrealistic or just choses not to pay more even if it is worth it., I don't know.
If the listing agent did their job and the home are getting a lot of good exposure, then supply and demand will dictate the sale price and the agent deserves the full commission. If they didn't do their job, the seller should hire one that will and pay them what was agreed.
Should my stockbroker pay for my stock that dropped or is that MY reesponsibility. Should my Dr. give me reduced medical care because I got sick or is that MY responsibility?
In other words, man up, accept the reality we all are in and quit looking for a bailout.
If you have had a bad experience with an agent or agents and/or just have a skewed perception of the RE profession, all that means is you have very limited knowledge or experience of this profession as a whole.
People should speak of what they know, not make gross generalizations based on limited experience or misguided assumptions.
What Mack said "What might be one percent to Rep, is thirty-some percent to me..." is the truth and if a buyer and seller let their egos get in the way of closing a 6 figure or more deal over a few thousand dollars, why the heck should any agent give up a significant portion of the commission which has been contractually agreed upon?
There are bad agents but there are also plenty of bad (perhaps it would be better to say misguided) sellers and buyers. My last closing almost fell through because "my" seller threw away an old holey pool cover, thinking he was doing the buyer a favor by disposing of it. During the walkthrough, right before the closing the buyer discovered this fact and threatened to walk away. Over a pool cover. For a 340k house. Very nice people, all of them- I truly liked both the sellers and the buyers, but I wasn't thinking happy thoughts when I approached the buyers' agent and out of desperation (this deal had taken forever and a lot of sleepless nights to put together) asked her if she was willing to split the cost of a pool cover with me. She said absolutely not. My seller then saw the light and bought a new pool cover but was not a happy camper. Egos were set aside and everyone was able to get on with their lives.
Money doesn't grow on trees and agents don't have magical deep pockets. Daniel, or any other like-minded non-agent, follow around a busy agent from any office for a week, and you will then have an understanding of what it is really like to be an agent. Then I would love to see you justify your posts.
All the best!
The only time giving up commission "to make a deal work" comes up in my life is when I do a deal with an agent in my office who has multiple pensions or other sources of income, such as a highly paid spouse. The first thing they do is try to put their hands in my pocket.
If you are purchasing a HUD home (my specialty) you should note that HUD pays up to a 5% commission on any deal to the buyers agent. The winner of the bidding is chosen by who nets HUD the most money. In many cases agreeing to HUD paying your agent a 5% commission is not going to keep you from winning the bid, but if I feel that my commission is going to prevent my buyer from winning the bid I will agree to reduce it up front.
If you are purchasing a short sale and your agent is not allowing his or her commission to be reduced in order to make the deal work than yes you have a problem. Commissions should never hold up a deal. If your agent were experienced though they would know how to make the deal work and keep their commission in tact.
Your question starts with the word "should". Sounds like you already expect your agent to take less. What if the deal took much longer than expected and was much more difficult for your agent - Would he/she come to you and ask for a higher commission?
Responsible agents are committed to their clients and try to make things work for all parties involved. The point of negotiations is not "winning" but rather reaching a point of mutual agreement.
If an agent decides to chip in to make a deal work in lieu of a closing gift for their client, that seems reasonable to me. However, if the amount of this contribution is considerably above a typical closing gift, then I don't believe it's the proper approach.
It's a really good question and I am glad you are asking it.
Broker Associate - dre1844627
Paragon Real Estate Group
Now that I think about it, it seems even less reasonable that a transaction broker should chip in "to make the deal work," except perhaps in situations like those described below. I'll tell you this much, though - if I bring one of my many Monet paintings to an auction house, and they don't get "my" price, they don't "chip in" to make the deal happen. And they take 15-25% of the price from me, and tack on another 10-15% on the buyer's side.
A good Realtor will help you find the right solution to your problem.
What might be one percent to Rep, is thirty-some percent to me, and I don't need your forgiveness to extricate myself as a potential principal to the transaction.
However, if Rep signed up with one of your $75 flat-listing pals, there'd be no discussion, because there's just not enough money in there to even pretend to make a difference.
While a Realtor has a fiduciary relationship to you, just like a doctor or lawyer does, that relationship does not include paying for your deal to come together.
I seriously doubt you'd really want your Realtor to "discount" herself/himself at this important negotiating juncture. Here's why. After the deal has been negotiated and the contract executed, your Realtor must now effectively communicate with the 1) other Realtor, 2) attorney, 3) home inspector, 4) mortgage banker,
5) bank appraiser, and 6) you to pave the way to a smooth closing. Any emotional or financial screw-up, no matter how minute, will impact whether or not your deal makes it to the closing table. This whole process involves effective communications and intense follow-up by your Realtor.
Respect your Professional representative. Know she/he is fighting for you. Thus, this person deserves to be financially compensated as per your initial written agreement.
That said, if the circumstances for a truly needy seller warranted it, I would consider it. I don't do charity for the un-needy and I don't like extortion.
I have offered to reduce commission without being asked twice because it was the right thing to do in the circumstances, but it is rare.
There is no right answers here. Just a question which all need to answer and either celebrate the results or blame each other later.
If you think we as agents should give up our income/commission "thumbs up" this response. That should give a good indication how we feel about giving up our salary. Thumbs up if you like giving up some of your income to make a deal happen.
This is why there's a little heat to the discussion, because, frankly, the written agreement that Rep has with his broker is that he will pay the broker a stated and pre-determined amount, and now, he's threatening not to make the deal unless the broker caves on his fee.
David Ogilvy, famed advertising man of the 50s & 60s, wrote a book, Ogilvy on Advertising, a good read even for real estate agents. In it, he discusses how to negotiate the best deal with an advertising agency:
Pay them 16%, even though the going rate is 15%. The one percent won't make much of a difference to your bottom line, but it will double the profit for the agency, making you their most important client and ensuring you get top priority and the very best service from them.
Few people ever think that real estate brokers should ever get paid more . . . until you consider that maybe, just maybe, it's worth paying a premium to have a valuable Realtor on your side.
I had a million dollar sale last year where the % was 3+1 bonus. The buyer could not come up with an extra $3K at closing. Should I have walked from the total of $40K b/c of this reduction hit? I kicked it in on this one, but on others balked and wouldn't kick in 10 cents.
Scott Miller, Realty Associates, Boca Raton, FL
S/he's agreed to do that for a fee. If you're already in negotiations with a buyer, then your Realtor has done their job well, and as agreed upon. Why should you expect, at this point when your Realtor has performed as expected, that they should take a reduction in their fee?
"Concerned" in his comment below says that we (the Realtors) will expect YOU to take less, so why shouldn't we also share in the pain. We don't actually expect you to take "less"... we expect you to sell for "market value". And we expect to be paid what was agreed upon at the outset.
If you want to negotiate the Realtors fee (and commissions are negotiable), the time to do it is at the time of listing... not once they've brought a buyer to your door.
The agents should represent the clients, not the deal. If the parties won't come together, and the brokers start pouring glue into the deal to bring them together, maybe they're not representing the client so much as they're representing the deal.
I think it depends on the situation.
If your Realtor represents you in several transactions, I think they should give a little concession once in awhile as a thank you.
If this is a one time deal I would say no. Without the Realtor would you have come across this deal?
The Realtor is still incurring the same liabilities and doing the same amount of work required for other deals to close, so why is yours special? Do you go to work one day for $20 an hour and then $15 the next when you are doing the same thing?
Thank you for asking the question... I can't wait to see what the responses are.
Your agent just did their job by finding you a buyer, why would you expect them to subsidize your sale. Now it's your turn to make a decision to accept or not.
You could have negotiated the commission before hiring your agent (although if you did, you would probably have a different agent and no offer, or a lesser agent to consider).
Give me "x" of your commission, or I will walk!
Are you able to reach beyond a limited view of "thee"?
Can you envision and create a win/win scenario for "we"?
If I refer you another valid buyer/seller before the deal is done,
will you take X off?
At that point, feels more like a business decision and less like extortion.
What do you think?
Really doesn't make much sense and if a buyer and seller can't come to an agreement over a tiny percentage difference, then the issue has more to do with ego than actual finances.
For the agent, its not ego, its putting food on their table and paying the mortgage.
But in general, in a non-short sale or REO deal, if you as the seller start passing the hat, they shouldn't take a reduction and kick in, but some will. Based on the responses here, it is going to depend on your agent. It seems some will, most won't and some will do so begrudgingly to get the remnants of their commission.
Please realize that by asking your agent to do so, you risk polarizing them from you (for reasons found in most all the responses - unless they are the type that still wants you to be a fan of theirs) and you also need to ask yourself are you willing to lose the deal and your agent over a few thousand dollars. Because if I was your agent, I would be irritated at your ungratefulness for the services I provided to you to get you in escrow in the first place and politely tell you to pound sand, put your hat back on your head, and find your checkbook.
Going out on a limb here, check with the laws of your state, but in lieu of taking less on commission, they may be able/willing to loan you the portion you are seeking...that can be your next question! Perhaps that could be the compromise mentioned in a previous answer.
In the meantime, what are YOU contributing to make a deal work?
There are some instances where the realtor MAY bend a little bit....
In a short sale, the lenders may want to reduce the sales commission to approve the sale --- and in many cases, the realtors may agree provided that it is clearly stated in the MLS that sales commission are subject to lender approval and split 50-50 between agencies.
In other cases, if the realtor represents both buyer and seller, the realtor may agree to a reduced commission (1/2-1%) .
In other cases, realtors may chip in for expenses that may be a bone of contention between parties --- such as the cost of a home warranty.
With open, honest communication, compromise can often be acheived.
The life force of real estate practice relies on referrals. I don't just strive for satisfaction, I want fans!
Realtors succeed when clients acheive their opjectives. If it can be done, a dedicated professional will find a way.
Consider their explanation of the offer on the table. What are reasonable concessions to make the deal happen?
If you chose well from the outset, and have a realtor who wants you to succeed, together you can negotiate a compromise.