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Rep Chandler, Real Estate Pro in Oklahoma City, OK

Should my realtor take less commission to make a deal work?

Asked by Rep Chandler, Oklahoma City, OK Sun Oct 10, 2010

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Let's start from this frame of reference...
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!

If you like my answer, please check best answer-Thanks!
6 votes Thank Flag Link Sun Oct 17, 2010
I like it but need something stronger!
Flag Tue Feb 10, 2015
Did you kick in part of your weekly paycheck to advertise and market the house?
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.
11 votes Thank Flag Link Fri Oct 15, 2010
John on TV the agents may make that kind of commission or in the Luxury market but most of the time that is not the case.
Flag Thu Apr 24, 2014
bahaaa.. big difference in the cost of a tank of gas and a 30,000 bucks in commissions... wow!
Flag Fri Jun 14, 2013
That's a BS response. Companies frequently take less profit to make a deal happen. They still pay for the meals that make the deals. Realtors are more like self-employed or independent contractors than salaried employees. That is, they function more like a company than an employee. Also, what realtors are really interested in is a fast deal, not a good deal. If you get an offer for house today for say $150,000 the realtor will push you ta take that even if it might sell for $160,000 in a month or two. That $10,000 difference only means $600 for them but it means $9,400 for you. They really don't want to show your house 10 more times for an extra $600. So, if they want to make a fast deal that could cost you money you. have every right to point this out and request that they take bit less.
Flag Sat Oct 27, 2012
Well since this post raises an eyebrow or two lets take a poll:

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!
8 votes Thank Flag Link Sat Oct 16, 2010
To begin with, there is absolutely NOTHING a RE agent does that is worth $15, 20, 30, $40,000 for one transactions. NOTHING and I'm a licensed RE agent. RE is the ONLY occupation where you don't have to know what you're doing or do it well and you can make an income. With that said, a good agent is worthwhile...still not $15,000, $20,000, $30,000....and on. Most people work all year to make what an agent can make a 2-3 deals. I've closed over 2,000 transactions and 95% of the agents I've worked with don't have a clue what they're doing and their clients are not serviced well.Typically one of the agents is anxious to close the deal and they end up doing all of the work.Let's face it, the average person goes into RE because they think it's easy money. The really good agents are intelligent, very business savvy and hard-workers,they encompass 1-5% of the entire industry. Lenders are even worse and typically screw up most of the time. Their constant procrastination is intolerable
Flag Sat Jun 21, 2014
LOL, You gotta love Realtors! Look at the comments! How many of the Realtors promised everything under the sun, then all of a sudden, an offer comes in, the buying and selling agents have no problem with the homeowner taking a loss to sell,

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!
7 votes Thank Flag Link Tue Nov 30, 2010
Many times people call the listing agent (sellers agent) to show a property. I have showed many of my own properties. Then if you get the buyer and the seller it is called "dual agency". It is quite common actually. So not sure which agents you guys have dealt with, but must not be very good ones.
Flag Wed Jan 15, 2014
oh, and for the record, I've never heard of an agent showing the house. Buyer's agents show it, but seller agents do nothing but dump it on the MLS and wait. If the MLS would let home owners do that, there would never be a need for realtors. I can go to Realtor.com and look up recently solds in my nhbd, and what those houses had and what schools etc just as easily. I had to make my own fliers because his looked like crud. I had to take my own pictures since he decided 9pm on a cold March night was the time to take photos of the outside of the house - then I had to beg him to post MY photos so we got ANYONE to show up. Considering I've done just about everything but list the house on MLS, I seriously think he shouldn't be getting a commission at all. He should be honored to have been involved in the first place and take 1.5% for himself and his brokerage and give 3% to the buying agent (who had to find the listing and get his client to show up...least he did work!)
Flag Sun Jul 14, 2013
I agree with Dan! Agents have no freaking qualm with telling you to take the offer that came in 10% less than what other homes in the area have sold for RECENTLY (like within 3 months) but won't take any of that hit themselves? there's no incentive AT ALL for a realtor to hold out for the best possible offer from the buyer, 6% of $5000 is $300. The sell is out $5,000 the realtor $300 talk about disparagy, especially has each realtor involved is only out $150!

Much better solution, if the realtor said the fair market value of your home was $250,000 and then pressures you to take an offer at $200,000 then you should pressure him to make the sale at half his commission (so instead of 6% you only pay 4.5%) since he obviously DID NOT market your house right, he DID NOT do his due diligence researching the market, he DID NOT look for buyers buyers.
Flag Sun Jul 14, 2013
Boy! You must have had one helluva an agent! But no, as a buyer not an agent, I would not expect my agent or the sellers agent to kick in their commission to offset your loss. Shame on you!
Flag Thu Aug 30, 2012
I won't cut squat. I cover all of that up front and only take listings from clients that understand it's their problem, not mine. My job is to deliver a qualified buyer and get them as much as possible for the house - not to subsidize their loss. They'll pay 3% to a buyer's agent anyway. If they think it's a better option to let the house sit month after month....then it's their call.

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?
7 votes Thank Flag Link Sun Nov 28, 2010
This is a long dead thread, but since people still find it by Googling, it's worth replying to this (in my opinion) greedy idiot. Plaintiff's lawyers typically take cases on a contingent-fee basis. What that means is that they can work like a dog for two years, but if the client loses the case, they get a big fat zero. So, comparing apples to apples, lawyers treat their clients a heck of a lot more fairly than RE agents do.
Flag Fri Jun 27, 2014
This poor dead horse is getting the beating of the century.

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.
7 votes Thank Flag Link Tue Nov 2, 2010
Sellerbuyer, I'm sorry you had a Realtor who bought your listing. I educate my sellers about the market, what has sold, where they ought to price, and what they ought to change about their house. I also list the challenges to selling their house, such as it's location, condition or the number of homes on the market. But there are always homeowners who will interview Realtors and then hire the one who tells them what they WANT to hear, rather than what they need to hear. We call them "expired listings".
7 votes Thank Flag Link Thu Oct 28, 2010
Gamache Team; It is an option but I don't think a seller should expect it! If the agent has just put the home on the market and does not have that much invested in it, then you might want to ask him?
~~~~~~~~~~~

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. . . ."
7 votes Thank Flag Link Sat Oct 16, 2010
Your not being paid by the hour. You're being paid for the results you get. You're hired to sell a house for a person that isn't a real estate professional. The longer you take to sell a house, the lower and worse the experienced service level to the customer (your seller) is. Therefore, it makes sense that your commission should be affected. You want hourly pay? I'd be interested in seeing if you can get listings with terms of hourly pay.
Flag Mon May 12, 2014
Realtors should not be asked to reduce the amount of commission agreed upon in contract. Certainly there are situations when a transaction cannot close without a monatary contribution but in situations like that why is the realtor the first and only party asked to reduce their fee. If a monatary contribution is necessary to close the transaction then all parties involed should share in the contribution - buyer, seller, lawyer, agent etc.. Don't forget the appraiser got full fee, the mortgage company got full application fee, the lawyer gets full fee, the home inspector got full fee. Why is my work as an agent considered less worhy of payment ? This is how I feed my family.
6 votes Thank Flag Link Tue Oct 19, 2010
Why would the buyer pay more into a house that isn't worth it on the market? That's not the buyer's problem. As the seller's realtor, you should already know what the house will comp out to (at least close enough that it won't be a burden at appraisal time). If the appraisal comes in so much lower that the seller is unwilling to go all the way down, wouldn't you want to salvage the deal by putting some cash in? I guess it depends on the market. But if you're not in a particularly hot market, you might want to take your guaranteed 10k commission instead of dropping the contract and hoping to get your 20k commission. Also, hope the seller doesn't drop you as soon as they can.
Flag Mon May 12, 2014
Because you just got 20k for 1 hour of work, but you won't take 16k for 1 hour of work. GREED!!!!!!!!!!!!!!!!!!
Flag Sun May 11, 2014
I have done twice in my career. I did it just recently. About a week before closing, the selling agent called telling me the buyers needed about $1200 more to close. What should she do? I told her to go back to her buyers and tell them to find the money. Tell them that their emd was in jeopardy, and I wasn't sure what the bank would do if they didn't purchase the property. The bank/seller had already spent more than $2500 in lender required repairs which I had spent lots of time negotiating. Emails, contractor bids, etc.
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.
Web Reference: http://www.DesariJabbar.com
6 votes Thank Flag Link Mon Oct 11, 2010
Daniel said - so much for , " I will do everything in my power to get your home sold" BS

Daniel,
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.
Web Reference: http://JimSellsHomes.com
5 votes Thank Flag Link Mon Nov 29, 2010
You know Daniel, you've been all over this site, pasting a lot of the same answers to different questions and have been around for a while making your feelings about agents known.

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.
5 votes Thank Flag Link Sun Nov 28, 2010
Absolutely not. You negotiated the commission when you signed the listing contract. The current negotiations are between you and the buyer.
5 votes Thank Flag Link Sat Oct 16, 2010
Perhaps the reason clients think that a Realtor should kick in some of their hard earned commission is because so many of you are willing to do so "to make a deal work". Part of the problem with the publics perception of what Realtors do and how they earn their commission is due to the fact that so many are willing to devalue their worth by readily giving up some of their agreed upon commission. If we as Realtors valued our services as the professionals we are, then prhaps we would be more respected. An agreed upon commission is an agreed upon payment.
5 votes Thank Flag Link Thu Oct 14, 2010
It's kind of funny that one apparantly disgruntled person is so down on Realtors, and that so many took valuable time to not only respond but read these answers. I won't even take the time to give my opinion, he's not worth it.
4 votes Thank Flag Link Sun Nov 28, 2010
yet you just did....
Flag Wed Sep 3, 2014
Should my Realtor take less commission to make a deal work? How about.... Should my Contractor take less than previously agreed upon amount to make a deal work?
4 votes Thank Flag Link Mon Nov 1, 2010
Linda: Perhaps the reason clients think that a Realtor should kick in some of their hard earned commission is because so many of you are willing to do so "to make a deal work". Part of the problem with the publics perception of what Realtors do and how they earn their commission is due to the fact that so many are willing to devalue their worth by readily giving up some of their agreed upon commission. If we as Realtors valued our services as the professionals we are, then prhaps we would be more respected. An agreed upon commission is an agreed upon payment.

~~~~~~~~~~~~~~~

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.
4 votes Thank Flag Link Sat Oct 16, 2010
Wow some of these answers are outrageous. Commissions are always negotiable and you should negotiate the commission with your agent up front.

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.
4 votes Thank Flag Link Fri Oct 15, 2010
Consider this. After splits, the agent is typically working on less than 1.5% commission to begin with, whereas the seller is typically getting 94%+ of the sales price. So the impact on even a small commission reduction is likely to mean a huge drop for the agent. How fair is that? If a deal is that borderline, it's likely to run into other problems. If the agent has done all the work, it is appropriate to get the agreed-upon pay.
4 votes Thank Flag Link Fri Oct 15, 2010
Rep,

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.

Best,

Oggi Kashi,
Broker Associate - dre1844627
Paragon Real Estate Group
Web Reference: http://www.oggikashi.com/
4 votes Thank Flag Link Wed Oct 13, 2010
Scott, I don't know the answer to that. In the 1980s, we moved from a system where co-brokers were considered sub-agents of the Seller.

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.
4 votes Thank Flag Link Mon Oct 11, 2010
The Realtor should look at all options. Would a partial reduction in the home price and partial reduction in commission help the deal work? Can the buyer find the money elsewhere or is there something else the lender can do to help?

A good Realtor will help you find the right solution to your problem.
4 votes Thank Flag Link Mon Oct 11, 2010
Why would buyer put in much more money? Appraiser has stated, clearly, that the house isn't worth the agreed upon price. Why would I, as a buyer, pay much more? The seller should come down part way, the agents (both buyer and seller) should lower their commission a little bit, and the buyer may want to kick in a grand or two in order to have a deal (that is probably a month in the making) come to a close. If more $ than that is needed, the seller is going to have to accept the fact that their realtor deeply misrepresented the market value of the house. Realtors should know what a property will comp out to.
Flag Mon May 12, 2014
You're right, Daniel, I won't give up my fee to put your lousy little deal together.

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.
3 votes Thank Flag Link Sat Nov 27, 2010
Lousy little deal? Where were you (the seller's realtor) when listing price was decided upon? Did you do any research to find out what the home would comp out to? Were you counting on a cash offer from a sucker that's willing to severely overpay for a house? If not, then you might want to consider lowering your take, since you decided not to do your homework.
Flag Mon May 12, 2014
I dont think anyone is asking for you to give up your fee. I think sellers should expect the realtor to have some skin in the game. After all, all you do is dump the listing on MLS, populate it on realtor.com (et el) and wait for someone to want to buy it.

If you failed to do your research and listed it way too high, and now the sellers are stuck selling it for what they can get (for whatever reason) when maybe the sellers should have been given accurate information so they could decide to rent it, or stay put instead, or go into the deal understanding that they are listing it $20,000 higher than what they are going to get for it, then yes.

Otherwise, agent fees for sales should be prorated for what they sell it for. Make them be motivated to get top dollar. $1,000 is $30 commission for a salesman, of course he would rather the seller take a $5,000 loss and get the sale done now after all, if he's getting $6,000 in commission what's $150 loss?
Flag Sun Jul 14, 2013
The answer is "no." A Realtor only gets paid when a property closes; that means every 30 to ninety days, depending on how many closings a Realtor has in their pipeline. Yet that Realtor has to budget, like you do, to pay the bills for her/his household.

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.
3 votes Thank Flag Link Sat Nov 27, 2010
Absolutely not! Simply put, realtors earn their commissions with their hard work, persistance, and loyalty to their clients. Without them, there would be no transaction.
3 votes Thank Flag Link Sat Nov 27, 2010
I don't take listings at a discounted commission and after taking a listing, I have never had anyone ask me to cut a commission.

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.
3 votes Thank Flag Link Sun Oct 31, 2010
I hate to go against the grain here, but if I can kick in a little to close a transaction that would not close otherwise, I would be glad to do it? I don't like giving away my hard earned money, but if the seller does not have enough equity, or maybe the buyer is too short on funds to make the numbers work, who am I to stand in the way? I would hope that every agent would put people first and make the deal happen.
3 votes Thank Flag Link Sun Oct 31, 2010
This pretty much sums it up.

http://www.xtranormal.com/watch/7214397/
3 votes Thank Flag Link Sat Oct 30, 2010
I didn't read the comments below, but I would say yes. I have been active in the mortgage and real estate industries for the past 9 years. I was and still am willing to cut my commission to make a deal work. Something is better than nothing! It beats standing in the unemployment lines. I realize it's not about me, but about my clients.

All the best!

Ryan Smith
3 votes Thank Flag Link Mon Oct 18, 2010
I find it interesting that a minority of buyers or sellers think that it should be the Realtor who should add into the negotions from his or her commission. The real issue at hand is: 1. does the seller want to sell and 2. does the buyer want to sell? If they do then this does not even enter into the mix. Then buyers and sellers negotiate with good faith and come to terms on price and all the other terms. Many years ago I had a seller who thought me a great lesson. The house was agreed to price and terms, then the buyer wanted another $10k back on an $810k transaction. BTW the seller originally bought the house for his son. History repeats itself now the buyer was buying it for his son. My seller said the father will not loose the house over this money. He was right.....This does not always happen, but keep in mind the Realtor is just a facilitator and if the parties really want to buy and sell they will find a way without taking money from the person who is facilitating the transaction.
Web Reference: http://www.endrebarath.com
3 votes Thank Flag Link Mon Oct 18, 2010
The deal either works or it does not the decision is up to all parties concerned. An agent can't force the seller to accept nor can the seller force the buyer to buy . Neither can make the agent take a cut if the broker says NO. If they really want to make a deal they all will have to compromise.
There is no right answers here. Just a question which all need to answer and either celebrate the results or blame each other later.
3 votes Thank Flag Link Sun Oct 17, 2010
Well since this post raises an eyebrow or two lets take a poll:

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.
3 votes Thank Flag Link Sat Oct 16, 2010
Actually, Paul, it may hurt to ask, especially if you value the relationship.

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.
3 votes Thank Flag Link Wed Oct 13, 2010
Hi Rep. It really and truly depends on each and every deal. There's no one uniform answer across-the-board.

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.

GOOD LUCK.

Scott Miller, Realty Associates, Boca Raton, FL
3 votes Thank Flag Link Mon Oct 11, 2010
Your Realtor has agreed, as part of her/his contract, to do whatever he can to attract a ready, willing and able buyer to your home. Once s/he has done that, then they have agreed to assist in the negotiations of that deal.

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.
3 votes Thank Flag Link Mon Oct 11, 2010
Alan May, Real Estate Pro in 60201
MVP'08
Contact
Rep, my feeling is, if the buyer and seller can't come to terms, then the agents should stay out of it, commission-wise.

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.
3 votes Thank Flag Link Mon Oct 11, 2010
This is a great question, and a tough one.

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.

Best wishes,
Kevin
3 votes Thank Flag Link Sun Oct 10, 2010
You hire a good realtor based on their qualifications. If they can't justify the value of their compensation how do you think they will be able to stand up for you and fight for the value of your home. Remember, cheaper isn't better! I would rather pay more knowing the person fighting for me is qualified enough to fight for themselves!
2 votes Thank Flag Link Mon Nov 29, 2010
No.
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).
2 votes Thank Flag Link Sat Nov 27, 2010
Does your belief structure offer only win/lose scenario's?
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?
Mike@TheMikeNetzelTeam.com
2 votes Thank Flag Link Tue Oct 26, 2010
This has been beaten to death. Please pick another topic.
2 votes Thank Flag Link Mon Oct 25, 2010
I was just at the end stage of a negotiation today, and my co listing agent suggested that to the buyer's agent. She said no, if you do that and we don't get a meeting of the minds, then your seller will expect you to cut your commission next time you get an offer too. She's right.
2 votes Thank Flag Link Fri Oct 22, 2010
It is hard to wrap my brain around the fact that a purchase, that in most cases will be at least 6 figures, would fall apart over a tiny percentage of that purchase.
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.
2 votes Thank Flag Link Thu Oct 21, 2010
As others have stated, this is difficult to answer without knowing all the details. First, you should remember that the seller is getting almost all of the money from the sale, if there is any. The commission may look large to the seller, but after dividing between brokers, and each broker splitting with its agent, no one really gets a big chunk of it. The agent does a great deal of work and deserves to get paid. Operating on commissions, and with properties being worth only half their former value in many areas, our commissions are already cut about in HALF before we even get started. Your agent is a professional trying to make a living just like your doctor, lawyer, and dentist, and you in most cases don't ever try to get them to take less of a fee, so why would you do it with your real estate agent?
2 votes Thank Flag Link Sat Oct 16, 2010
Your details are limited. Like many others here, I would tell you it depends upon the situation. Would you ask your lawyer, doctor, plumber or insurance agent to take less? What services are you prepared to give up? It seems every time there is a problem with a closing, everyone wants to spend the agent's money first rather than looking for alternative solutions.
2 votes Thank Flag Link Sat Oct 16, 2010
You didn't say anything about short sale so I am going to presume your question does not pertain to that type of transaction. With a short sale, it is known going in that the banks may seek to reduce the agents' commission and that it will be split after the reduction. Again that is known upfront.

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.
2 votes Thank Flag Link Fri Oct 15, 2010
Hasn't this been beaten to death! It is a no brainer. Would you take less money for your job? It is unfortunate that blogs or questions that have real merit do not get as much attention!
2 votes Thank Flag Link Fri Oct 15, 2010
Yes, maybe, if this is a multiple offer transaction, and your offer is the cleanest, execpt for the $$$$, then, yes. I've done it and so have many others. In this market, concessions may have to be made. 50% of something is Always better than 100% on nothing
2 votes Thank Flag Link Fri Oct 15, 2010
The operative words are "it depends" and "may". This is NOT a should do, would do or could do. We're people working on 100% commission where we bear all the expenses to stay in business and have a certain level of quality of service and quality of life.

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.
2 votes Thank Flag Link Fri Oct 15, 2010
Because of the fundamental principle: Have a detailed written contract prior to entering a business relationship. Each party expects what was agreed upon at the outset. If the circumstances change significantly, then the terms can be re-negotiated.
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.
Web Reference: http://www.lchometeamsd.com
2 votes Thank Flag Link Thu Oct 14, 2010
We found a new home on our own, since we hadn't heard from our realtor...representing us for months. So we had to divulge we had a realtor or get sued. So the new home Sales Person did all the work, showing, drawing up contract, etc, and our "realtor" walks away with a cool 10,000 for showing up at closing, she couldn't make the walk thru...Really?
Flag Thu Nov 14, 2013
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