Home Buying in Lakeview>Question Details

Trish, Home Buyer in Chicago, IL

I am planning on making an offer on a house with out an agent. How much money is this agent saving?

Asked by Trish, Chicago, IL Sat May 17, 2008

I am planning on making an offer on a home being listed by a Real Estate Agent. I do not have an agent and will not be bringing one on. How much money is this sellers agent saving by me not bringing in an agent. What do I have to negotiate with. property is listed at $569,000

I also was thinking of using the sellers agent to sell my propert as a negotiation too. What kind of commision rates do I have to negotiate with here.

I would appreciate any advice on how to negotiate all this.

Help the community by answering this question:

Answers

23
Ryan: Some of the responses below are pretty self-righteous and come from realtors who worry that the internet is making them increasingly unnecessary--especially from the buyers' point of view.

~~~~~~~~~~~
Honoring a contract has nothing to do with self righteousness or fear of being made unecessary. If the seller negotiates with me that if I bring the buyer also, I get a percent less, that's fine by me. Many sellers tell me they HOPE I get the entire 6% because I've been working so hard. Unless people enjoy having their own pocket picked, I fail to see why they want mine picked. When a buyer makes an offer, it is up to the buyer and the seller to negotiate a price. I have already negotiated my fee with the seller. It is not up to me to make up the difference between what the buyer can pay and the selling price, no more than it is up to the buyer to pay more for the house because the seller "has to get" whatever to cover their mortgage.
5 votes Thank Flag Link Wed May 21, 2008
Hey Trish,

Sorry to be so late to the forum but I have been working with both buyers and sellers ensuring that they receive the full complement of services associated with me being among the top one percent of realtors in Chicago. I mention this self-aggrandizing statistic to intimate that I have worked extraordinarily hard the past 8 years to be among the elite of my field.

Here's the deal, if you come to my listing without an agent all you ensure for yourself is that I will perform ministerial acts for you but that you will not benefit from the full range of expertise that a qualified real estate professional will provide to you.

Specific to your question how much money will you save? In a word - none. When I list a property my client, the seller, agrees to pay to me and my brokerage a commission predicated on the successful transacting of the property. We in turn have the option to provide from this commission an amount to any member of our cooperative service, the MLS, who should happen to bring forth a buyer and we execute a contract. We don't predicate a savings should a buyer like you happen along and want to transact without professional counsel.

Your question is not an unreasonable one and I only am able to speak from my experience that I don't cut commission because a buyer is unrepresented. The same question came up last night from a buyer who want to disacknowledge his realtor to gain a better deal for a luxury condo I am selling. When I explained to him how the brokerage process works and that he would not benefit with a "better" price without a realtor he re-acknowledged his realtor and her role in the transaction.

Finally, I am sure you are a very nice person and you have discerned a goodly amount in your search alone for a new home. However to me you as an unrepresented buyer represent even more work from my already tremendously full schedule because you do not have a realtor representing you. Aside from the listing contract, a binding legal agreement that stipulates the commission rate (which precedes your arrival), I don't perceive as sensible the prospect of "giving" you money for what promises to be a more arduous transaction process for me and my team.

Best of luck hunting alone.

Tom McCarey
The Real Estate Lounge Chicago
@properties
4 votes Thank Flag Link Tue May 20, 2008
Great point Michael....but then, where else are they going to get FREE advice!!
3 votes Thank Flag Link Tue May 27, 2008
I'm not sure what you mean by how much is the agent saving? The seller has previously agreed to the commission to be paid. Normally, if you do not choose to have representation, that is your choice and your loss. It sounds as if you are trying to do things that you know nothing about. This could cause a serious legal problem for you. It would be best if you let the professionals handle all, and don't worry about what the seller is paying, prevoiusly agreed on. And let the professional list your property for whatever the charge is to be paid at closing and funding.
3 votes Thank Flag Link Tue May 20, 2008
Thanks Betina for explaining again that he does apparently need a Realtor.

Also, if you are not going in with an agent then usually the Listing agent takes the entire commission. There are no cuts or discounts so YOU are not saving a dime.

I would advise you talk to a few agents in your area and select the one that you feel most comfortable with and get the home you want.

Good luck!
2 votes Thank Flag Link Tue Oct 14, 2008
Dear Trish,
If you are here asking Realtors for advice, then you need to realize that you really do need a Realtor on your side. We negoitate deals all the time and civilians don't. Get an agent that you can work with. They will make sure everything is done by the book and that your rights and interests are preserved.

Looking for homes online is fine, but offers and contracts are complex and should be left to people who deal with them everyday. I realize you may not like my answer, but you need a pro that can walk you through this complicated process.

In Texas all commissions are paid for by the Seller so having representation costs you ZERO! Would you go to court without a lawyer? Probably not. This is the same type of situation. Get someone to fight for YOU, don't let that listing agent walk all over you.

Also I don't know that I would necessarily list my home with them, afterall what have they done for you? Will he give you a discount to list your home for sale? How effectively will they market my home?

I would find someone that specializes in the neighborhood. Drive around and look at the for sale signs by your house and call them and ask lots of questions. With any luck you will find a reputable agent that can help you sell your home for the right price. Or ask your friends and family for a referral. They may know a good agent that can help you. If they don't call me and I can give you a referral to a good Chicago agent. Just make sure to let me know what neighborhood we are talking about.
Good luck!

Betina Foreman, Realtor Austin Texas
2 votes Thank Flag Link Mon Oct 13, 2008
Just the fact that you are online asking real estate pros to to negotiate this tells me that you need to be working or at least consulting with an agent....probably more than most people out there. I can't add anyting aside from what has been said. The only thing I'll reiterate is that the comission is established between seller and agent prior to going on the market. Also, showing properties and educating you on areas is a small aspect of what we do......just as it is for you, looking at properties is the fun part of our job. It is what happens after you have found the place that I always say that I "earn my keep." Finding a place is the half way point....there is still a lot of work to be done.

As far as being made unecessary by these websites......Bring it On! Trulia does an excellent job allowing us to converse and pass along free advice but taking away from what I can do to help sell/buy....not a chance. If I really thought Trulia or Zillow was a threat to my profession I wouldn't be on here helping make the website better. And Zillow's "Zestimates???" Just more proof that us Realtors are necessary for the time being.

Good Luck with the offer. At the end of the day we all want you to get the place and hope everything works out for you.
2 votes Thank Flag Link Tue May 27, 2008
Why is there so much animosity towards Realtors? It's just like a doctor or specialist, if you don't like what they have to say get second opinion. No one is bound to just one Realtor.
2 votes Thank Flag Link Wed May 21, 2008
LOL yeah good luck with buysiderealty.com bwaaahaaaaaaahaaaaaa. You'll see what I mean.
2 votes Thank Flag Link Wed May 21, 2008
Trish, I can only speak from personal experience, but I was going to buy a home in Chicago this spring, I also did it without an agent, and the selling agent/seller agreed to reduce the final purchase price by the 2.5% that the seller would have otherwise given to the buyer's agent. Some of the responses below are pretty self-righteous and come from realtors who worry that the internet is making them increasingly unnecessary--especially from the buyers' point of view. If you're internet-savvy and smart, you can get to know your market of interest as well as any Realtor by visiting websites such as this. If you are able to negotiate, a Realtor is also unnecessary for this. There are lots of other technical aspects of the purchase to work out, but you can take care of this by hiring a lawyer to handle the transaction (probably around $500 for the whole transaction).

Don't believe anyone who tells you "no one is saving anything"--the bottom line is that if you had an agent, that agent would be getting at least $12,000 for their services--this money DOES go somewhere when it isn't spent, and chances are, the selling agent pockets it.

If you've already found the house you want, I'd consider buying it through buysiderealty.com . That website gives you back a refund of 2% of the sales price if it receives 2.5% as your "agent."
2 votes Thank Flag Link Tue May 20, 2008
If you do not know these answers already, I would suggest talking to or hiring a Real Estate professional...
2 votes Thank Flag Link Tue May 20, 2008
First of all, Trish, in my opinion, if you go in without an agent and make this offer, you will not have representation. I strongly suggest getting your own buyer's agent to put the agreement together and look out for your interests. I am a mortgage lender and have seen some people get into trouble by not having a professional real estate agent. Real Estate professionals do a lot more than most people think. For instance, do you know how to complete a Purchase Agreement?---How about contingencies? What is the home doesn't appraise? Occupancy? Home Inspections? Just my opinion. Kathy Borucki
2 votes Thank Flag Link Mon May 19, 2008
Trish, question 1. The only person who can answer this question is the listing agent/broker and the seller. Everybody else’s response is a guess at best. So, if your plan is to negotiate directly with the agent and seller, choosing not to have professional/realtor representation then any response outside of general practices for your local, state and NAR policy would not be a very responsible action by any Realtor.
Question 2, is a stand alone matter/transaction (and/or I could be making an incorrect assumption) from your attempt to purchase the subject property. If the listing agent involved is in a position to offer variable commissions on her/his listings or commonly gives multiple transaction clients reduced commissions, then you might see an advantage by listing with that agent.
Trish, by stating that ' I do not have an agent and will not be bringing one on." you basically shut the door on anyone of us approaching you with more then very general advice. You are establishing a "Customer" relationship (not that this type of forum can do more then that) but you are asking "Client" questions. Believe me, I am 100% ok with duel agency and see many advantages to it for both parties.
Question 3, if you want Realtor advice, you need to retain one (either the listing agent, one of the fine folks on this string or ask a friend for a referral.) Think of it this way - what if I give you all the info you were looking for over this blog based on your questions and even something’s you more then likely are unaware of, and later today I have a "client" who also becomes interested in the same property. See the issue I just caused myself and how I failed my real “client".
The only way to get trusted advice is to create a relationship in which “trust” is a key component.
2 votes Thank Flag Link Sun May 18, 2008
Going in without an agent means that you have no one working in your best interests - and many seller's agents will be hard pressed to rebate any commission to you. No agent means they have to do double work to get the deal to closing.

Commissions are negotiable between seller and agent... But there are varying levels of service that different realtors provide -- I would pick my agent based on how well they are going to market my house to bring the buyers in, not how much $ I can save on commission.
2 votes Thank Flag Link Sun May 18, 2008
Making an offer without an agent does not strengthen your position. The listing agreement between the seller and the listing agent is already written...already agreed to. What you might want, what you might propose, will have absolutely no effect whatsoever on that agreement.

What do you have to negotiate with? First, any negotiating skills you may have? Second, hopefully, a knowledge of the comps. I'm not sure how you plan on getting them without an agent. You can try Zillow, but I--and a lot of others here--will caution you that Zillow isn't particularly accurate.

As for using the seller's agent to sell your property: That's fine if you think the seller's agent is competent, knowledgeable, and professional. And if there's a good relationship between the two of you. And perhaps the seller's agent would reduce his/her commission if you were involved in two transactions. But that's in the future. There's nothing you can do about whatever commission the agent and the seller have agreed to on this transaction.

You're asking for "any advice on how to negotiate all this," but it sounds as if you've already decided on your negotiating strategy: Go in without anyone representing you and assume that this will somehow appeal to the seller's agent. That's not the course I'd recommend.

One quick tip: Remember--the seller's agent is only an agent representing the seller. If you're trying to negotiate the price of the house down, whether or not you're using your own agent, the person you must negotiate with and appeal to is the seller. Find out what the seller's needs and motivations are. Put yourself in the seller's shoes. Offer a solution that works not only for you, but also the seller. It could be price...it could be terms...it probably is both. But in any case, shift your negotiating focus from the agent to the seller.
2 votes Thank Flag Link Sat May 17, 2008
Don Tepper, Real Estate Pro in Burke, VA
MVP'08
Contact
Hi, Trish! The listing agent of the home you are interested in likely has a commission schedule (it's reasonable to assume it's between 5-6% of the sale price) in place with the seller. If that agent is going to act as a fully authorized "dual agent" then they will simply receive the fee without having to "share" with a co-operating buyer's agent. Ultimately, what should be at the forefront of your mind is that you are getting the best representation possible to ensure that you will be paying no more than a fair market value for the home - in other words, that you are actually getting the best possible price for that home. When you ask what you have "to negotiate with" my advice would be to make sure your negotiations are based primarily on the market data surrounding the value of the home itself - and include the commission question as secondary. After all, what good would it be to get a little knocked off the commission if you wind up overpaying for the home? You could be setting yourself up for that type of scenario by not using an agent on your side - so "caveat emptor" (let the buyer beware!). Equally so for using that agent for selling your home. I say that only because as a seller in this market, it would be advantageous to do some homework and interview a few different agents to really determine who's going to be the best person to help you reach your goals. In closing, a good buyer's agent will MORE than validate their commission received by ensuring that you have gotten the best possible price for that home, quite possibly a better price than you may be able to negotiate on your own - which would mean that you're still coming out ahead! Good luck to you!
Web Reference: http://www.MyCondoTown.com
2 votes Thank Flag Link Sat May 17, 2008
Mr Phelan provides you good advice...the questions you are asking and your emphasis on wringing the agents for all they are worth put you at a disadvantage. The notion of buyer's agency has been with the Real Estate industry long enough to prove it has merit- if it did not result in better money to the buyer then it would have, as a concept, been nipped in the bud by market forces long ago. You will save more by using a buyer's agent and will not have to trust that the dual agent capacity/expertise/fairness of the listing (selling) agent is going to help you. That agent might have to forgo a side in this transaction but that is not your concern. Your concern is to find an experienced and honorable buyer agent that can negotiate hard for you. Negotiation in home sales only comes through experience...you can't get it by book knowledge or hope that you can wing it.
1 vote Thank Flag Link Sat May 17, 2008
The seller signed a listing agreement (or contract) The commission amount is already agreed upon. You not having an agent may not save the seller anything. The listing agent will get the commission for both sides of the transaction. Occasionally Brokers will offer a lower commission on the Listing agreement if there are no other agents involved usually 1 to as much as 1.5% lower commmission, but many do not. In my experience sellers see that as their savings and are not willing to give it away to the Buyer. The sellers already know their bottom line. Chances are you will not get the home for less than the figure they have as their bottom line price. If their bottom line price is $560K That amount is fixed and frozen in their heads. They tend to forget that they are walking away with $5k or $7K more due to a lower commission . Occasionally a seller will reduce the price of their bottom line by an amt up to half of the commission savings but don't bet on it. It is rare.

The only one loosing anything is you the Buyer if your state recognizes Buyer Agency., You are giving up your right to have someone in your corner negotiating in your best interest.

If you have to sell your home to perform on the new home. You have no negotiating power. Especially in the current market.

The listing agent may give you a break on your listing but that will not affect the commission the Seller already agreed upon on the home you want.

You will get a better price break by getting your own agent and asking them to take a lower commission on listing your home if you allow them to represent you on the purchase of the new home. If the sale is contingent upon your home selling, It is better to have it listed with someone before you try to negotiate purchasing another home.

Besides choosing the right agent to sell your home requires a lot of homework on your part. You will want someone familiar with your area and who offers superb marketing skills. This will save you more money in the end.

Cathy Sloan
RE/MAX SPECIALISTS
Jacksonville, Florida
Web Reference: http://www.cathysloan.com
1 vote Thank Flag Link Sat May 17, 2008
For example:

The listing agent enters into an agreement with the seller to sell the home for a 5% commission. If a buyer brings his agent along, the seller pays the 5% commission to the listing agent, who then pays half of that to the buyer's agent . If the buyer does not bring an agent along, the listing agent still gets the entire 5%. The contract has already been signed by the seller that they'll pay 5% to the listing agent.

In rare cases, the listing agent may agree to reduce their 5% commission to, say, 4% or so when they are taking on both sides of the deal. But this is NOT always the case and in fact many brokers have a policy that will not allow this to be done. Keep in mind that when the listing agent is handling both the seller and buyer side of the deal, they are doing twice the work! Therefore they usually require twice the compensation.

Good luck but I do always recommend that you use a buyer's agent when purchasing - it doesn't cost you anything out of pocket. What you THINK you may be saving (assuming the listing agent reduces their commission) is easily recouped by a using a buyer's agent who is a strong negotiator and can get you an even lower price.
0 votes Thank Flag Link Wed Jun 24, 2009
I am an agent and love the people who think they do not need anyone to represent them. First and foremost I was hired by the sellers. I work for them! That 2.5% someone talked about was probably presented to them in that way, but I assure you it came off of the price. An agent would have been negotiated for more. BUT what ever works for you is the correct way, Good luck
0 votes Thank Flag Link Sat Apr 18, 2009
Trish

It seems that most of us agents agree that your plan will more than likely not save you anything and may cost you more in the end.

I can offer this advice. It seems that your state allows an agent representing a principal in the transaciton to give the principal a commision rebate. If you want to be assured to get some savings solicit an agent to give you half of the commission they earn from this sale as a client rebate. You may get one of the 100% concept realtors to do this for you and still get Buyer Representation. RE/MAX, Centry 21, Keller Williams agents keep a larger portion of the commission and share less with their Brokers. If they earn 3% you will get approximately 1.5%
Web Reference: http://www.cathysloan.com
0 votes Thank Flag Link Sat May 17, 2008
How much money is this sellers agent saving by me not bringing in an agent.
~~~~~~~~~~~
None. The commission is negotiated between the agent and the seller. The negotiations for the sale are between you and the seller. The seller knows up front the listing agent may bring the buyer and knows if they do, they will pay the commission entirely to the listing agent.




I also was thinking of using the sellers agent to sell my propert as a negotiation too. What kind of commision rates do I have to negotiate with here.
~~~~~~~~~~~~~~
All commissions are negotiable. Here is where you can negotiate. Perhaps they will give you a percent off to list your home with them. Be prepared to pay the entire commission to your listing agent, however, if they bring a buyer unless you negotiate less up front. Personally, if I already negotiate a lower commission to list I'm not going to give up more if I have both sides.
0 votes Thank Flag Link Sat May 17, 2008
I don't think the agent is saving much, if anything. That agent is entering into a dual agency role, which is not always a good place to be. It is very difficult to represent your interests and the owner's interests at the same time. Many agents won't accept such an agreement.
There are no set fees or "standard" commission amounts. Make a proposal and see if it accepted.
I have offered discounts to repeat clients of 1% to 1 1/2% (from a 6% listing) for a repeat sale.
0 votes Thank Flag Link Sat May 17, 2008
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2016 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer