Question Details

John, Home Buyer in 94608

I have recently come across ad's from realtors who promise upto 50% of their commission back to the buyer

Asked by John, 94608 Mon May 19, 2008

upon closing. I have been using a realtor who has shown me a few houses, one of which I like. This realtor however is willing to give only a small fraction of commission back upon closing. Can I now switch realtors and go for one thats giving back a higher percentage? If yes, can I look at the same house that I liked with this new agent? I like my agent, so its pretty unlikely that I would do it, even if it was possible, but I am just curious. In general why is there such a big difference in the portion of their commission agents give back to buyers? One obvious reason is the company they are affiliated to and its policies. But are there any other? Is this negotiable at all?

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Dear John:

The worst thing a real estate agent can do is negotiate their own worth via the commission they are potentially going to earn. You would want a real estate professional, one working on the behalf of the buyer, to go in with the knowledge of the transaction process, the knowledge of the market value of the home, and make certain you get the best deal. Period. The seller then pays the commission to all brokers (agents) involved. If an agent starts to discount their commission while acting as a buyer's agent just to get the deal done, they are probably not closing a great deal of business and put little value on their time, effort and experience. In today's market, it costs a great deal of money to be successful, and ultinately, as in anything in life, you get what you pay for.
0 votes Thank Flag Link Mon May 19, 2008
Hi John,

I work for an independant Broker in Dublin Ohio. The reason an agent can offer such a large rebate varies. If they work for a brokerage that doesn't charge the agent a large split of the commission, the agent controls more of the commission and can offer a rebate to attract buyers. Other agents are depending on a spouses income and do real estate more as a hobby than to make a living, so they can offer rebates. Others may offer a rebate as a business model to earn less for each buyer and get more business by using this attractive rebate. If you have a realtor you trust, that is worth alot!

Good luck on the home purchase!
Web Reference: http://DublinHomes.Us
0 votes Thank Flag Link Mon May 19, 2008
Everything is negotiable in the real estate transaction, including the commissions. I caution you not focus on the commission or a rebate. First, the commission is paid by the seller not the buyer. Selecting an agent to represent you as the buyer based only on a commission rebate can be a big mistake. You are assuming that all real estate agents are the same and equal. That assumption can easily cost you the amount of a rebate many times over.

Here's a great article about chosing a real estate agent to help you.

Hope this helps. Good luck to you and happy house hunting.

Elliot Lau, Realtor of 22 years
0 votes Thank Flag Link Mon May 19, 2008
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