We are working with a realtor , but we found a house on our own. Do they have to pay our realtor 3% even if he was not the one who found the house?

Asked by Shade47, Poway Sun Apr 8, 2012

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Mack McCoy’s answer
Mack McCoy, Agent, Seattle, WA
Mon Apr 9, 2012
If you do not have a signed commission agreement with this agent, then, no,

However - they do get to keep the entire commission.

Here's how it works: Listing agent contracts with seller; "You pay my brokerage if we find you a buyer. If the buyer comes from another agent, we'll share the commission with that, otherwise, it's ours."

If only you could find houses on your own, Shade47. We, as an industry, have spent hundreds of millions of dollars to make the information so available that you can access it from your boss's computer, from your smartphone . . . we even put signs up in front of the house and set arrows on the corners pointing to it! You didn't find it "on your own," the listing agent figured out a way to get the information in front of you, and they are contractually entitled to not share the commission.
0 votes
, ,
Mon Apr 9, 2012
The question is actually:

1.) Should I go straight to the listing agent or should I be loyal to my agent?

The answer to that question has to be answered by you. I can't you how hard some agent work for their clients. As a lender, my job although difficult is rather straight forward. But these poor agents, especially in these times are having to work 4 times harder, show 4 times as many homes, and have far less chance at getting their offer accepted today because of all the investors out there and the inventory of homes is so few.

If you feel your agent has been dedicated and hard working, you can reward them with your loyalty by giving them the address to follow up on the property. If you feel your agent has not represented you well, then by all means go straight to the listing agent and make your offer. But make sure you didn't sign a Buyer/Broker Agreement locking in for a specific amount of time.

Best of Luck!
2 votes
Lance King, Agent, San Francisco, CA
Mon Apr 9, 2012
I have a little different take on this. With public access to the MLS, finding properties is easy. The real skill comes in once a target property is identified. A great agent/broker can help position your offer in a competitive situation to get yours accepted, help avoid problem properties, and find out the seller's position on need to sell and equity position to help negotiate the best deal that can be had.

Also, you need to know that the seller agrees to pay a certain commission to the listing agent at the beginning, and they pay the buyer's broker from their share so they are not likely to knock the buyer's commission off the price, and more importantly most sellers and listing agents don't want to deal with unagented buyers because those deals are far less likely to close.

If you don't have confidence in your agent's skills to negotiate that is another matter, but if you do take advantage.

Best Regards,

Lance King/Owner-Managing Broker
DRE# 01384425
1 vote
Zelda Kohn, Agent, Pleasanton, CA
Mon Apr 9, 2012
There is more to a real estate transaction that meets the eye and there is a reason Realtors gets paid commissions, as defined in a listing contract. There are many steps at which a transaction can fail. Finding the house is only the 1st one and, often, is the easiest to succeed at. It is hard, if not impossible, to correctly estimate the work and risks involved in something you do not do for a living, so I would strongly suggest to work with experienced Realtor representing you, not the seller, on any real estate transaction.

Unfortunately, there are people who think buying the house w/o buyer's agent "saves" them money on comissons. Rarely, one can get lucky this way. In most cases, I've seen, that is far from the truth. Unidentified risks and mishandled transaction can cost you more than you are trying to save!
1 vote
George Lewman, Agent, Englewood, CO
Mon Apr 9, 2012
The Realtor does more than find a home for you and set showings. They coordinate all of the closing information, represent you with inspectors, appraisers, Title Companies and importantly negotiate the offer on your behalf. Should you attempt to do these things on your own, you are acting as your own agent and that may put you at a disadvantage with the Listing Agent.

When I am working with Buyers, I equip them with many search tools, market analysis, and leads as approximately 90% of buyers find the homes they want to look at online. They narrow the list from the comfort of their home and then bring me in to set the showing and then do the heavy lifting of getting the transaction closed. Many have me show them 10's if not close to 100's of homes before they decide or get lucky enough to actually land one.

Finally, most likely you are under a buyers committment contract that obligates you to pay the broker/agent/Realtor for the amount of time you agreed to in finding a home. If you are in that timeframe, and do not compensate the agreed amount, you would be in breach of that contract.

Buyers Agents do more than show houses. It is a small percentage of the time I spend on a transaction. Use the broker to negotiate the deal for you and be happy that you find a home you like.

Call me or see my blog at http://www.georgelewman.com
1 vote
Richard Grah…, Agent, Limerick, PA
Mon Apr 9, 2012
Hello Shade47,
Yes, if you have a buyers agreement they may have to pay the 3%. However, I think that finding the property is the fun part of looking for a home. It is the time for agent and client to get to know each other and identify the needs and desires. The real work comes after the house is found like negotiating price, making sure all deadlines are met, processing all required documents, scheduling inspections and apprasials and then negotiating the results. You should know in that introduction phase if you are working with a qualified realtor and can discuss commission then.
1 vote
Terry Hammill, , California
Mon Apr 9, 2012
There are many reasons to use a Real Estate Agent to buy a house. Finding a home that fits the client is becoming less of an issue than it was 20 years ago. With the availability of searching for homes on websites like Trulia.com, many homeowners are finding properties on their own.

Although it may be tempting to save the 3% in commission fees and rely on the selling agent to provide you with the needed fiduciary responsibilities, this could be a disaster. Unless you fully understand the transaction process and the laws surrounding real estate, I would strongly advise you to use an agent.

Remember that behind your agent is a strong network of people who are working on your deal. They are the ones that are making sure you get the best possible deal and protecting you from legal issues.
1 vote
Nicole Ragan, Agent, Carlsbad, CA
Sun Apr 8, 2012
I absolutely believe you should work with the realtor who has been working with you, she/he is there for your best interest and a trained professional . The 3% is a small amount to pay for a piece of mind in which could later result in more monies being spent but not taking the proper steps in your home purchase. The advice given to you by these Realltors/Brokers is spot on, with exception to one persons' response. Good luck! N.Ragan
Realtor /San Diego
1 vote
John Souerbry, Agent, Fairfield, CA
Sun Apr 8, 2012
Absolutely not. Unless you've signed a contract saying you owe an agent a commission no mattter what property you buy (a "realtor" is not an agent), then you are free to buy any property you want without using an agent and without paying an agent's fee.
Should you buy without an agent representing you? I don't recommend it. It's complicated stuff.
1 vote
Carol Perdew, Agent, Manteca, CA
Sun Apr 8, 2012

The benefit of buyer representation is the dedication of a buyer’s agent to the home buyer. The buyer’s agent and homebuyer establish a mutual agreement, known as a buyer agency agreement, which will entitle the homebuyer to, but is not limited by:

Loyalty: The real estate agent must act in the best interest of the buyer.

Confidentiality: Any discussions, facts, or information that should not be revealed to others but does not include responsibility of fairness and honesty in dealings with all parties.

Reasonable Skill and Care: Arriving at a reasonable purchase price and advising the buyer of such, affirmatively discovering material facts and disclosing them to the buyer, investigating the material facts related to the sale. With a buyer agency, the interests of the homebuyer will be represented in the purchase of the home.

Carol Perdew
Prudential California Realty
(209) 239-7979
DRE 985176
1 vote
Sinead McAll…, Agent, Oceanside, CA
Sun Apr 8, 2012
Hi Shade,
I guess it would be defined by what "working with a realtor" means to you. Have they shown you homes already?
First of all if you signed an agreement with the realtor, you are bound by the terms of that agreement.

If not, it boils down to this: If your Realtor is good at what they do, they will be an invaluable asset in the purchase of your home. Being a Realtor is not just about finding a house, it's about representing the buyer and their interests in a very costly and detailed transaction. If they have invested time and effort into finding you a home and you just happened to find one on your own, it would be both rude and foolish to cut them out. Typically when a seller goes to sell their home they agree to pay the listing agent a certain percent. The listing agent then agrees to offer some of that amount to the selling agent. So the only person you are potentially saving money for is the seller (and you may not even be doing that as it could just increase the listing agent's commission, giving no savings to anyone, but depriving you of impartial advocacy)

Sinead McAllister
McAllister Homes Real Estate
1 vote
Cuttt, Home Buyer, Poway, CA
Wed Oct 11, 2017
think about your pocket. You found the house, you did not need help. You can give your agent a gift for the work they have done if any. It's all up to you.
0 votes
Cuttt, Home Buyer, Poway, CA
Wed Oct 11, 2017
of course all the agents here say its better to buy with an agent. Not true. It's more costly in the end. I have bought and sold many houses without agents and no problems and I saved lots of $$$$$. Think about your pocket first. If your able to buy on your own do it. If you dont have time then do take an agent and its normal that you will have to pay more because that agent needs to be paid.
0 votes
Hoopinken24, Home Buyer, New York, NY
Fri Sep 1, 2017
I found my property and I'm currently in Escrow now. I asked my agent if he can give me agent credit on a house that's costing me 425k. How much of a credit should my agent offer me or do I deserve a credit?
0 votes
Riverroadret…, Home Buyer, New York, NY
Tue Aug 22, 2017
after a realtor showed me a property she had listed, I found out the house is not built on her sellers listed property but actually is built on the neighbor's property. After much back and forth,denying the obvious fact, that is is clearly on the adjacent property (not his), she brought an offer from another interested party and the seller has accepted the offer. Is the realtor wrong? What could happen to the poor person who unknowingly bought this?
0 votes
Richard Grah…, Agent, Limerick, PA
Thu Aug 9, 2012
I've always looked at finding a home as the fun part of getting to know your client and their needs. With Google, Zillow, Tulia or homes.com anyone can find a home. The real work comes in protecting your client’s interest. This would include negotiating the price and making sure the AOS was in order in terms of dates and deadlines. Also, keeping track of the inspections and possible re-negotiations and commitment dates. There are some areas where a buyer can get in a real bind and knowing that you have an agent that can protect you from those pitfalls can be worth all of the commission that the seller is paying.
0 votes
Terry Farnsw…, Agent, Lisle, IL
Thu Aug 9, 2012

I'll cut to what you are probably really trying to ascertain. You are probably thinking that if you can somehow "cut" your buyer's agent out of the deal, you can get the 3% that they would have been paid.....deducted from your sales price.

If you walked in the property with the agent, and it's listed by a licensed broker......regardless if you found it or not, they are going to come after the listing agent for the commission. And they will most likely win.

Now let's say for sake of argument, that you walked into an open house by yourself and struck a deal with the owners. The listing agent will either A. get all of the commission (what he/she charges, AND what would have been paid out), or B. the owners will simply keep the 3% themselves - not "concede" it to the buyers through a lower sales price simply because they figured on paying it anyway.

Then again - it never hurts to ask...

The bottom line is - if your agent set the appointment and took you through the home, they have a case for "procuring cause", and will likely get the co-op commission advertised....

Hope this helps!
0 votes
Isaac Bensus…, , 92037
Thu Aug 9, 2012
Maybe I am imagining it. By the way you formulate your question, it gives me the impression that you do not have a good relationship with your Realtor and you do not feel he should be compensated with a big commission if he did not find you the home. If that is the case then it might be a matter of trust. You need to trust your Realtor in every possible way. You need to know he will represent you inteligently and diligently.

On the other hand, if it is a new relationship I would ask myself, how many homes did he show us, do we think he is smart and diligent. Did he follow our instructions. Was he professional. If you answered yes to all these questions then, you need to include him in your transaction because after finding the home you need to go through dozens of procedures; besides, the Sellers usually pay the Realtor's commissions so it will not cost you. Negotiating the purchase, advising you on your loan, having a home inspection, negotiating repairs, etc. etc. etc. until you close the deal and become the new owner of record takes a lot of work.

Oherwise, if you did not sign a Buyer's Broker Agreement and you are not happy with his performance and you don't think he is knowledgeable and that he will represent your interests and nothing else, you are free to look for another agent to represent you because you will definitely need one.

Good luck

Isaac Bensussen
0 votes
Barbara J Ha…, Agent, Bella Vista, AR
Sat Jun 30, 2012
First of all, the buyer doen't pay the commission and in all likelihood if you go to the listing agent directly they will get 6% instead of 3%. Often times the listing agent is the seller's agent and you could end up not having any representation. Also there is much more to the buying process than finding the home. If this is your first rodeo you need someone to lead you by the hand through the maze of escrows, appraisals, home inspections, credit repair and approval, just to name a few of the things that you will face. With the market the way it is now you need someone who knows the ropes and can lead you through this. Good luck in your search.
0 votes
Jay Becker S…, Agent, La Jolla, CA
Wed Jun 13, 2012
The listing agent is generally paid 5 or 6 percent by contract with the seller, if you use a buyers agent they are paid a portion of the listing agent commission. A good buyer's agent will deliver a lot of value, guidance and impart their experience throughout the transaction, and not a penny comes out of your pocket. Often times a well negotiated purchase with an agent will actually SAVE you money, so that your total purchase is actually LESS than if you represent yourself. Also they will employ trusted inspection services and other service providers that will deliver sound due diligence. These are some things to consider beyond just finding the home and wishing to ditch your agent.
0 votes
Felix Hung, Agent, Huntington Beach, CA
Sun May 27, 2012

There are a lot of horror stories about buyers and sellers who get themselves into bad situations by not having a Realtor represent them. Did you sign a buyer broker agreement? If you did, you have a binding agreement. With that said, if the seller offers a commission usually your representation will be paid for by the seller and not yourself. Is this a For Sale By Owner? There is really not enough information here to really help you with your answer without making certain assumptions.

Opinions aside, your question is are you required to pay a commission to your Realtor right?
0 votes
Shiva, Both Buyer And Seller, La Jolla Shores, San Diego, CA
Sun May 27, 2012
I was thinking about that myself. I see that there are a lot of agents and brokers who said that "finding house" is the easiest part - you should pay for the agent to take you through more complicated stuff like "paperwork".
If i were an agent, i would do the same too - recommend myself to get paid. Now the question is should this forum also have a neutral reviewer who can see both sides of the coin?

One more question i would like to ask is that since getting a real estate agent license is reasonably easy and takes about few months - Can i get a real estate license for the state i live in and represent myself in the transaction?
0 votes
Matthew Bart…, Agent, Glendora, CA
Mon Apr 9, 2012
Hello Shade47,

It does not matter that your Agent did not find the home for you. In reality, finding you the home is the easiest part of a Realtor's job. That being said, once your Realtor whom you're currently working with writes the offer that is ultimately accepted by the Seller's they will be due a commission upon close of Escrow. The Listing Agent will place in the MLS the exact commission that is being offered to the Selling Realtor and his/her office. Based on your question, you have mentioned 3% as the commission amount. Once again, it matters who writes the offer that is ultimately accepted, not who showed you the home. Good luck!

Warmest Regards,

0 votes
Linda Landry, Agent, Tucson, AZ
Mon Apr 9, 2012
Linda Landry, Agent, 85715
Shade47; A REALTOR representing your side of the transaction is in your best interest even if you do not have a written agreement with the agent with whom you were working. Agents love to assist in finding the right home/property. The real expertise comes with writing the contract; negotiating the price/terms; setting up the home inspections; escrow and walking the buyer through the transaction. Neither agent receives a commission until the transaction is completed and the commission is paid out of the seller's proceeds. If you rely on the listing agent you will be relying on an agent who has dual representation and whose responsibility is to represent the seller in obtaining the best outcome for them. Ethically the seller's agent will also do their best to represent the buyer and in that event will be paid that portion of the commission as well. So you see the aspect of the commission in your question is a mute point. The concern of who will best represent your interest in the transaction is the most important factor for you to consider.
0 votes • Comment • Flag • Delete • A moment ago
Linda Landry, Real Estate Pro in 85715
0 votes
Cory La Scala, Agent, San Diego, CA
Mon Apr 9, 2012
If you use the listing agent, you are going with a "dual agent." An agent that's supposed to get the highest price for the seller first. Oh - and they will get double the commission, so they'll work REALLY hard to convince you to use them. And, guess what? Buyer's agents negotiate listing prices all the time. So, what's in it for you? NOTHING. You get no one person who's working on your behalf only, negotiating for you, working to get repairs done so you move into a home with all the working parts that should be working when you live in a house. The seller's agent is trying to save them money and negotiate OUT of doing those repairs, remember? And that's just one example. You'll never ever know if this agent did the best for you - or just the seller.

And a buyer's agent costs you nothing. This is probably the biggest mistake buyers make, outside of skipping a home inspection to save $300.
0 votes
Maureen Bye…, Agent, Oceanside, CA
Mon Apr 9, 2012
Buyers or Sellers or both can and do pay our sales commissions for our Realtor Agency Buyers representation. This may or may not include finding a specific home or being a tour guide these days as much has changed. Your Realtor may or may not have found the exact property that U have selected to view or pursue as there are more resources available then our MLS online system, such as internet websites posting inventory though it may or may not be currently available and.or driving around calling every realty signs posted which may or may not be in your price range either that you can share when ur working together to realize one common goal. Whatever percentage that you pay your Realtor to represent U who is licensed professional, insured, experienced, educated, board member and business person is based upon your specific agreement providing various services and proven well worth it. Transactions are complex and competitive as well as many forms, rules, regs, laws and statues that are changing constantly. Do yourself a huge favor and use us pros to assist you with your important business. U will be happy U did.
Web Reference:  http://www.coastal.biz
0 votes
Cindy Davis, Agent, San Diego, CA
Mon Apr 9, 2012
If you are buying a home, you are not the one paying the Realtor - the seller is paying your agent. If you are using your agent to write the purchase offer, and work with you through the transaction, then they have earned their commission.

Buying a home is more than finding the actual house. There are negotiations, counter offers, disclosures, inspections, and an evluation of all that you learn about a property. A good Realtor will more than earn their keep.
0 votes
Tamara Stoebe, Agent, Lancaster, CA
Sun Apr 8, 2012
Hello Shade47,

The answer could be yes or no ....

Yes - if you signed a Broker/Buyer agreement with your agent, they may be able to claim the commission.

No - did you contact the seller's agent direct to write the contract for the purchase, and you do not have a buyer/broker agreement in place with your existing agent.

I recommend that if you like your buyer's agent - they are there to protect YOU the buyer in the transaction. Many times (but not always) the listing agent's first priority is their seller, and they will do everything they can to assist their seller complete the sale of their home, and you may not receive 100% of the guidance you should obtain as a buyer, whereas your buyer's agent is only representing you in the transaction.

I wish you th best of luck in your home purchase.

Tamara Stoebe, REALTOR/Notary
DRE License #01827461
Prudential Troth REALTORS
1801 W. Ave. K
Lancaster, CA 93534
(661) 466-6849
Fax (661) 422-3006
0 votes
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