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What incentive is there for a Buyer's Agent to negotiate a lower cost?

Asked by , Sun May 13, 2007

The concept that a buyer's agent "represents me" in the search and purchase of a new home seems a bit vague. If my buyer's agent shares the commission with the selling agent, what incentive is there for my buyer's agent to negotiate a lower cost?

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8
Roberta Murp…, Agent, Carlsbad, CA
Sun May 13, 2007
mages99: You make an excellent additional point--and that is the importance of dealing with both an ethical and successful Realtor. For example, a $15,000 savings for our buyer might equate to as much as a $300 commission loss. It might be hard for you to understand this, but the "loss" of that commission is a non-issue for us. We are paid only upon the successful completion of a transaction--and that is what we do best. More importantly, our clients would agree. They know we put their interests first, and that is one reason we receive their referrals. I'm sorry, but it sounds as if you have had a bad experience with your representation. It may also be difficult for you to understand, but there are certain buyers we refuse to represent:
1 vote
Roberta Murp…, Agent, Carlsbad, CA
Sun May 13, 2007
Trulia: When negotiating a possible real estate purchase on behalf of a purchaser, commission is a non-issue, as it would have been negotiated beforehand. The incentive for us is a successful transaction where our client is ready to refer to us not only their closest friends, but family as well. That makes a world of sense to me. If we can save our buyer thousands , why should we worry about losing a few dollars? Most real estate professionals I know operate the same way. Your questions, though, are good ones for buyers to ask of a Realtor they are considering for representation!
1 vote
Sylvia Barry,…, Agent, Marin, CA
Fri Oct 3, 2008
I love to negotiate the best deals for my clients. First, I get personal satisfaction out of a job well done (I love that feeling!) and secondly, I have received 4 referrals just in the last six months because of how much my buyer clients love the deals I made for them.

Talking numbers. To put things in perspective. Taking 2.5% commission (one side) as example. Every $10,000 I negotiated for you, I am only losing 250 on commission. However, if you love the house I found and the price I negotiated for you and start referring clients to me and decide to use me again later, guess how much more commission I can receive - a lot more than the $250 I might lose.

So, yes, it's to my best interest to negotiate a best deal for you, for personal pride, relationship building, and future business growth. Looking for a short term gain is never my priority!

Best,
Sylvia Barry
Marin Realtor
0 votes
David Drayer, Agent, Austin, TX
Fri Oct 3, 2008
Having a great Realtor who knows and understands his clients needs will make for a great outcome. Being represented by a sucessful Realtor will deffinately get you a better deal and a smooth transaction.
0 votes
Keith Sorem, Agent, Glendale, CA
Fri Oct 3, 2008
Trulia (like the name)
You are missing the point.
Business in America is done "by referral". Either you earn referrals or you can pay for referrals.

For most of us on Trulia real estate is not job, it is a passion. We know, most of us, that left to chance, most people in real estate transactions will not "do as well" as if they have us as advocates.

There are many transactions that we affect that save buyers thousands of dollars...but they will never be on the evening news. I am puzzled.

If you are serious about buying a home, I will provide you with a REaltor whom you can interview, no obligation, and see if they can articulate the value of a great buyer's agent.
0 votes
Steve Kappre, , Gloucester County, NJ
Fri Oct 3, 2008
Vicki I like your answer - I'd don't know about you but I'd rather negotiate a killer deal and have a raving fan, than make an extra $100. Get a handful of clients like that and you have a booming business and a "team" out on the streets working for you!!
0 votes
Vicki Moore, Agent, San Carlos, CA
Sat May 19, 2007
The best way for a Realtor to grow their business is by referral. If the buyer feels they paid too much for the home, they're going to blame the Realtor. Thus no referrals.
0 votes
Mages99, , New York, NY
Sun May 13, 2007
Roberta, what a fantastic non-answer. The real estate industry is riddled with conflicts of interest. Of course it makes sense for the buyers agent to get the highest price possible from their buyer. Yes, the commission is negotiated before hand, but is absolutely an issue as the commission is a percentage of the purchase price. Therefore, why wouldn't a buyers' broker want to increase the purchase price to increase their commission? That said, a buyers' agent is useful, even if they are getting paid by the buyer, to deal with the sellers' agent and all the nonsense that goes on.
0 votes
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