What's the standard for buyers rebate from agent in Danville area?

Asked by Dbuyer, Danville, CA Sat Dec 4, 2010

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17
DRE #00960101…, Agent, Danville, VA
Sat Dec 4, 2010
I've been in the business of helping buyers and sellers for 25 years in the Danville area, and have never had a buyer ask such a thing? I would venture that this question stems from the misconception that representation by a good agent is not that valuable. In truth, a good agent will enrich his/her client with much more than any "rebate" could provide!!. My advice: look for an agent who knows the area, is "connected " within the real estate community, who understands and listens to your needs, and who will go that "extra mile" for you! THAT, my friend, is where you should be focusing.
2 votes
Dbuyer, Home Buyer, Danville, CA
Sat Dec 4, 2010
Thank you so much for all your great answers. I have a very balanced view on the rebate now. Frankly, "Buyer's reabte " is not a criteria for me to select an agent. However, a potential agent brought this up during our conversations and I wanted to check if his offering is reasonable compare to typical rabate provided by other agents. Unfortunately, I had a bad experience with an agent last time I bought a house and it was over very little amount of money. I was really surpried by her unprofessional behavior towards the end of the deal during the closing week but you live and learn. She didn't care about the client realtionship at all and her real self came out towards the end of the process. It almost felt like she was working for the seller not me.She put all the pressure on me instead of negotiating on my behalf with the seller on few samll issues. Basiclaly, did not look after my interest...I couldn't or didn't want to change the agent on 11th hour..actually it will be good to know what are my options if this happens again not that I am going to pick another agent like that again :)
1 vote
Carolyn Zeig…, , Danville, CA
Sat Dec 4, 2010
This is a question you should ask in your initial interview of the agent. I have been a full time licensed realtor since 1985 and during my first fifteen years in the business, no one asked for a rebate! It has just been in the last ten years that some Buyers have been doing this. Most Buyers believe that we earn our commission with our negotiating skills, knowledge of the area, contractor referrals, availability for consultations, staging efforts, listening to our clients needs and then fulfillng them! I believe that "you get what you pay for" in any endeavor.
1 vote
Isabelle M.J.…, , Danville, CA
Sat Dec 4, 2010
Hello Dbuyer,

I can't answer for other agents, but my answer has always been.....none. I pride myself in exceptional negotiations for my Buyers. Whethere it be a Seller credit, repairs, or purchase price adjustments. Hiring a solid agent who is competent and confident in their abilities will far outway any sort of Agent credit back you will receive. Agents who work with real estate firms and whom advertise credits are usually newer agents who lack the experience in strong negotiations.

Example: I just had a client close escrow on a home last week. I negotiated a $10,000 credit in closing costs and an additional $15,000 toward repairs. The original repair bids came in at $50,000. I was then able to have my contractors bid on the repairs, and in the end saved my client an additonal $23,000 in repairs. His out of pocket for $50,000 in repairs came to $3,000. That is on top of the price redution I helped secure.

Just keep that in mind when shopping for your agent.

Best of luck.
Isabelle
1 vote
Joanna Jensen, Other Pro, Livermore, CA
Tue Apr 26, 2011
Hi,

Commissions are not customary.

They are however negotiable.

Honestly you do not want to pick an agent simply becuase of the rebate they will give you.

There are additionals concerns.

Example: Good questions to ask

1: does the buyers agent pull all listings that match my criteria or only full priced ones?
2: Will you show every home in my price range or only the higher priced ones?

When we bought our home in Pleasanton 10 years ago I was not an agent. We thought the same way you are now and wanted to get a rebate. However, I realize now that Im an agent our realtor didnt help us at all!!

We bought a home with a spa that doenst work and has never worked.
We bought a home that has had water damage, the realtor should have found this out

some things are not worth going with the lowest commission.

What realtors are paid to do:

find the home you want
negotiate price and terms for you.

almost every thing is negotiable. However getting a greedy agent who doesnt do their job is not worth the temporary rebate. You ll forget that in 5 years you wont forget buying an overpriced home or a damaged home that should have been picked up on!!

this is not something I say before I tell you my commission is 7% either!!!

JoAnna Jensen
Legal Assistant / Realtor
Volo law
0 votes
Will Bateson, Agent, Livermore, CA
Tue Dec 14, 2010
Yes, it's true that it's more important to find a great agent who is a seasoned negotiator than it is to find one willing to give you a buyers rebate. However, the two are not mutually exclusive. There are lots of different options out there. If you'd like to see my rebate policy (I earn a fair commission, and rebate the rest back to my clients), go to http://www.sidewalkhomes.com and click on the 'Sidewalk Advantage' button in the upper left hand corner. Good luck!

Will Bateson, Broker
Sidewalk Homes
925-455-0845
will@sidewalkhomes.com
Web Reference:  http://www.sidewalkhomes.com
0 votes
Charles Husen, , Pleasant Hill, CA
Wed Dec 8, 2010
Thank you for helping to bring sanity to the housing market. Negotiating the fair price of a commission is one of the steps that will bring us out of our current bubble mentality.

The California Department of Real Estate allows real estate agents to charge a fee instead of a commission now. Hopefully a fee based system will be used more and more in the future. This will give the buyer a much better opportunity to control their prices.

Since we don't have advertised fee based pricing yet, you are attempting to do the next best thing. You are asking for a rebate. This is good but I just want you to do me a favor. Don't sign an "exclusive" buyer's agency agreement from a real estate agent that will promise to give you a rebate.

As a buyer you do not want to get tied to a real estate agent. It elimates many, many possibilities. So to sign an exclusive agency contract to get a good price on a commission could be penny wise and pound foolish.

If the agent does not want to sign a "non exclusive" agency agreement then they are not for you. You are too smart.

There are many hungry agents out there that would be happy to help you without the guarantee of a commission. In my case, I only want to be paid if I can create value for my client.

Thanks again for demanding value in the marketplace. You just need to be smart about it.

Take Care,

Charlie Husen
Tax Home Realty
Pleasant Hill, CA 94523

)925) 482-7891
Web Reference:  http://www.incometaxhome.com
0 votes
Deborah Spae…, Agent, Danville, CA
Mon Dec 6, 2010
It is customary to charge 6% from the seller. This pays each agent 3 percent.
It cost Agents thousands of dollars each month to be a reputable,professional quality Agents. We dont make that entire 3%.
All companies takes a percentage, another 6% of the 3% goes for dues that are called something different within each co. Hugh costs are necassary to E & O insurance, Real Estate board has an annual fee,Mls membership annual fee, constant education, Advertizing, marketing, Web Site & maintenance etc. It cost us approximately 30% of our gross icome to service our clients properly & maintain our profession.
0 votes
Marston Myers, , Brandon, FL
Sun Dec 5, 2010
I remember watching the "reality" TV show set in LA (Million Dollar Listings or something) and one day literally screaming at the TV because the two agents let over $90K in commissions collapse because they refused to pick up less than $2K in repairs (that would be $1K each) that the Sellers and Buyers deadlocked over. UnFreakingBelievable! A raving fan is worth their weight in Gold. Picking up last minute costs that have become a problem is simply GOOD business.

Dbuyer, you are right that a rebate alone should never be a primary criteria (with anything) but just part of the "package".

All the best!

Marston Myers - Broker
Area Pro Realty - People's Choice
925-262-8128
Web Reference:  http://www.aprpconline.com
0 votes
Steve Curtis, Agent, Walnut Creek, CA
Sat Dec 4, 2010
Dbuyer ... you certainly touched a hot button among the agents... and I am more than willing to step right into it. With approaching 40 years full time in the Contra Costa Real Estate Business I will freely acknowledge picking up costs and expenses that need to be picked up to move the transaction forward.

I work extremely hard to create the best professional relationship possible with my clients. My number one goal is to provide value far in excess of the "cost" to either the buyer or the seller for my effort. The relationships where the first negotiation is the value of my effort without exception have ended up being the relationships both of us value less over time... and then there are the relationships where the value of the service provided exceeds expectations ( and certainly the cost of the commission) and has resulted in a professional and personal relationship that spans 3 decades and family referrals and best friend referrals and business that even survived divorce.

Bottomline you can certainly find an agent who will give you a rebate ... and some very articulate ones have responded to your question. But if you focus on the $5000 to $10000 rebate you may well miss the opportunity to establish a relationship that will make or save you 10 or 20 times that amount over the years.

good luck

SteveCurtis
Broker / Owner
Windermere
925-408-0037
0 votes
Carolyn Zeig…, , Danville, CA
Sat Dec 4, 2010
We each have our own philosphy on this issue as you can see; therefore, it is imperative to have this discussion with the agent first. The doctor has already agreed to work for the contracted price before he performs the surgery much the same as the Multiple Listing Service states the Selling Agent's commission up front. The contract between the Seller and the Listing agent states what fee will be paid to the Selling Agent.

The purchase contract is written by the agent per instruction by the Buyer; however, the contract is between the Buyer and the Seller only. The agents are the conduit. The Buyer negotiates with the Seller not with the realtors involved. A doctor does not negotiate their fees with the "patient" but with the insurance company.

Dbuyer, my best wishes to you in your purchase!

Carolyn Zeigler
0 votes
Marston Myers, , Brandon, FL
Sat Dec 4, 2010
I rarely get into these "discussions" but do not like it when hyperbole and obfuscation take the place of logic and fact. With all due respect to my colleagues, does it not seem disingenuous to believe that the more you get paid the better job you are willing to do? Does a lawyer work harder for you based on the expected settlement or pre-agreed split or do they hold back their expertise because they are only going to make X amount on your case? Does a doctor hold back on a given procedure or work with one hand tied behind his back because he has agreed to accept what your insurance will pay? Of course not.

On an average say $700,000 home, the commission is "typically" (at 3%) $21,000 dollars. I work just as hard, have just as much knowledge, education and negotiating ability and feel that a paycheck of $14,000 is very good pay for representing my client and getting them the best possible deal while rebating back $7,000 to my client. Win, Win.

What about if you are also the listing agent, do you expect a full 6% or will you negotiate then?

If a listing is "only" offering 2.5% or even 2% (the horror) do you work any less on your Buyer clients behalf to get the best deal possible? Of course not!

Bottom Line; Demand the best agent skills and commitment AND make the best financial deal you can. All commissions are negotiable, by law, and this INCLUDES Buyers side. Do I "hire" every buyer or seller? No! So if an agent refuses to "negotiate" their Buyers side commission, when and how does the Buyer negotiate??

It is, after all, the BUYER that actually PAYS the commission by purchasing a home with the commission price built into the asking price and therefore Sellers "net". The nonsensical argument that the seller pays the commission "out of their proceeds" is merely accounting as the "proceeds" are coming from the BUYER.

In the example above, by reducing the amount of the loan by $7000.00, the fully amortized savings at 5% over the life of the loan is $13,527.00.

If you are a buyer that truly believes that "you ONLY get what you pay for" in this context then please call me and I will charge you a full percent ABOVE what anybody else is willing to do! ;))

Now that all being said, interview agents and find the best agent that matches your needs. I wish you all the best!

Marston Myers - Broker
Area Pro Realty - People's Choice
925-262-8128
Web Reference:  http://www.aprpconline.com
0 votes
Arturo Shive…, Agent, Danville, VA
Sat Dec 4, 2010
I have to give Isabelle a 'Thumbs Up' because it is true, if one is shopping for a rebate versus shopping for a really good agent, one could end up paying in the end.
0 votes
Dave Shepard, Agent, Acampo, CA
Sat Dec 4, 2010
The buyers rebate is a negotiable item between you and the Realtor. In addition to working with someone that will give you a rebate you also want to find a knowledgeable, experienced, and hard negotiator. In the past I have given clients up to a 50% rebate. It is mostly dependent upon the purchase price. Please feel free to contact me to discuss your needs and rebate.

Dave Shepard
0 votes
Marston Myers, , Brandon, FL
Sat Dec 4, 2010
There is NO standard, just as there is NO standard commission. You need to ask this question early in your agent interview process. This is dependent on a great many factors. I offer my clients 1% of the purchase price as an Buyers Commission Rebate up to $750K and 1.5% over 1 Million while giving full service to each and every Buyer.

With all due respect, RESPA does NOT prohibit agents/brokers from rebating COMMISSION back to Buyers in most circumstances. It does DOES prevent Buyers from obtaining cash back from the loan or a side deal with the seller (this is also considered lender fraud). Furthermore the rebate is not taxable to the Buyer as it is 1) part of the contract 2) only paid to the principal(s) to the transaction. It DOES reduce the "basis" of the home by the rebate amount for capital gain purposes on a future sale. This is reflected in our Buyer Commission Rebate form. There are some FHA or VA limitations on Commission Credits.

Give me a call to discuss your needs.

Marston Myers - Broker
Area Pro Realty - People's Choice
925-262-8128
Web Reference:  http://www.aprpconline.com
0 votes
Bruce Baldwin, Agent, SAN RAMON, CA
Sat Dec 4, 2010
Because the selling agent's commission vary I offer a 25% rebate to my Danville buyers. I live and have been selling homes in Danville since 1976. You not only get a rebate but also an experienced Danville broker, which in the long run is even more important.

Please call me and I will find you the right home and negotiate the lowest price!!!

Best regards,
Bruce Baldwin
Broker/Realtor-35 years
925-519-5740
Bruce@BruceBaldwin.com
0 votes
Arturo Shive…, Agent, Danville, VA
Sat Dec 4, 2010
It depends on the price of the property. In general, I would say you can expect the agent to offer a free home warranty plan. For higher end ($1 million +) properties, you might be able to get a half to one percent towards closing costs paid by the agent. RESPA prohibits buyers getting cash out of a purchase other than any overage they initially deposited to escrow.

Arturo Shivers, REALTOR, SFR
Lic. #01779941
Keller Williams Realty
760 Camino Ramon, Suite 200
Danville, CA 94526
Mobile: 415-871-4239
0 votes
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