0% Selling commission and 3% buying

Asked by Noah Fenley, Prosper, TX Sat Jun 4, 2011

0% Selling commission and 3% buying. There are a few realtors offering this. What's the catch?

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Brian Rayl’s answer
Brian Rayl, Agent, Dallas, TX
Fri Jun 10, 2011
I take offense to Debbie saying "sorry, but imo, anyone offering this "plan" is desperate (to attract business), not innovative."

I offered this plan to you right before these comments, so that is why I take offense. I am in no way desperate to attract business. The fact that I would chose to work with you without charging you a commission on one half of the transaction, I feel, IS innovative and away from the "usual" way of doing business. That is what innovation is, after all isn't it?

Of course there are conditions that go along with an offer like this and I would be more than happy to give you those conditions IN WRITING. There are also some qualifications, and not everyone would qualify for this type of discount. Feel free to do a full examination of my credentials, and I will even provide links for you to do so if you wish, as you should do with any potential agent that you plan on hiring.

As far as a "marketing" plan that Debbie referenced, I have a stellar marketing plan and I don't cut corners just because I am offering to sell your home for no commission. To me, that would be unethical and a violation of my fiduciary duty to do so without informing you before hand. I will market your home and do my absolute best to get you the top dollar for your property in the shortest possible time frame and with the least amount of hassles.

Perhaps to some, innovation means business as usual. I don't play that game. Terri and Debbie are not in the Dallas area, so they have no idea what our market is like. On a DAILY basis, more homes EXPIRE than get SOLD. I would be willing to bet that a good 75% (being conservative) of the reason is because of marketing (or lack thereof). I am not "A Sign and A Prayer" kind of guy. The market has changed significantly and OUR marketing has to change right along with it, both to the home buying public as well as potential clients. I don't "feel that is [my] worth." I call it a value proposition.

Give me a call and let's discuss it. I'm sure you won't be disappointed.

It's more than real estate. It's RAYL-Estate!

Brian Rayl
Keller Williams Elite
972-949-4222
Brian@Rayl-Estate.com
http://BrianRayl.com
1 vote
Michael Brow…, Agent, Allen, TX
Tue Jul 23, 2013
Regardless of commission, always interview agents to ensure they will provide all the services that you expect; this will help ensure you have a very positive buying and selling experience. Keep in mind, in Texas, commissions are negotiable!
2 votes
Jim Johnston, Agent, Seattle, WA
Sun Mar 23, 2014
Here's what I found out about these kinds of "Deals". The agent will in fact sell your house for zero commission, but you are under contract to use the agent to purchase your next home and they get a 3% commission, which is usually paid by the seller. The catch? If the listing doesn't pay 3% commission, you are on the hook to make up the difference, AND if you read the fine print the agent will keep your profits from the sale of your house until you buy another house through them, or you are on the hook to pay them a commission on the sale of your home if you don't buy a home through them.

So, basically the agent / brokerage holds your money hostage until you buy a house through them and if you don't buy, they charge you the commission anyway.

Not all companies that offer zero commission on your sale work like this, but I found a few that do, so beware.

If it sounds too good to be true, it is.
1 vote
Zack, , Allen, TX
Sun Jun 19, 2011
the catch is it takes money and advertising to sell a house. So tell me this.....if an agent has 0% commission on your house, meaning they don't make any money on it, what are the chances they are going to spend the necessary money it takes to post ads and get your house in front of as many buyers as possible?

the days of sticking a sign in someones yard and putting it on MLS alone to sell it are over. If your agent does that good luck selling it any time soon!
1 vote
I agree Jack; well stated!
Flag Sat Dec 21, 2013
Rebekah Dugg…, Agent, WEATHERFORD, TX
Tue Oct 27, 2015
There's no catch! At least with my agency there isn't. It's a high volume model. My brokerage will list your home totally free to you...we actually pay for professional pictures, listing and scheduling service fees as well. All that we ask is that you sign a buyer's representation agreement and allow us to help you out on the purchase of your next home. When you buy your next home we are then paid 3% of the home's value by the seller. We really do all of the same work for less money. It's just the model we chose to use.
0 votes
Steve Canfie…, Agent, Louisville, KY
Wed Sep 17, 2014
There are certain brokers who do this. I do this myself. Here's how it works with me. I will list your home on the MLS and 54 different search engines, including Zillow.com, Trulia.com, Homes.com and Realtor.com. I show your home and try to sell it myself. If I do, you pay zero commission. If I sell your home through another agent, you'd have to pay 3% commission to that company, but nothing to me.

The only stipulation is, you need to use me as your agent on the house you buy once your house is sold. Since the seller of that house pays the commission, you are not out anything, plus you are represented by a Broker with over 4,000 sales and 38 years of experience.
0 votes
Amy Arey, Agent, Allen, TX
Fri Jun 13, 2014
There's generally "not" a catch...but there ARE "scams" out there so do your due-diligence and research the Agent's credentials. Remember....anything can be "googled" but without interviewing the agent and getting a feel for them, you're not really going to get a "feel" of if they are the person you could / would trust the potential investment of your life with :) All personalities are different, so regardless of the "deal" that's offered...make sure you feel that you're getting an agent who listens to your needs and guides you through the transaction. (A stellar marketing plan / network when selling your home doesn't hurt either ;-)

-Amy S. Arey
Halo Group Realty, LLC
214.901.1341-Cell
http://www.MckinneyRealEstateInfo.com
0 votes
Santiago Ken…, Agent, Chicago, IL
Mon Mar 24, 2014
If sound like a catch its an scam .....
0 votes
Leigh-Jo Anz…, Agent, Albuquerque, NM
Mon Mar 24, 2014
Always read the fine print.

Leigh-Jo
Syan Real Estate
Call/Text: (505) 730-8181
New Mexico Real Estate: http://www.syan.com
Web Reference:  http://www.syan.com
0 votes
Scott Hulen, , 64068
Sun Jun 19, 2011
Well 0%, 3% business model has created some interesting discussion. But I think the point of the matter is how many agents for a $10,000 flat fee would perform the selling of the home and buying of a new home. I've asked this very question in a different format several times around the office this week to agents who work the business full time and average 20+ transactions per year. The vast majority of those agents said they would be willing to accept a $10,000 flat fee regardless of the commission percentage. In our market the average home sells for $140,000 if we get both sides of the commission on a standard deal we stand to make $8400. The 10 grand flat fee looks good. I don't agree that aggressive marketing of this business model is good for our industry but I think there is a place for consumers to get a better deal when they're providing the agent with multiple transactions.
0 votes
Brian Rayl, Agent, Dallas, TX
Mon Jun 13, 2011
Bruce,

You said "Your agent takes 2-3 days to get back with them because they have another job and that buyer might be gone and bought another house already. "

Well, in that case no one should hire an agent who has a family either, because if a family matter comes up, it may take them 2-3 days to respond as well.

Really? In this high-tech world, who is EVER off the face of the earth for 2-3 days? I understand having a secondary job may be considered to be a hindrance by many, but with the technology that is out there today, does it really make that much of a difference? I have an iPhone where I receive all of my emails and respond to them, usually within 2-3 hours even if I am at work. I use Docu-Sign and the new Keller Williams eSign system to obtain signatures instantly. I have fax-by-email systems so that when someone sends me a fax, I have instant access to it as opposed to having to wait to get back to the office or home to respond. All of my transactions are securely stored online so I have instant access to any form that I need, including the signed ones.

Believe me, in the transactions that I have done, RARELY if ever have I been the delay in the process. If you have ever seen one of my For Sale signs, potential buyers have access to instant information through QR codes, information by text or email, as well as a prerecorded information line. My purpose is to get a SATISFIED client that will then refer me business. I take the fact that Keller Williams has been voted the best in Customer Satisfaction 3 years in a row by JD Power and Associates to heart.

Free listings don't build a business. Quality customer service and customer satisfaction do. The "free advertisement" as you put it are only an added bonus for me to provide quality service to them as well.

Bruce wrote: "In this market I'd hire the best service, not the lowest cost, unless you can afford to take that chance. "

I agree completely.

It's more than real estate. It's RAYL-Estate!

Brian Rayl
Keller Williams Elite
972-949-4222
Brian@Rayl-Estate.com
http://BrianRayl.com
0 votes
Bruce Lynn, Agent, Coppell, TX
Mon Jun 13, 2011
Hi Noah,

What we often see is that new agents use this to build their business.
Some are good, dedicated and will spend all their time and money on your listing.
Then again you might get a part time agent with a full time job looking to get into the business.
They're using your house as FREE advertising to build their business, perhaps at your detriment.
Those of us in the business long term see that it is not a long term successful strategy.
Sounds good, smells good, but in reality around here it just doesn't pan out long term.
I personally would not trust a new agent with no business in this market to sell my house and
successfully work through all the challenges we often face on not just getting a contract but getting
the house closed.

In this market I'd hire the best service, not the lowest cost, unless you can afford to take that chance.

There are a few things we know and one we know is important today is how fast can your agent
respond to inquiries.....internet or if the buyer is sitting in front of your house. Your agent takes
2-3 days to get back with them because they have another job and that buyer might be gone and bought another house already.

I'd really grill the person who wants to use your home as advertising for buyers. That's what they're doing if you allow them to put their sign in the yard for FREE and not pay them a fee for selling it, even if they are the ones who offer up the idea. If it sounds too good to be true, it probably is.
0 votes
Debra (Debbi…, Agent, Livingston, NJ
Sat Jun 11, 2011
Brian thank you for your comprehensive reply. I wasn't being facetious. I do enjoy learning how others conduct business around the country. I have learned a lot during my time on Trulia.

I appreciate you taking the time to explain your business model.

Best wishes.........
0 votes
Brian Rayl, Agent, Dallas, TX
Sat Jun 11, 2011
Yes Debbie,

I make no attempts to hide the fact that I am a registered nurse and work at Children's Medical Center in Dallas and Plano in the Pediatric Intensive Care Unit and previously worked in the Emergency Room at Baylor. As my profile on my website says, I do not get stressed and needless to say, I am very cool under pressure.

Most people say that agents with other jobs are a negative, but I appreciate your perspective where having another job allows me freedoms that some dedicated agents may not have, and I agree with that. As I said, I am not desparate for work. However, I will correct you on two of your sentences. You say "real estate isn't your main job" and "We full-time agents..." I would include myself in that category as well. Just because I have another job does not mean that I don't devote full time to real estate. To the contrary, I devote more time to real estate than I do to nursing. I consider real estate my primary job.

I have several innovative plans that I work on a regular basis, but I did not go into detail. I have searched your profile looking for something on your marketing techniques and cant find much of anything... does that mean that you don't market? Obviously, you market your homes, but you don't necessarily post much about it. I am happy to give any of my clients my agreements in writing, which is required in the contract anyway.

You were fairly accurate when you were talking about possible restrictions in your post below however, so here are the two basic stipulations:
1) The home being bought must be higher priced than the one being sold.
2) The home being bought must be closed prior to or in conjunction with the home being sold (such as with a contingency contract).

I am also working with an investor currently who is flipping. My agreement with him is that he will use me to buy the home (so I get full commission), and when he flips it and I list it for him, I do so for 1% listing side commission. He is very happy with the homes I find him and happy to save some money on the sell side, and I am happy to have a regular, steady, quality client.

Noah: I replied to your email yesterday and left you a voice mail this morning. Give me a call when you have a chance. I left you my cell phone number in both messages.

Dp2 - I have seen your contributions here often on Trulia and appreciate the input you give to other buyers/sellers and even agents. I would be happy to be of assistance to you here in the DFW area.

It's more than real estate. It's RAYL-Estate!

Brian Rayl
Keller Williams Elite
972-949-4222
Brian@Rayl-Estate.com
http://BrianRayl.com
0 votes
Debra (Debbi…, Agent, Livingston, NJ
Fri Jun 10, 2011
Brian, I certainly didn't mean to offend you, but after reading your Keller Williams page profile, I now see why you can afford to defer gettiing paid, for all the expenses incurred with a listing, for what might be many months until the client buys a home --- real estate is't your main job.

You are forttunate to be working as a nurse and getting a steady paycheck and, I assume, benefits......something we full-time agents, who don't have another job, can't count on. I suppose that gives you more freedom to be "innovative".

I was also surprised not to see even 1 mention of your innovative plan. I was hoping to learn more about it.
If ths is your marketing strategy - just curious why you aren't promoting it there ?

Mentioning it here attracted DP - so that was a good thing for you....... maybe promoting it on your web page would generate business for you..

I'd love to learn more about your plan - I am always open to innovation - so please feel free to share it with us. I'd especially like to know what the "conditions" are.

Best wishes.............

Noah - best wishes to you, too...............
0 votes
Noah Fenley, Both Buyer And Seller, Prosper, TX
Fri Jun 10, 2011
Brian is not the only one offering this deal, but he definately looks to be the best qualified. The market is tough. This deal allows me as a buyer to get out of my present house and be more competative on the market. I can try to pocket the 3% or use it to move the house quicker. Moving the house quicker helps the realtor and myself. People are getting smarter on money. We pay closer attention to interest rates and percentages than ever before. Maybe the market no longer allows me to pay your "worth", but times have changed. A bird in hand is worth two in the bush. Brian, I emailed you my contact info.
Thanks to everyone who replied.
0 votes
Dp2, , Virginia
Fri Jun 10, 2011
Brian, I liked both of your explanations, and I'll have to keep you in mind for my next acquisitions in DFW.
0 votes
Terri Vellios, Agent, Campbell, CA
Sun Jun 5, 2011
Wow. I guess the agent feels that is their worth. There are a lot of different business models out there. Just be sure you completely understand what they are offering. Everything is in writing up front. And that you check out the agent's qualification, experience, support, license, references, etc. as you would any other person you entrust with such a great deal of money (value).

All the best to you.
Web Reference:  http://www.terrivellios.com
0 votes
Debra (Debbi…, Agent, Livingston, NJ
Sun Jun 5, 2011
Noah - just my opinion, but it sounds like a gimmick to me..........make sure you read ALL the fine print..........what if you decide to rent, and not buy following the sale of your home?
What if you find a fsbo on your own?
What if you sell for less than you hoped for, and then decide to spend much less?

I am sure there is a clause obligating you to a certain fee in the event you either don't buy, or spend a lower amount .

It costs money to properly market a home....and time..........sorry, but imo, anyone offering this "plan" is desperate (to attract business), not innovative.

I'd question just how much business they actually do if they are willing to work for free now............. in the hope you wil later buy a home.
I'd also see, in wiriting, just what kind of marketing plan they are offering. It takes more to sell a home than just placing it on the mls.

Good luck!

ps all commissions are negotiable...........there is no "normal", "typical" or "customary" commission!.........case in point - the numbers quoted below are not "normal" in my area.........
0 votes
Brian Rayl, Agent, Dallas, TX
Sun Jun 5, 2011
Noah,

That makes sense and is becoming more common. An agent offers to list your home with no selling commission, provided that you purchase your new home through them. That way, they are still making money. The only catch here is that you HAVE to buy the home through them. If you trust them enough to sell your home, I would assume you trust them enough to BUY a home through as well.

I would be happy to offer the same offer if it is something that you are interested in. Give me a call if you are.

It's more than real estate. It's RAYL-Estate!

Brian Rayl
Keller Williams Elite
972-949-4222
Brian@Rayl-Estate.com
http://BrianRayl.com
0 votes
Noah Fenley, Both Buyer And Seller, Prosper, TX
Sun Jun 5, 2011
I do have a call into the agent offering this service. It looks like I would pay the buyer's agent but my selling agent would not collect on my sell, but he/she would collect on my buy.
0 votes
Bill Eckler, Agent, Venice, FL
Sun Jun 5, 2011
If I understand this correctly, it appears this model is focusing upon attracting listings by disassociating the seller from the normal 6-7 percent fees for professional services and passing the commission along to the buyer. I'm not sure I can see today's buyers paying the commonly accepted professional fees normally paid by the seller.

I'm of the opinion that "if it looks too good to be true....it probably is." And from the seller's prespective, this definitely appears too good to be true.

Getting the facts and prodeeding with caution would be advised.

Bill
0 votes
Don Tepper, Agent, Burke, VA
Sat Jun 4, 2011
Who says there's a catch? Or . . ask them.

Actually, though, that model could work. Look at it this way: First, as a buyer there's typically no commission (to the buyer). So if you're the buyer and you're being asked to pay a 3% commission, there's income to the agent that you wouldn't get with the "traditional" arrangement of a commission when selling, but not buying.

As for the 0% commission selling, ask the agent. It's possible--I'm only guessing--that the listing agent might structure the sale the same way a FSBO would. Now, some FSBOs are willing to pay the buyer's agent commission. Others aren't. An agent might structure it like that: You pay no commission. However, the commission would have to be paid by the buyer. Be careful: That would serious limit the number of potential buyers who'd consider your home.

So: Ask an agent who's offering such a deal.

Hope that helps.
0 votes
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