Sticky Situation. Pay realtor commission n or not?

Sticky Situation. Pay realtor commission n or not?

Rental Property Investor · Burnet, TX · Member since 2016 · 9 posts · 4 votes

I’d like some feedback on how the bp community feels about my situation. I looked at a home w/ realtor but know the owner very well and had discussed it previously.

I plan to put in an offer on Monday for a rental property I really like. I know the owner and listing agent of the home very well but there’s some gray area as to the selling agent and the commission. I was looking at a different property with a selling agent and decided while I was near the neighborhood, I wanted to take a look at this property in question. I went by the property with the agent and made a run through.

This is my first home purchase ever so I’m an absolute newbie. Basically after I spoke further with the owner of the property about the home, he suggested I just put in my offer with the listing agent.

My question here is how should I handle putting in this offer? At some point I would like to expand and gain more rentals in the area so I don’t want to upset this selling agent but at the same time I’m very comfortable putting in a offer by myself plus I honestly had known and visited with the owner about the property previous to looking at it with the selling agent.

there’s a 3% commission in question on a 150k property.

Hope this makes some sense. Does anyone have any advice? Thanks in advance.

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Investor · Schenectady, NY · Member since 2015 · 107 posts · 111 votes
6y
I’m not an agent so I’m not going to give an opinion as to what is legal or ethical to agents. It’s very simple. The selling agent took time to show you the property. It’s absolutely the right thing to do to have them make the offer on your behalf. Trying to cut out an agent’s commission is very short sighted. Furthermore, if the listing agent knew that the selling agent showed you the property and is on board with cutting them out of the commission, what kind of person are they? Are they really someone you want to even do business with?
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  • Real Estate Agent · Philadelphia, PA · Member since 2018 · 416 posts · 396 votes
    6y

    @Heston McBride the seller pays the commission.  The realtor is essentially free to use for you.  Might as well take the free representation.  

  • RI · Member since 2019 · 3 posts · 0 votes
    6y

    It sounds like you already have the technical answer.  But, my 2 cents (I am NOT a real estate agent)...

    In my state, if a buyer comes to the table without an agent working on their behalf, things get a little gray.  You are better to have a person who is working on your behalf, especially if during the time between acceptance of offer and closing, issues come up.  

    But I would also say look realistically at your strengths/weaknesses.  If negotiating for your interests is your strength and you can live with the outcome, I say it is less important to have a buyer's agent.  If you prefer that layer of distance between you and the seller's agent, a good agent is priceless.

    Good luck!

  • Rental Property Investor · Mineola, NY · Member since 2014 · 838 posts · 212 votes
    6y

    @Heston McBride go through the agent! 

  • Ryan KellyBusiness Member
    Real Estate Broker · Austin, TX · Member since 2018 · 1k+ posts · 1k+ votes
    6y

    @Heston McBride Just for a point of reference since you mentioned you were a newbie, most of an agents work starts AFTER you find a property. This includes drafting and negotiating all the contract details, inspections, appraisal, option period negotiations, etc. Good luck!

    Ryan Kelly Group - Keller Williams5110 Reviews
  • Rental Property Investor · Savannah, GA · Member since 2018 · 174 posts · 129 votes
    6y

    @Heston McBride

    Wait.. Shouldn’t the seller be paying the commission anyways? Are you trying to save the current seller money since you know them. Typically the buyers and sellers agents will just split the commission that the sellers agent agreed to list the house at. Unless you had some previously arranged deal with your agent which is doesn’t sound like. Have your agent submit the offer, just for your own reputations sake.

  • Theresa HarrisPro Member
    Member since 2019 · 15k+ posts · 11k+ votes
    6y
    Originally posted by @Dylan H.:

    @Heston McBride

    Wait.. Shouldn’t the seller be paying the commission anyways? Are you trying to save the current seller money since you know them. Typically the buyers and sellers agents will just split the commission that the sellers agent agreed to list the house at. Unless you had some previously arranged deal with your agent which is doesn’t sound like. Have your agent submit the offer, just for your own reputations sake.

    Even if only one realtor got the commission, it is the same amount out of pocket for the seller.  The one agent would just get more money since they don't have to split the commission.

  • Shawnee Mission, KS · Member since 2016 · 716 posts · 313 votes
    6y

    Good topic I talked to my agent who went part time and got a full-time job.

    She said the current environment is cut throat agents doing things that are unethical or at least bad business practice .

    Verbally tell someone one thing then turns around a do something else leaving folks holding the bag.

    Looks like a dog eat dog world right now.

  • Member since 2019 · 1 post · 0 votes
    6y

    @Heston McBride since this home is listed with a Realtor the seller is obligated to pay a commission. You can not do this independently. The seller is giving you accurate information to place your offer through the Realtor who showed you the home.

  • Member since 2019 · 111 posts · 130 votes
    6y

    @Heston McBride

    Heston,

    I totally empathize with your situation. For many years, I have resented the realtors commission and figured I could do better myself. (I do a lot of things myself to save money like change the oil in my cars and renovate my own home.)

    However, my wife has a relative in our area who is a realtor so we have used her. She has shown me 10 houses and written contracts on 4 and I bought 1 and sold 1 so far. The house I'm living in now, I bought with no realtor but I'm going to list it with my realtor. I also have about 5 dear friends who are realtors and I see how hard they work.

    In my opinion, the biggest contribution my realtor has made to us has been emotional support. Her knowledge and experience help her stay calm through all sorts of problems. My first house had mold in the attic and many other problems, she calmly negotiated with the buyers while I dealt with the mold.

    After a year as a home inspector, I have seen hundreds of transactions and I would never deal without a buyers agent who is different from the listing agent. I wouldn't be too concerned if both agents worked for the same broker.

  • Member since 2019 · 111 posts · 130 votes
    6y

    @Heston McBride

    In my experience, if a property is listed on the MLS, you cant avoid paying a commission to someone if you buy it. If you only use the listing agent, he will get the full commission, but will split it with your buyers agent if you use one. And the broker gets a cut (sometimes more than the realtors).

    If you really dont want to pay a realtors commission, look for off-market deals.

  • Rental Property Investor · New York City · Member since 2019 · 703 posts · 538 votes
    6y

    Either way the full commission is being paid regardless of who you want to cut out. You are not saving a dime. IMO, put the offer through your agent because he/she is Your agent and shown you around.  Your friend - "Hey, cut your agent out so my agent can get all the commission" - Don't you think that's messed up?

    You feel that your agent didn't do much work and so you actually think the listing agent helped you more??  You happened to find the house you wanted quickly and if not your agent would show you more until you are happy. 

    Its also about doing the right thing and you obviously know what the right thing is because your questioning your seller friend in the way they do business. The sellers agent is for the seller and you have your buyer agent.  

  • Real Estate Agent · Clinton, MD · Member since 2014 · 6 posts · 4 votes
    6y

    @Heston McBride +everyone who commented

    Although, I do believe as well keeping the agent, whether you can control if he get's paid or not, in the deal is the correct thing to do in a legal sense...

    I truly appreciate and applaud everyone who has commented appealing to the morality of the situation as well. And I'm sure it's initially tough decision to choose which way to go especially being newer to real estate (as I am as well), but to see the support, encouragement and well given advice here, I'm sure, makes that decision easier. Creating long-lasting relationships and putting myself in the other person's shoes, is what I hope guides me to make the right business and frankly, life, decisions to build the great empire I'm looking to build.

    Seeing posts and answers like this really keep me motivated to continue to grow and to connect with great people like you all in real estate.

    Hope you were able to find your way and good luck closing on that property and many more!

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