Is it possible to not pay brokerage fee at closing?

Question

Ok so I am strickly curious on the above question. I am closing on a property that is settling for about 10k in a few weeks. I have been working with an agent for awhile this will be our 4th deal together. Every time we close there is the broker fee of $395 that I have to fork up. If she were to bring me the deal i would have no problem paying that, I see it as a finders fee.

But this time and 2 other times I have brought the deal to her. She told me on these small price settlements she gets a set price not the regular 3%. Usually around $1000. Now what I want to know is would it be foolish of me to ask if we can arange something with that $395 as one she didn't bring the deal to me and two she didn't even show me the property. She gave me the code (I know it's against agent code, but I suppose we have built that trust that I'm serious). All she did was submit the offer.

What are your takes on this, am I out of line for considering it?

Wayne Brooks · Answer

If you have an agent willing to even think about pursuing these properties, don't complain about the price.  It's a ridiculous waste of time foran agent to work on deals with $1000 commission, less fees.

Joel Owens · Answer

This kind of stuff is why I haven't worked on residential in a decade......... : )

Low barrier to entry and everyone thinks brokers and agents should work for free on the investor side and shotgun offers all over creation with low ball offers. Now you know why residential brokers/agents work on selling houses to home owners instead. Higher price points with more commission.

Tariq said he is working on getting a license. He will still work under a broker which will generally charge a fee per transaction so he will pay it anyways. The only difference is he might could keep the 600 bucks or so for his commission. Sounds like really stepping over dollars to save pennies to me.

I would want brokers/agents to get ALL the money they can. You might have found this one property but maybe next time the broker/agent has a smoking hot off market deal with a lot of equity. You chopping down their already low commission will resonate in their mind and they might bring the deal to someone else.

You saved 395 but lost maybe 20k in equity in a great deal not being presented to you.

If the agency is selling an REO they have to belong to REO bank asset companies and get hit with so many annual fees it isn't funny. Unless they do a ton of volume they can lose money. Asset companies ask them to pay for trash outs and winterizing and get re-imbursed and sometimes stiff them on the payouts.

Investors eventually learn they catch more deals with honey than they do with vinegar. Long term investors develop a rep for treating the brokers/agents very well with commissions whether that is residential or commercial.

James Wise · Answer

I assume she would say no and be offended. $1K after she splits with her broker is pennies. They are not getting rich off of you. If the service is good don't rock the boat.

Wayne Brooks · Answer

LOL.  To you guys who say "don't pay it", the Brokerage charges the $395 to the transaction, period. So, you want the agent to pay it?  Do the math th, the agent gets 3% of $10k which is $300, so minus $395 that means the agent Pays $95 to do the deal for you.  What a joke.

James Wise · Answer

To be fair he said it was a 1k flat fee. So assuming she's on a 60/40 she makes $205 if she credits him the fee....The game is about building relationships fellas. Nobody with any business sense is going to work with the guy that asks for a discount on the smallest deals in the market.

Do you want to work with the bottom of the barrel agents at all times? Or the ones with business sense?

Ash Patel · Answer

I have had several agents over the years give me lock box codes.  Before things got digitized, I had one tell me the typical codes that each brokerage uses.  I bet many people on this site have been given codes!  No need to read the riot act.

Russell Brazil · Answer

You are lucky to have an agent to service properties at that price. You should eat whatever fees there are.

On another note you you have admitted that you and your agent both engage in illegal activities  (your agent giving you codes to properties ) in a public Google indexed forum. You very may well have scared half the people in this site from doing business with you. That would almost instantly get your agents licensed revoked and it would not be hard to figure out who they were.

Chris Pasternak · Answer

No you're not out of line for thinking that.  Honestly, she's more out of line for not eating that every deal after your first in my opinion.  Repeat business is golden.

Devon Garbus · Answer

Talk to your agent's broker. Chancesa re it won't get anywhere but you can try.

Teresa F. · Answer

Hi Tariq --  Brokerage fees are annoying.  I don't charge them because I see them as nuisance fees.  Now, please listen to @Joel Owens.  While you can always negotiate fees, etc. a good investor agent is like gold and my best deals were brought to me by agents who knew that I would pay the ridiculously low asking price on the properties without trying to negotiate and close the deal.  Being the first or only person who gets the call when an agent has a great deal is where you want to be.

@Joel Owensundefined

Is it possible to not pay brokerage fee at closing?

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