Question on self representing as a buyer

[Account Closed]

Hi there,

Wondering if the professionals here can give me a clear answer. On several occasions, I’ve asked listing agents if they would be open to a cash buyer who represented themselves which would help save the seller the commission on the buyers agent. Some realtors were open to considering it while others said flat out that it wouldn’t save their client any fees and asked that I contact a realtor to show the place to me. Do listing contracts state the entire 5-6% fee go to the listing agent if the buyer is not represented by an agent? 

Due to the competitive market, if I can save the seller 2-2.5% on the buyers agent commission, my cash offer may beat out other offers. I have successfully purchased several properties this way in the past; however those properties were sold by owners or the sellers were realtors themselves (so obviously more keen to my offer).

Also, while I understand the buyer does not pay the commission (the seller pays it); it is ultimately the buyer that pays it as the seller just includes this cost in considering what price they will accept. 

Any tips for approaching realtors or wording my request differently would be appreciated. Thanks for any (honest) feedback. 

[Russell Brazil]

A listing agents contract typically is for X percent. Said agent then offers half of their commission to buyers agents to bring a buyer and handle everything on the buying end of a transaction. Absent a buyers agent, they do not reduce their commission typically.

Sometimes an agent participates in whats called a variable rate commission, meaning the commission could vary, higher or lower depending on terms of the listing contract. For instance reducing the commission by 1% if there is no buyers agent involved. 

Variable rate commissions must be disclosed to all indivuals in order to create a level playing fields for all people potentially making an offer.  If an agent engages in a variable rate commission but does not disclose it, that is an ethics violation. 

It is also an ethics violation that agents get caught with doing often, one that most do not realize they have even done anything wrong.  When other competing agents and buyerssee the property closed at a price lower than their client offered, and see no buyers agent listed, or the listing agent listed as the buyers agent...they start digging into what happened. When they see a variable rate commission occurred but was not disclosed, they file an ethics complaint.  

Ive personally as a member of the board in my state heard multiple cases on variable rate commissions not being properly disclosed. There is nothing wrong with them, but they have to be disclosed up front so that the playing field is fair and even for everyone making offers.