If buyer-seller can't agree on $, will agents sacrifice their %?

Buying & Selling Real Estate
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If buyer-seller can't agree on $, will agents sacrifice their %?

Jason V.
MS · Member since 2015 · 56 posts · 20 votes

Buyer gave me a low-ball offer.  Then they came up to $95k all cash, saying that's the best they could do.  OK.... Well, I said $99k was the lowest I would go, considering the buyer's agent commission % is really coming off the top, right?  That would leave me with $96k.  I've determined I could budge another $1.5k, but I need $94.5k after everything's said and done.  Period.  So that means $97.5k is the lowest offer I can accept.

Even if the buyer & seller won't budge, the buyer's agent could simply agree to a 0.5% commission, close the deal, and buyer & seller would both be happy.  But there's really a whole range of percentages that the buyer's agent could agree to that are likely NEVER considered to be on the chopping block.  If a buyer's agent could drop to 1.4% commission in this case, then the buyer would only need another $900 which seems reasonable.  Everybody would be sacrificing to make the deal work.  Does anybody ever try negotiating the agent commissions when you're within a couple percent price difference??

I've come down as far as I realistically can.  $10k below asking.  Is asking the buyer to come up $1000, and the buyer's agent to come down $1,000 too much to ask for?  I mean... really, it comes down to how invested the buyers agent actually has been.  How much work did they really do?  What is their time worth?  $35/hr for 56hours = $1,960.  Buyer coming up $1,500 to cover that and buyers agent dropping commission to 2% could save her from another 56 hours of work...

Like I said, tho... there's a whole range of variable percentages that get us all to my rock bottom price.  Can I get anymore outside the box than this?!?  I'd imagine most negotiations aren't this tight.

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Joe Norman
Property Manager · Baltimore, MD · Member since 2014 · 1k+ posts · 1k+ votes
4y

If you ever need a Realtor in Baltimore then please call someone else!

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  • Wayne Brooks
    Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
    4y

    @Jason V. A weak one will…I never did.  You think the agent should cut their commission to $500….good luck with that. $35/hour might be okay….if an agent actually got paid for every client, and every hour, they work with….many never buy, or sell, anything though.

    11Reply
  • Billy Daniel
    Rental Property Investor · Russellville, AR · Member since 2014 · 688 posts · 509 votes
    4y

    Sounds like you need to find a new buyer.  Asking the agent to take a pay cut is ridiculous.  How many other professions do you ask workers to cut their pay so you can save some money?  Agents do a lot more than the general public sees.  How long has this agent been working with this buyer?  Have they been looking at houses for 6 months?  You can't base your calculations on your experience without considering theirs.

    17Reply
  • Jason V.
    OP
    MS · Member since 2015 · 56 posts · 20 votes
    4y

    I think you guys are missing the flip side of this.... there's another realtor who spoke with me.  His clients are looking for something in this price range -- $100k.  He's been showing houses for 3 or 4 months.  He said he's "too invested" to just work for 3% and wanted more like 6%.

    No. No. No.  If you can't make a living as a real estate agent by negotiating your commission downward to escape these "woulda, shoulda, coulda" moments, then they definitely don't need to be begging for more than 3%.  THREE is just a number.  Every homeowner and home buyer seems willing to negotiate to some degree.  Buyer budged around $8k so far.  I budged about $10k and avoided a typical listing broker in order to save myself ~$3,000... doing most listing agent work myself.  To say that the real estate agent couldn't budge to make her clients happy and get move onto her remaining clients, ventures.... is extremely short-sighted.  Don't look a gift horse in the mouth??  A bird in the hand is worth two in the bush??

    If it weren't for MLS listing services, there'd really be no need for buyers agents. I'd just call the seller directly, because I could see their phone number. This "extra work" that realtors are doing is self-inflicted thru a legalized Racketeer Influenced and Corrupt Organization (RICO). Transparent listing services are honest services.  Concealing is the nature of fraud.  Yadda... yada... Didn't mean to come here to rant, but who are buyer's agents really working for, again?

    4Reply
  • Arsen Atanasovski
    Investor · Rochester, MI · Member since 2017 · 1k+ posts · 584 votes
    4y

    Hey next time you need any medical assistance tell the ambulance, you guys drive around town all day! All I hear is your horns and lights, $500 per call look charge everyone else that needs an ambulance but for me do it for free buddy! Let me know what they say.

    10Reply
  • Jason V.
    OP
    MS · Member since 2015 · 56 posts · 20 votes
    4y

    Sure... another legalized RICO practice.  Excessively inflated charges because they know they can bill health insurance companies and Medicare, in particular, WHATEVER PRICE THEY WANT.  Uhh... yea....

    Just as I avoid realtors and DIY for myself, I will also drive myself to the hospital too if I actually need surgery and ONLY if I need surgery.  Everything else can be fixed with iodine & time.  And $500 MY ARSE!  They were charging $8,500 for a 9-mile ambulance ride a decade or two ago.  Actually had a medical emergency with our baby last year.  We didn't need an ambulance whatsoever, but the wifey saw a cop and wanted to get his attention so that he would turn his lights on and get us to the hospital faster, safer.  What did he do?  He told us to wait for a ****ing ambulance, which delayed us 30 min.  No ****ing thank you.  DIY all day, every day.  Surgeons are the only real professionals.  Even attorneys can eat ****.  Another practice of knowing how to win every case from every side, but the "code of conduct" prevents them from telling anyone anything until they pay up.  Legalized RICO practices all around.

    :sigh: I'm not saying that $500 is the appropriate answer, but that it's a possible deal maker.  She should be looking at that chart I posted above WITH her client... and they should be the best ones to determine how much she should be earning.  It's not my job.  I'm just showing the potential payouts between buyer and buyers agent that makes the deal go thru.  I'm counting 26 shades of signed, money-making contract there.

    1Reply
  • Joe Norman
    Property Manager · Baltimore, MD · Member since 2014 · 1k+ posts · 1k+ votes
    4y

    If you ever need a Realtor in Baltimore then please call someone else!

    17Reply
  • Theresa HarrisPro Member
    Member since 2019 · 15k+ posts · 11k+ votes
    4y

    Why should the realtor take a cut?  Why not simply say no and look for another offer?  While you see the buyer's agent as perhaps doing nothing other than paperwork and being present at the inspection and perhaps turn over keys at closing, how many houses has that agent shown that buyer before landing on this one?  With a lower priced home, there is even less money in it for the agents and they don't get all of that money.  There are other fees and people they have to pay.  It might be different if it was a $500K home where their commission was higher.

    3Reply
  • Jon KellyPro Member
    Investor · Bethlehem, PA · Member since 2016 · 929 posts · 951 votes
    4y

    @Jason V. just tell the buyer "no" and find a new buyer if you strongly believe in the price. Most likely, the buyer will come up to $99k or $97.5k... any normal buyer will not walk away for $2.5k...

    If you don't want to pay agent's fees then you should've listed for sale by owner. 

    7Reply
  • Taylor DaschBusiness Member
    Real Estate Agent · Temple, TX · Member since 2022 · 1k+ posts · 700 votes
    4y

    I understand what everyone is saying, and I would NEVER ask a realtor to take a pay cut, BUT I have cut my commission a few times for my buyers. I am a full time firefighter and a commission check is huge to me regardless, also from a business standpoint, I cut my commission .5% and get my buyers the deal in a competitive market, I then dont have to show them any more properties and open my schedule up for another buyer, my buyers are extremely satisfied with me and will give me referrals and a good review, and my check still makes me VERY happy! 

    The examples I have are I got my clients in @ 250 on a Home that had just dropped from 275-265, the other offer that was on the table after the price drop was around 250 as well we came in @250(my clients max budget), and I cut my commission by .5%, the property then appraised for 275 and my clients were ecstatic with me. They had been looking for a "deal" and the market was still hot where I am at. It was a Win Win for all parties. 

    The other one was on an 850k listing(new build) and I dropped my commission by .5% which does not matter to me at all on this big of a transaction, I probably would have lowered it by 1%. 

    Also I have cut it a few times on the listing side as it is no work at all once the listing is up and you have your marketing systems in place. 

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  • Arsen Atanasovski
    Investor · Rochester, MI · Member since 2017 · 1k+ posts · 584 votes
    4y

    Wasn’t getting personal just giving an example but if $3000 or $5000 or whatever your number is that’s not making the deal Happen then cancel your deal, you have no obligation to pay. 

    Good luck on your listing! Hopefully you find the right buyer or agent. 

    2Reply
  • Paul De Luca
    Real Estate Agent · Chicago, IL · Member since 2018 · 1k+ posts · 1k+ votes
    4y

    @Jason V.

    Would you be willing to take 2-3x less pay from your employer/boss to work on a new project? 

    You're also not considering that a buyers agent most of the time has splits with their brokerage and a team split if they are on a team.

    A buyers agent helps advise and guide a buyer through a transaction by:

    -Helping them obtain financing through a reputable lender

    -Identify potential issues with the property

    -Assist with coming up with a reasonable offer price (comps), drafting the contract, admin paperwork

    -Help with negotiations during the transaction

    -Provide referrals for a home inspector, attorney, and contractors

    1Reply
  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    4y

    At these price points, the agents are making less than minimum wage. You are even lucky you got agents working on this deal at all. With my fixed overhead, Id lose money servicing this deal, and thus wouldnt even take it.

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  • Steve Vaughan
    Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
    4y

    As a buyer of a listed property I would offer directly to the LA and state if my offer is countered I reserve the right to obtain an agent.  I let the seller and agent work it out and my offers were rarely countered. 

    As a seller I would stick with my counter and be silent.  The buyer and their agent will work it out or not, but as DIY as I am, it's probably not our place to ask an agent to reduce, especially on such a low value asset.  

    I generally sell by owner and state in my Zillow and CL ad to add any buyers agent costs to the offer.  I always asked a very fair price so most went ahead and got an agent.  At least the buyers knew their agent wasn't free and the  buyer's agents being free lie was bunked as it should be. 

    Good luck with your sale. It can be stressful. 

    2Reply
  • Scott E.
    Contractor · Scottsdale, AZ · Member since 2010 · 2k+ posts · 3k+ votes
    4y

    So you have priced your home too high, and now you want to take money out of the real estate agents pockets to cover the difference? If you didn't want to pay agents commissions, you should have tried to sell your home off market.

    I have had agents offer to discount their commissions 3 different times to make deals work. These were deals that I sold for $750k, $870k, and $2.65M.

    My opinion is that you should never ask an agent to take a pay cut. But it is even more offensive that you're asking them to take a pay cut on a $95k sale.

    10Reply
  • Ke Nan Wang
    Developer · St. Augustine, FL · Member since 2018 · 311 posts · 384 votes
    4y

    The short answer is: it's up to the buyer and buyer's agent to work it out. You can make decisions on your end but you shouldn't ask other people to take a pay cut to make a deal work for you. 

    2Reply
  • Chris MasonPro Member
    Moderator
    Lender · CA · Member since 2015 · 9k+ posts · 10k+ votes
    4y
    Quote from @Jason V.:

    Buyer gave me a low-ball offer.  Then they came up to $95k all cash, saying that's the best they could do.  OK.... Well, I said $99k was the lowest I would go, considering the buyer's agent commission % is really coming off the top, right?  That would leave me with $96k.  I've determined I could budge another $1.5k, but I need $94.5k after everything's said and done.  Period.  So that means $97.5k is the lowest offer I can accept.

    Even if the buyer & seller won't budge, the buyer's agent could simply agree to a 0.5% commission, close the deal, and buyer & seller would both be happy.  But there's really a whole range of percentages that the buyer's agent could agree to that are likely NEVER considered to be on the chopping block.  If a buyer's agent could drop to 1.4% commission in this case, then the buyer would only need another $900 which seems reasonable.  Everybody would be sacrificing to make the deal work.  Does anybody ever try negotiating the agent commissions when you're within a couple percent price difference??

    I've come down as far as I realistically can.  $10k below asking.  Is asking the buyer to come up $1000, and the buyer's agent to come down $1,000 too much to ask for?  I mean... really, it comes down to how invested the buyers agent actually has been.  How much work did they really do?  What is their time worth?  $35/hr for 56hours = $1,960.  Buyer coming up $1,500 to cover that and buyers agent dropping commission to 2% could save her from another 56 hours of work...

    Like I said, tho... there's a whole range of variable percentages that get us all to my rock bottom price.  Can I get anymore outside the box than this?!?  I'd imagine most negotiations aren't this tight.

    An idiot is born every day, so sure you might get what you are after. 

    Here's a reason why this is less likely than you think, however, that hasn't been mentioned:

    - Seller needs to sell. And only has one of this house to sell.
    - Buyer wants to buy. And apparently likes this house.
    - Both realtors are in a position to say "NEXT!" and to work on multiple transactions at once. They want to do deals, but have less incentive to close particular deals than either the buyer or seller. 

     .

    It's like playing chicken with someone in a sufficiently large car such that they aren't actually going to be harmed by the impact, meanwhile you are riding a bicycle with no helmet. Good luck. It might happen, you might stumble into a victory, sure, but as a game plan it's not very good at all. 

    This cpa/accountant meme also feels relevant:

    8Reply
  • Jonathan R McLaughlin
    Rental Property Investor · Boston, Massachusetts (MA) · Member since 2016 · 2k+ posts · 2k+ votes
    4y

    @Jason V. At a higher price point I can see a broker being willing to kick in 1-2k or so to get the deal done and get rid of a time suck client, but that not really your call is it?

    I’m sure a good broker would recognize this for what it is—probing for the easiest solution that benefits you exclusively. Why should they be the weak spot?

    You say you have a bottom line price and it hasn’t been met so move on. Just don’t be surprised when the next offer is lower.

    4Reply
  • Andrew Ricker
    Real Estate Agent · Tampa, FL · Member since 2022 · 13 posts · 6 votes
    4y

    I tend to agree with the above comments. As an investor, I'm looking for the best possible deal. As a Real Estate Agent, I'm giving 100% of my time, energy, and focus on the transaction at hand. It's not uncommon for a Realtor to have been working with the same buyer for 6-12 months before going under contract. Lots of variables, but I'd expect anyone I work for to understand and appreciate my value so much that asking me to cut my commission isn't even on their mind. 

    3Reply
  • Sergey A. Petrov
    Real Estate Consultant · Seattle, WA · Member since 2022 · 1k+ posts · 784 votes
    4y

    @Jason V. - it sounds like you don’t have an agent on your side. It also sounds like the buyer has an agent. That agent is already likely working both ends of the transaction since you have no representation (unless you are a seasoned investor and have bought and sold dozens of properties). The chances are your house would’ve sold and closed by now with you netting more than you think you’ll net if you hired a professional agent to help you sell it. Lots of ways to negotiate a transaction that makes everybody happy but you have to know what you are doing.

    1Reply
  • Melanie ThomasBusiness Member
    Real Estate Broker · San Antonio · Member since 2022 · 1k+ posts · 490 votes
    4y
    Not all business is good business. I always tell my staff #1 rule "Get the Business" however it is meant within reason. Good luck on this!
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  • Rick SteinPro Member
    Investor · Austin, TX · Member since 2014 · 248 posts · 181 votes
    4y

    As an agent for 35 yers, I have been asked many times to do a commission-echtomy. The seller says, "if i have toi take less, you need to take less". The answer in the most professional way I can is "No, I don't have to take less. If I cut my commission every time the seller does not get what he wants, especially in a declining market such as we have now, I'd be out of business. Part of the problem is that most agents don't show their value to the seller. 

    7Reply
  • Carlos Ptriawan
    Member since 2019 · 7k+ posts · 4k+ votes
    4y

    Any realtor will be upset with this request.

    I've paid my selling agent 1% but that's negotiated way before I sign any agreement. I think any agent has a minimum regardless of the transaction. Redfin charges $3k at least.

    1Reply
  • Will F.
    Investor · Los Angeles County, CA · Member since 2012 · 962 posts · 279 votes
    4y

    Don't trip over dollars to save pennies... you have a lot to learn.

    That being said you can negotiate with the agent.  

    @Jason V.

    " If it weren't for MLS listing services, there'd really be no need for buyers agents. I'd just call the seller directly, because I could see their phone number. This "extra work" that realtors are doing is self-inflicted thru a legalized Racketeer Influenced and Corrupt Organization (RICO). Transparent listing services are honest services. Concealing is the nature of fraud. Yadda... yada... Didn't mean to come here to rant, but who are buyer's agents really working for, again?

    "

    This is very untrue statement.  Real estate agents have a fiduciary duty to their clients.  Real estate is little understood by 99% of the people.  While, yes there are many bad agents, your view of it negates the fact that most buyers, including small investors have no clue about real estate transactions and negotiations, nor how to price real estate.  Even if you've done a couple dozen transactions most agents who are qualified will run circles around a non-represented buyer or seller...

    1Reply
  • Michael HaasBusiness Member
    Real Estate Agent · Sammamish, 🌧️ Seattle Investor-Agent | 🤑 Helped 400+ Clients Invest in Real Estate | 🏘️ Owns 23 WA Rentals & Airbnbs | 🏗️ Built 5 DADU's | 📈 You Can Do It Too · Member since 2016 · 725 posts · 3k+ votes
    4y

    I agree with what others have said - Every house isn't for every buyer, and the Buyer's agent pay isn't anything you need to worry about as the seller. Simply counter with your absolute best offer and let them figure it out. They'll either accept (through the buyer increasing their offer, the realtor taking a pay cut, or a little of both) or they won't. 

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  • Jordan MoorheadBusiness Member
    Real Estate Agent · Austin, TX · Member since 2015 · 5k+ posts · 3k+ votes
    4y

    @Jason V. if I wanted to make $35 an hour I'd go get a job that was 9-5 and didn't have me working nights, weekends and holidays

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