Investor / Broker Commission Split

[Oscar Beteta]

Hello BP,

I am reading "Investing in Duplexes, Triplexes, and Quads" by Larry Loftis and came across the concept of partnering up with a "Buyer-Broker." The advice is to find a broker who works with real estate investors to help them close on MLS deals. Because the broker will normally receive the full 3% commission (as opposed to an agent who must split the 3% commission with the broker), he/she is able to split the 3% commission with the real estate investor. The expectation is that the investor is doing all the upfront work to research and evaluate the property. The broker helps to formally close the deal and doesn't invest nearly as much time through the evaluation process as with a typical buyer. The commission split between the broker and investor depends on the relationship between the two parties but in general is a 50/50 split.

I wanted to do a reality check on this concept.  Is this a common arrangement that investors are able to set up with buyer-brokers?  Does it just happen in certain states (Larry Loftis is an investor from Florida)?  How does one find a buyer-broker?

[Steve Vaughan]

In the amount of time it takes you to locate a broker that can and will do this (not to mention contract and legal CYA to invent) you could figure out and master how to buy solo. Nothing says you have to have an agent or broker at all to offer on and purchase property.

If you are new and/or never purchased before, have quality represent you for sure.  But if you are knowledgeble and experienced, just offer 3% less and/or get the full 'commission' in seller concessions.  

Except for my first ever primary purchase in 1998, I've never used an agent to buy. He we a complete idiot so I got to work learning how to do it on my own. 

My offers simply state I have the right to obtain representation if my offer is countered.  The LAs seem to see fit counters are rare.