Bargaining agent Rate

Quad cities iowa · Member since 2019 · 104 posts · 78 votes

this will not be a popular question amongst some but others may love it. Please share your thoughts.

Im buying a home shortly and was wondering if it’s possible to negotiate an agent’s profit from you. That is the agent representing me, the purchaser.

I am completely aware the seller pays the commission, but if I were for instance sign my agent with them to only take 1.5 or 2 percent Instead of 3 and that .5 to 1.0 percent discount for the seller would then be pushed back onto my purchase and cause a discount.

i know what I want, I know my value and purchase price is worth it even at 1.5 to 2 percent. Can this be done? If not, why not?

Every other field of work has checks and balances. Always negotiation. The same Job title as a doctor pays differently in location c than location d. Why is this so standardized?

Thanks,
Eddie

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Matt B.
Investor · Chicago · Member since 2018 · 113 posts · 51 votes
6y
it can be done, you need to appeal to the agent though - what do they get out of this deal? right now its purely beneficial to you. Make an agreement that is mutually beneficial, and doesn't just satisfy your needs.

its harder if its the first time working with the agent, but if you have a relationship with them, then t'll def. be easier, because they know you'll use then on multiple properties for buying & selling.
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EJ K.
OP
Quad cities iowa · Member since 2019 · 104 posts · 78 votes
6y

@Matt B.

they get 10-14 grand if they keep 2 percent commission. I’m buying no matter what. I just need someone to show me places, and send me mls finds which can be automated. Pretty small amount of work for a guaranteed buy.
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Matt B.
Investor · Chicago · Member since 2018 · 113 posts · 51 votes
6y
Agents can & do a lot more than that. For whatever reason, you're dismissing their actual work load.

But you don't need to use an agent - if the work is as easy as you say, just do it yourself and save the entire 3%
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Theresa HarrisPro Member
Member since 2019 · 15k+ posts · 11k+ votes
6y
@EJ K. Some will lower their rate a bit if you are selling your home and buying another one. As you are buying, the rates have been set by the seller's agent in the contract that the seller signed with them when the house was listed.
If you plan to buy other properties, you want to find a good agent to work with. Some of them may give you some sort of discount. I had one who bought a new stove for a rental I bought, and a new toilet for another one. Odd gifts I know, but both were needed for the houses, so it was perfect.
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James Mc Ree
Rental Property Investor · Malvern, PA · Member since 2016 · 1k+ posts · 936 votes
6y
Call several agents and see what they tell you. You might get a hungry one that agrees.
The commission is the agent's compensation for doing the work you just listed, and much more you didn't list. You could make a case that you have a specific property in mind for an offer and want a discounted deal just to help you offer, negotiate and settle on the property. Your second post seems to indicate you don't know what you want and want the full range of buyer agent services doesn't look like that.
The buying and selling brokers split the commission. If the total commission is $10,000; $5,000 goes to each broker. Of that, approximately 50% goes to the agent, but that varies some with the agency. That gets $2,500 to the agent. The agent has bills to pay just for "doing the job", such as office space and support, MLS access, etc. The agent isn't paid an hourly rate. What's it like to deal with you? Do you want to see just 1 or 100 properties? How many times? Can you afford anything you want to see? There is no compensation at all for that agent if you don't buy something with him/her. It's not like the agent gets a giant windfall out of the sky just because you called. The agent might literally get nothing at all.
It is not clear from your posts that you know what you want and need minimal help if you think you need an agent to see MLS listings and get into places. Listings are visible on many sites for free. You can do your own screening of properties without an agent. Likewise, you can call the selling agent to see the property. In that situation, the selling agent would have both sides of the deal and is likely much more willing to do what you describe.
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Gary Lucido
Real Estate Agent · Chicago, IL · Member since 2017 · 53 posts · 48 votes
6y
This is not as hard as some people make it out to be. First of all, don't push any savings back to the "seller". It may not end up there. The listing agent can keep it for themselves. Get a cash rebate/ credit for yourself at closing.

You're talking about a homebuyer rebate. It's part of some realtors' business model (mine for instance but also Redfin's). You can either get an agreed upon percentage rebate or you can even pay some realtors by the hour and they will give you 100% of the commission. Just Google it.

And all that nonsense about how hard realtors work and how much value they provide is a red herring. What we do has a dollar value. No need to overpay for it. How much is an hour of a realtor's time worth? If your transaction is easy and a realtor spends 15 hours on it how much should they earn for that 15 hours?

It's 2020. The idea of a flat rate commission is kinda obsolete.
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Russell BrazilBusiness Member
Moderator
Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
6y
In most states yes it is possible. In I believe 11 states, buyer rebates are illegal. However, also keep in mind....you dont know how much the commission is. You know what happens when you assume. Commission could be much lower or higher than your estimate. Ive received commissions as low as 1% and as high as 12%.
However most agents are not actually allowed to negotiate their commissions. The brokers set their brokerages policies on commissions, not the agents. Top producing agents pretty much have purview to do what they want, those of us in the top 1% of the profession. A typical run of the mill agent likely does not have that perview. Most of the good agents will probably just blow you off when you ask. No reason for them to spend their time earning less when they can spend that time earning more. Agents who are desperate to make a sale though will likely jump at the chance to get any client they can.
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