Bank doesn't pay commission to agent/buyer?

Question

So, several months ago we put an offer in for a property at 87,900 (it was just reduced to 112,000).  They countered at 110,000, so we decided to end negotiations at that point in time.  Weeks later it was reduced to 99,900 and recently 94,900 so we resubmitted our offer at 87,900.  The sellers agent replied via email, stating the seller does not normally pay commission to the buyer agent if he/she is buying the property for him/herself...has anyone heard of such a thing?  Keep in mind this is a two person LLC and the agent also works for a broker.  Other than the commission (2.5%) we are pretty sure they are willing to accept the offer.  I would love to hear thoughts on this.

James Vermillion · Answer

J,

Thanks for your response.  I agree. The 2K isn't going to change much and we are fully willing to work with the bank, I had just not seen this before. We are going to talk with them tomorrow and may adjust our offer, or we may press forward with the previous offer minus commission.  I find it fascinating that they could have sold us this house several months ago at the same price...another issues I have seen with the banks (it is no wonder many of them are in the positions they are in).

J Scott · Answer

I wouldn't say this is typical, but I've certainly seen it before.  Of the two dozen or so REOs we've purchased, I think there was just one (maybe two) where we were told we wouldn't get a commission on the purchase because we were buying for ourselves.

If the $2000 is going to impact your numbers, just deduct it from your offer price and see what happens.  Of course, if it's a good deal without the commission, why risk it for $2000? (my wife and I would strenuously disagree on whether to renegotiate lower or just accept the fact that we're losing the $2K, with me being the one to just let the $2K go)

James Vermillion · Answer

John, I agree entirely.  The MLS comments only said 2.5%, there was no mention of buyer/agent being any different than any other buyer.  This is the first time we have come across a sub 3 in our area as well...but we are willing to sacrifice some commission to get the deal done, just not the whole thing!

John Chan · Answer

Here in the Cincinnati market, I've also ran into MLS listings where the bank is not paying a commission to buyer/agent. It's usually the smaller/non-nationwide lenders doing this, never the JP Morgans and Bank of Americas. It's completely legal as long as it is stated in the MLS remarks.

BTW 2.5% is already a rip-off commission for a foreclosure. I usually see sub-3 percent commissions on short sales and FSBOs.