Utah - Curious about agents commissions on investment deals

Utah - Curious about agents commissions on investment deals

Realtor · Orem, UT · Member since 2018 · 10 posts · 7 votes

Hello all, I've been on bigger pockets for a while now, mostly reading and picking apart conversations and ideas. I've always been intrigued by the creativity behind different types real estate deals and decided to start by getting my license and join a small brokerage in Provo, UT (I'll be active as soon as my fingerprints clear.. hopefully it doesn't take too long) and I'll be able to hit it full time in a few months after my corporate job winds down. I know it's an interesting time to get into real estate but I still see a good opportunity, especially in Utah. 

My question is in regards to commissions charged on investment/cash deals. I'm assuming it's not the standard 6% like retail transactions, but I could be wrong. Do investors generally negotiate commissions if they receive help from an agent? If so, what is the standard "discount" for frequent buyers and sellers when using an agent? Maybe it depends on repeat business? I'm open to working with all types of sellers and buyers and currently have wholesalers sending me properties regularly and understand that investors are looking for the best ROI possible.

Any advice would be greatly appreciated! 

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  • Investor · Provo, UT · Member since 2016 · 130 posts · 168 votes
    6y

    On the buyer side - Representing buyers takes a LOT of work compared to sellers, so I'm always at 3% BAC.  I've never had one of my investor clients ask me to reduce my commission when we are out hunting.  The only times I've done a deal for less is when an investor I know comes across a deal on their own and they ask me to transact it.  In that case, since I didn't have to do the work finding the deal, I'm always willing to drop to 2% or even 1%, depending on what is needed.  My repeat clients do not get discounts on the buyer side--they repeat because they feel they continue to get 3% and more of value (plus the aforementioned work).

    On the seller side - This depends on the market. In an easy market like this, I often discount my listing side fee. When I had a client liquidate a portfolio of a dozen townhouses, I did it for 1.5% each on the listing side.  During the recession, I was 3% all the time, sometimes 4%, since I had to deal with banks and short sales.  I still try to always keep the commission offered to a buyers agent at 3% though, for the workload reasons.

    So add those two up and you'll get the total listing fee.

  • Realtor · Orem, UT · Member since 2018 · 10 posts · 7 votes
    6y

    Thanks Jeremiah, that makes perfect sense. I appreciate the detailed response.

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