What's the going rate/rebate for buyer agent in Seattle now?

Question

I've purchased a few investment properties in Washington State and now I would like to invest more in the Great Seattle Area. Obviously the traditional 3% commission of the buyer agent takes up a big percentage of profit (if you consider the later 6% commission cost to buyer agent and listing agent in sale of the investment property).

So I would like to check what's the going rate or rebate of buyer agent for residential real estate and commercial real estate respectively in the Seattle Area?

Joel Owens · Answer

Stepping over dollars to pick up pennies.

Investors often focus on the wrong thing. Leave the broker/agents money alone. Good deals are hard to find.

Serious investors pay brokers and agents well to find deal after deal.

The other investors playing games do not even get a call back.

Mark Holencik · Answer

I must be missing something.

What difference does it make to you? It comes out of the sale price on the seller's end.

David Sun · Answer

Some agents here are just trying to mislead newby investors.  It is totally legal that your agent refunds a portion of his/her commission to you, at least in Washington state!  Department of Justice even has a memo on it.  For residential property, most if not all information is public on MLS or redfin.  If you as an investor need to rely on an agent to find a deal for you, you have not done your homework and need to rethink your career.  Agents, pls don't over emphasize your capabilities.  Investors can do all searching, pricing, valuation, and even more.  We just don't have time to get the realtor license, which only requires a high school diplomat btw.

After interviewing with several brokers, I picked one broker who only retains 1% up to $6,000 and refund the remaining commission to me as rebate.  The rebate can be used to reduce closing cost, purchase price, loan amount.  So for a $400k property, if the buyer agent commission is 3%, I will receive 2% or $8,000 as rebate, which is sufficient to cover my hard money lending cost and even lower the purchase price a bit by using the rebate.

I have done several deals with the agent.  It's not just fee.  This agent is very professional, knowledgeable and spontaneous.  She can reply to my email 24/7, which is a blessing for me as the timing is the key to find and negotiate a deal.

I don't want to make this as an ad.  Just want to let every investor know that you can request rebate from your agent.  If you want the contact of my agent, please pm me.

Dan Marl · Answer

Hello David. I know this is an old thread but I am in a similar situation as you. The buying agent said he will give me back 1% out of the 3% that he is getting. This is his method.

1. Let's say he gets 10k in commission (the 3%)

2. He paid his broker 1k (now we have 9k left)

3. He gives me 1/3 of 9k. So I get 3k.

4. He says he has to pay tax on the commission so he deducts 25%. I get $2,250.

Did your agent use this method?

Andrew Hill · Answer

There are a lot of ways to answer this. Simple answer is that any broker should be flexible and commissions are negotiable. Shoot me a PM. lets talk about it. Our firm is an independent brokerage, not a team under an umbrella. We can certainly work something out that works for both of us.

Christopher Phillips · Answer

I think the confusion comes from the fact that people hear about commissions, but don't realize that the seller is paying for those expenses out of their proceeds at closing, not the buyer's pocket.

Not sure why buyer's think they are paying commissions. In general, it's got nothing to do with them.

One exception would be if you're buying a FSBO and the seller refuses to pay commission to the buyer's agent. Then the buyer would have to pay the agent's commission.

However, there are agents in parts of the country that advertise that they will rebate part of their commission to buyers. Essentially transferring some of their fee to help with closing costs.

This is a dicey issue. One, if a seller is offering out less than the prevailing rates, buyer agents are getting reduced commission and still handing some of it over to the buyer as a rebate. Also, listing agents don't always split commissions with the buyer's agent 50/50. Sometimes it's more like 66/33. Sometimes less. I've seen some shortsales paying out 0.5% to buyer agents.

Not all states allow it. Those that do, have rules on how it has to be handled.

Patrick Britton · Answer

@David Sun Firstly, i must disclose that everything is negotiable, especially commission rates.  However, standard rates range between a low of 5% to high of 6.5% total.  Typically, the rate will go down in very hot or expensive markets, but not always.

I tell my folks if they list back with me to assume 5% total.  Hope this helps.

Tatiana Gershanovich · Answer

I can't say anything about commercial real estate, but in residential you can get away with 2.5% in very hot areas, but not less than that. The agents just won't show your property to their buyers.

If you want to save on commission when you are selling, you are better off saving on listing agent commission (of course it's not for everybody).

What's the going rate/rebate for buyer agent in Seattle now?

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