Buyer pays realtor for investment properties?

Question

I’m a realtor and I have a few clients that are looking for investment properties....I’ve recently talked to a wholesaler, but he specifically said that he doesn’t pay for buyer agents, if you want the deal, you have to negotiate for your commission with your buyer!

Is this common?

How much commission should I negotiate with my buyer?

I’m newbie, that’s why!;) thanks for all your help in advance 😘😘

Is this common?

How much commission should I negotiate with my buyer?

I’m newbie, that’s why!;) thanks for all your help in advance 😘😘

Russell Brazil · Answer

Charge what the market will bare. The market sets prices, not individuals.

Jason Hendrickson · Answer

@Steve Vaughan Oh boy, as an agent you certainly cannot tell your buyer the price is $103k if the price is actually $100k just so you can get a $3k commission. You can tell them the price is $100k and that you will charge a $3k commission, however. Might not seem like a big difference but if you value your real estate license it's definitely a big difference.

Angie Shires · Answer

@Loan Tran our commissions are paid by the seller, but it’s built into the sales price...the buyer is the one that pays it...explain that to your client and they shouldn’t have a problem paying you for you time, knowledge and protection.

It’s never a hard sell when you actually explain it, although it sounds like it would be.

Mike Cumbie · Answer

HI @Loan Tran,

Same as a FSBO, if the seller is not willing to pay for a buyers agent commission then you have to let your buyers know "I located a place that fits the criteria but you would be responsible for the commissions if you purchase it". I don't stop matching people to properties, just might have to adjust where the money comes from. Your buyer can still adjust their price to what fits for them.

Steve Vaughan · Answer

Buyer pays realtor?  Most don't realize this,  but the answer is YES, ALWAYS.  Commissions are built into the price.  Proceeds from the buyer's purchase  pays the agents.

So just build your comp into the price.  Example-- wholesaler price is $100k including their fee.  Tell your buyer the price is $103,000 If you seek a $3k commission.

$3k may be too low. Now you have 3 parties to monitor plus a unique contract with a wholesaler that may or may not be selling a legit deal and most likely wanting a non-refundable deposit and  to close all cash within days.  As a fiduciary, you are on the hook if it doesn't work out.

Only the very experienced should broker or deal at all with wholesalers. Buy it yourself or don't do it is my advice.

Wayne Brooks · Answer

It’s like any other offmarket/fsbo where the seller won’t pay a commission.... you have to get an agreement from your buyer in those cases. I did 4%.

There are many other issues  buying from a wholesaler though.....

Brian H. · Answer

@Hemal Patel

Cassi Justiz · Answer

As long as you are up front about your buyer paying their side of the commission, most experienced investors won't have a problem with it as long as the numbers still work for them. Just make sure you are explaining that if the seller is not willing to pay the commission then it will be factored into the total acquisition cost to the buyer. Some people will set a minimum dollar amount so you aren't moving really low price point properties and not making a profit.

Tony Gunter · Answer

@Loan Tran

IMHO it has more to do with the property being offered by a wholesaler than anything to do with working with an investor. Standard verbiage from any wholesaler. If it is listed on an MLS works the same as it usually does, regardless of anyone being an “investor”.

As others mentioned, approach these just like a FSBO.

Gabe Waldrep · Answer

This is common. I have helped a few investor clients purchase wholesale deals, and we always have to add my commission on top of the price. Most of my investor clients are repeat buyers, so I don't charge them the normal 3% realtor commission. It's up to you on how much commission you negotiate. For me it depends on how much business I expect from them and how many properties we have to view per deal.

Buyer pays realtor for investment properties?

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