Hi - I have started buying LTR's in the last few years. I plan to buy and sell 10 or so more over the next few years. It seems to me that if I were the agent on the buying/selling side of these, I would save 2-3% on each deal (typical agent commission for each side). Am I missing something here?
You’re absolutely right in thinking that if you’re the agent on either the buying or selling side of the deals, you’d save on the commissions for that side. Typically, real estate commissions are around 5-6%, split between the buyer’s and seller’s agents. So, if you’re handling either the buyer’s side or the seller’s side, you’d save around 2-3% on each deal, depending on which side you represent.
However, there are a few things to keep in mind:
1. Legal & Disclosure Requirements: Even when you’re only handling one side of the deal, you’ll still need to make sure you’re properly licensed and comply with all local real estate laws. This includes disclosure requirements and acting in a fiduciary manner, which is still necessary when you’re representing just one side.
2. Time & Effort: While you save on commissions, you’ll still be responsible for handling all the paperwork, negotiations, and other tasks associated with the transaction. It might not be as much work as doing both sides, but it still requires your time and attention.
3. Negotiation Power: Whether you’re buying or selling, you need to ensure you’re making smart decisions and not overpricing or underpricing the property. Even if you’re saving commission, you still want to get the best deal possible.
So, in short, yes—you’re not missing anything major. You’ve identified a solid way to save money on commissions by handling one side of the deal at a time. Just keep in mind the extra responsibility that comes with being the agent and ensuring you’re making the best decisions throughout the process.