Realtor says I (the buyer) have to pay part of commission

16 Replies

So I'm interested in buying a home to rent out. Its under 50K and the selling realtor texted me and said her client is only paying 3% of the sales price and that her minimum fee is $1500 and that I have to pay the difference if 3% doesn't cover it. Is this right? What about the buyers agent commission? Is she trying to take advantage of me?

BTW I haven't signed or agreed to anything with her and I don't think she knows I have an agent. I haven't said I do yet.

My minimum is $5k, so I dont think a $1500 minimum is too bad.

Expect on very low priced properties that if you want to use an agent, you will likely need to pay them out of your own pocket due to the price point.

Why would the selling agent know your number to text you if you have an agent? Write your offer, through your agent, and let the seller decide what they want to do.

@Benjamin Pifer If this is advertised on MLS or elsewhere, I would think this would have to be clearly disclosed as an additional fee to the buyer.

If not, it could be an advertising or consumer protection violation, depending on how VA law is written.

That said, the amount doesn't seem at all unreasonable.  There are a lot of agents who wouldn't even touch a property so inexpensive.  The sales and marketing process is pretty much the same, requiring the same time and effort to get contracts signed and negotiated, etc.

Don't forget, the agent likely has to pay a sizable chunk of that $1500 to his broker and possibly franchise and marketing fees - not to mention E&O and his own overhead.

This has nothing to do with the seller......other than having a week listing agent who knows many agents won’t work at this level at 3%.
This is the Buyer agent simply saying.....it’s not worth my time to do a deal for less than a $1500 gross commission....so if you want ME to represent you, then you have to make up the difference. Perfectly understandable.

This was all about the selling agent saying this. Not the buyers agent. Can anyone answer my questions on whether the selling agent is just trying to get me to pay what the seller won't? And is this negotiable when I actually offer?? Thanks.

Yes it is simply the sellers agent asking you to pay part of their commission. No you do not need to pay the cost and you simply put in your offer without any reference to a payment to the sellers agent. The sellers agent is obligated to present your offer to the seller and it will be the sellers decision to accept or reject the offer. Worse case if your offer is rejected counter with a higher number to cover the additional payment to the sellers agent. The seller can then pay their agent the entire $1500 themselves if the accept your counter. Make it clear in your counter offer that is what you are doing. If it is still rejected you simply walk away. 

FYI. Part of your issue here is terminology. Selling agent = buyers agent. Listing agents represent sellers.

@Benjamin Pifer you don't HAVE to do anything. Write the offer how you want. For example, you can offer $40,000 and state in your offer that seller pays all seller agent commissions. If you work direct with the sellers agent, it will be less commission expense than if your agent is involved. I am not telling you to cut your agent out of the deal, but on sub-$50K deals there isn't much meat on the bone to pay two agents. Your agent may willingly bow out or may agree to some small flat fee to represent you. In a case like this I think it is reasonable that the seller pays all sellers agent commissions and you pay buyer agent (should you involve them). 

It is kind of annoying that the sellers agent would expect you to pay their fee for representing the seller. In my opinion the seller should just be paying a flat fee and they need to keep that in consideration when taking an offer.

You don't owe anything to the LISTING agent, they represent (and are paid by) the seller.  It is perfectly acceptable for her to have a minimum commission, but that is paid for entirely by the seller.

The BUYER'S agent may also have a minimum commission, and if this is clearly stated in the buyer representation agreement that you sign with them then you would be responsible for making up the difference between the co-op commission offered by the Seller and this minimum.

As Russel stated, check your terminology.  In many parts of the country a "selling agent" refers to the agent representing the buyer (as opposed to a "seller's agent", who represents the seller).

Also want to second what Jason said - you shouldn't be communicating directly with the seller/listing agent in the first place if you already have representation.

the answer to your question is ...yes the agent is trying to play you. The agent wants to get their full fee. So if that agent wants you to pay them out of your money then do two offers one without paying the fee and one where you reduce you price by 2 times the fee.

Good info. The reason why I was talking with the listing agent is because I went and looked at the house spur of the moment. It was pretty far away and I didn't want to make my realtor drive even further than I had to just to look for 5 min. (i know it's their job to show me listings) given the situation i just went alone. But in any case, next time I'll ask my realtor next time and Every time to show me the property. 

You can avoid this by using a different agent. Or just not use agents at all.

This probably varies on the area. I’ve bought several 50k type properties and will be buying many more. Never had this issue. I think the reason being that there are a lot of properties in this price range where I buy.

Hence agents are fine with it. As a buyer ill probably never want to pay for a commission. So far I think the only thing I’ve paid was like a hundred bucks to my agents brokerage for some sort of service fee. That’s fine, but not a commission.

Originally posted by @Benjamin Pifer :

This was all about the selling agent saying this. Not the buyers agent. Can anyone answer my questions on whether the selling agent is just trying to get me to pay what the seller won't? And is this negotiable when I actually offer?? Thanks.

Whenever I've done a real estate transaction (buying or selling), my agent wanted to be kept in the loop by having all communication with the other party go through her. Otherwise, how could she do her job properly? On those few occasions when someone from the other party contacted me directly instead of going through her, I let her know immediately so she could deal with the matter.