Buyer and seller commissions?

Question

We want to purchase a HUD house, which we are trying to do through the listing agent.  The problem is, the buyer and seller's commissions are 6%, a total of 12,000 dollars, which has greatly increased the price of the house. We are very interested in the house, but this amount is making it unaffordable.  The agent said that these fees are non- negotiable.  Is there anyway to make this lower, perhaps with another agent? We really would like the house. Any help would be great! Thank you.

Greg H. · Answer

@Keith Hefner

Keith this is absolutely positively NOT the case and I could provide several hundred settlement statements to prove it.  As a Broker, I buy several HUD homes each month and I always put $0 for the selling agent commission as the selling agent can input a $ value from zero up to 3%(or the $1250 minimum commission in some cases) .  The listing agent commission field cannot be modified or changed in any way.  HUD is only concerned with the Net bid amount to HUD.  There is actually no way to put in an "erroneous" bid dollar wise as the system would not allow the submission

Greg H. · Answer

@Wayne Brooks

While I agree with you, I was responding to the  question of the agent commissions are non-negotiable.  As a Broker, I would sell my value to the transaction and not make a false statement as no doubt you would as well

Russell Brazil · Answer

@Salley Smith if going from your agent making 3% down to 2% is really going to make that big of a difference for you on buying this property...maybe you shouldnt be buying this property.  Either the true margin is not even close, or you are way overestimating the true impact of 1%.  If I were your agent, I would not take the reduced commission.

Keith Hefner · Answer

Well, the buyer's agent commission is negotiable, the overall commission is not. On a HUD they pay 6%, no matter what. If the buyer's agent decides to only take 2% the listing agent makes 4%. Also if 3% makes a huge difference in your profit margin, then you should consider another path. Also, if your agent puts less than a total of 6% on the HUD bid, then HUD will consider the bid erroneous, and move on to the next bidder. The biggest part of getting a HUD bid is having everything complete and accurate. So, you should find a good agent that works for you directly, not going to the listing agent, if he is servicing the HUD contract, even though he must treat you fairly, his ultimate allegiance is to HUD.

Salley Smith · Answer

I understand. It seems like the only negotiable part is the 3 percent of the buyer's commission, however, it is only really possible to cut that number down to 2 percent or so.  I guess I was thinking since we were going through the listing agent, that they wouldn't need to charge both the buyer's and seller's commission.

Wayne Brooks · Answer

A 2 or 3% difference is not the difference in whether it's a deal or not.

Salley Smith · Answer

Ok, how can I find someone who would adjust their commission? I don't quite understand what you mean by as a broker the selling agent commission is always 0.  Thank you.

Greg H. · Answer

The listing agent commission is non-negotiable on a HUD.  The selling agent(Your agent) can adjust their commission in the bid process

For instance, as a Broker the selling agent commission is always $0

Buyer and seller commissions?

Most Popular Reply