@Michael Letts and @Tony Clark - Tony is correct that the seller and the agent's brokerage (I am with eXp, so that's my brokerage/company) negotiate the commission amount (let's say 6%) in the listing agreement and within that listing agreement the representing agent agrees to split the commission in a specific way with any buyer who brings an agent (let's say 3%). Once that listing agreement is signed the seller and brokerage are in contract for those specific amounts for the benefit of the seller to be represented in their home sale transaction. (Yes, it can be renegotiated, but more on that in a minute.)
If an unrepresented buyer such as yourself comes into the transaction and the seller accepts that offer, they are still in contract for the total 6%. A lot of times agents will put special stipulations into their listing agreements that state: "If Ashley Salisbury is the only agent involved in the transaction, commission to be a total of 4.5%." Which is still less than what the seller would pay if there was a represented buyer, and the listing agent gets more than a typical split sale. This is fair in the sense that even if you're unrepresented, we as Realtors have an ethical duty to manage the process for our sellers, and we're then doing the actual work of two agents, even though we only represent one side.
Additionally, even though dual agency is legal in the state of Tennessee, it is very difficult. I, personally, do not feel I can give fiduciary representation to two sides of a same transaction. I want the seller to get the most money they can at closing, and I want the buyer to get the repairs done they want. I can't do both of those things at the same time, which is what dual agency would require. What usually happens instead of dual agency is that an agent would then negotiate to become the 'Facilitator/Transaction Broker' where they don't represent EITHER party, but just make sure the transaction goes as smoothly as possible. The agent would not give advice to either side once there is a change in agency status. Regardless of this change in agency status, negotiating the commission amount agreed to by the seller on the listing agreement is still only done between the agent/brokerage and the seller. In this current market, I would not advise my seller clients to give up representation to 'get the deal done' so that they could pay less in commission and net more at closing. If they were to wait 24 hours they'd probably get an offer that would still net them more.
As a listing agent, I advise my clients when we sign the listing agreement that a buyer have representation, and that I do not advise them as sellers to give up having me represent their fiduciary interests. Even if I agree to take less commission as a sole agent on the transaction, they would end up losing out on my years of experience and advice during negotiations before going under contract and afterward, unless the buyer remains unrepresented. I would rather refer out the buyer to another agent in my office, possibly have that agent pay me a referral fee for the client from their split after closing, and still represent my seller with all my might.
Conversely, I also am not a super big fan of representing a buyer on a For Sale By Owner property because we as agents also end up doing the work of two agents, but we do what we have to do for our clients! Buyer representation agreements also state how much a buyer is willing to pay in a percentage amount to the brokerage IF a commission split is not negotiated on the buyer agent's behalf. If the Buyer agrees to a total of 3% to their brokerage, but the seller is only offering 2.5%, the buyer will need to make up that .5% difference in commission at closing, so pay attention to that when you sign a buyer representation agreement!
Michael, I hope this helps you understand how agency works in Tennessee.
