Sure, it’s always negotiable. Whether or not you can actually get anyone to negotiate it would depend on a couple of things –
how hot your local sales market is.
how competitive the market for real estate agents is (are there a lot of agents fighting for the same listings?)
the agent’s individual level of motivation and need to do deals
I also expect that volume could be a factor that would motivate a realtor to consider negotiating. If you’re going to move a bunch of properties using an agent, you would obviously have more bargaining power than someone who sells one house every five or ten years.
As to the bonus - sure, you can offer realtors whatever you want. However, an agent has a fiduciary duty to the seller to get the highest price, and giving you the property before it goes on the open market might be construed to violate that duty. I do not expect that this would be a problem if you are paying full asking price for the REO’s and the agent is merely giving you the opportunity to pay it FIRST.
Posted by IB (NJ) on February 21, 2001 at 14:12:43:
I know the going rate for Realtors is 6% when selling a home. Is that negotiable and under what conditions?
Also, do you think it’s a good idea that I offer a $500 bonus to Realtors who find me profitable REO’s. Is it legal? I’m asking becuase it’s very competetive out here in NJ and I need to generate a better response from Realtors.
Posted by ken in sc on February 22, 2001 at 07:38:01:
I am a broker so I can take my 1/2 commission off the price. But, the point is to get these people to bring you deals!
So, If a Realtor brings me a deal, calls me before it is on the market, or lets me know the moment he lists it, then I don’t negotiate commission. If I find the listing on my own, I always take my 1/2 comm. off the price. Therefore, the Realtor knows that if they call me first, they might make the full 6% comm. if the numbers work. Many times, they reduce it to 4 or 4.5% or even back to 3% if the negotiations are close in order to make the deal work. But it gives them an insentive to call me first.
IB, I agree with Nate’s comment regarding commission rates. The bonus MIGHT help, but what really helps is a track record. Once you do a few deals and are known as someone who can and will close, you’ll get more deals.Until you get the track record, it will be harder. Research closed REO deals and see who the selling agent was in each deal. That is the agent you want to work with if you can. If the same agent is selling multiple properties to the same investor(s) then you don’t have much chance of getting that agent to work with you. Careful analysis will tell you where the selling price is in relation to the actual value on these REO’s and who the selling lenders are. Once you have a picture of who the players are, you’ll know who to deal with or not.
Re: Commission for Realtor? - Posted by David Krulac
Posted by David Krulac on February 21, 2001 at 15:27:46:
ALL commissions are negotiable, around here commissions are from 5% to 10%.
Bonus can also work when either buying or selling. If you are buying perhaps you want a buyers brokers agreement just so that your agent is working for you and not the seller.