that thing about 5 houses a year… - Posted by Anne_ND
Posted by Anne_ND on March 09, 2006 at 17:05:57:
…only applies if you are selling them in your own name.
If you’re selling 5 houses a year chances are you are owning them in some kind of entity or trust or partnership.
Anne
I disagree - Posted by Gene Hacker
Posted by Gene Hacker on March 09, 2006 at 14:42:39:
I will try to adress your points…
>>>>>In most states if you “hold yourself out to the public as a person selling real estate” you are required to be liecensed with the State. The state doesn’t approve of just anyone to be trusted with such a weighty matter as the sale of someones personal residence. Have a felony? You’re out. Been in a mental institution for any period of time? You’re out. Been involved in embezelment of any type? No license for you.>>>>
I am not talking about a website based service that acts as a realtor. More like a new way of bringing buyers and sellers together.
>>>>>The MLS is not a unified system. It is owned, maintained, and administrated by the local board of realtors. Some are more broad than others. VA, DC, MD and DE are all under the MRIS system. Michigan on the other hand has multiple systems for different areas.>>>>
I agree, the MLS is the main tool that realtors hold to keep a monopoly on the system. But I think (and hope) that a better system will be created which will being buyers and sellers together.
>>>>The MLS is not just a simple advertising medium either. The listing ticket is considred a valid contract between brokers. If you put 3% to buyer’s agent on the listing ticket, it WILL be delivered.>>>>
Agian I agree, but there are many websites that the deal is considered a contract…ebay, bid4assetts, ect.
>>>>>90% of properties are listed on Realtor.com anyway…so in essence, you can do your own search yourself. The search tools just arn’t as advanced. However, you can’t just go buy those properties, you do have to go through an agent.>>>>>
True, but because you will need to go thru an agent anyhow, it is of limited value. Pretty much just “window shopping”.
>>>>>>As to the analogy of travel agents:
A)Travel Agents are still relied on by people that want service. Like me. I’m only 26 years old, so I don’t remember the days where you have to have a travel agent to go anywhere. My first recollections of dealing with travel issues is Priceline. Before that it just wasn’t an issue for me. Still, I prefer an agent. Why? Because you don’t pay THAT much more, and I want to deal with REAL PEOPLE. I hate calling the utility company and talking to a “computer person” I just pound zero till I get to talk to a representative. Same with travel. I want to talk to one person that can take care my flight, hotel, and rental all in one kit-n-kaboodle. So they are not “outdated”>>>>>>
I disagree. Travel agencies used to be the only option. Now its easier and less expensive to go at it alone using one of the many online resources. I think that most folks that still use Travel Agents are probably not computer literate, or they would go at it alone.
>>>>>B) Travel agents arn’t licensed like Realtors. I can walk into a travel agency today, get a welcome aboard brief, and weeding through customers tomorrow. Not so with real estate.>>>>
I am not sure about what it takes to be a travel agent. But I do know that becoming a realtor is not at all hard. My sister became one, and said it was a joke.
>>>>>>>>C) Service: Service is the lifeblood of the real estate profession. Sellers that pay less commission get less service. By default. There will never be an “expedia.com” of real estate, because a computer cannot negotiate price or terms. >>>>>>>
Realtors don’t do the negotiation…they just act messenger between the two parties. Any website can do that.
>>>>>>>A computer cannot evaluate millions of different properties and account for each and every one’s differences (a computer can do this with hotels through ratings, reviews, and price comparision).>>>>>>
Are you saying that this is what realtors do? You gota be kidding me. This comment is just over the top for me.
>>>>>>>>>>Introduction of a “better way of selling/buying” is highly unlikely because you would first have to change the laws of the states to allow someone other than an agent (a giant online conglomerate) be trusted with selling someones home. I’d love to see that happen. Esp with the loby power of the board of realtors comming to play. It’s like the teachers union. Well…not that bad.>>>>>>
Again the sellers and buyers would work together. The computer wouldn’t be selling the home…just facilitating the FSBO.
>>>>>>>>>>I agree with you on your intro point though…if you don’t work with an agent that knows what you are doing…the ball can be droped, blow your deal, and cut a chunk out of your profit. If you have the time and also have a plan in place to move your properties yourself…sell them yourself.>>>>>>>
There are a few realors that I work with that do great work. The problem is I cannot choose the other realtor (eg. the buyers agent if I am selling, or the listing agent if I am buying). This is where the problems often lies.
I welcome change.
Gene
Re: I didn’t work for the seller - Posted by Frank Chin
Posted by Frank Chin on March 09, 2006 at 07:48:22:
Brian:
I see a provoked a discussion, and thought I pass along a few addtional comments.
In the transaction I described, where the agent appeared to favor me, the buyer, over the seller, it appears business factors, rather than who paid the commission, or ethics, that came into play. The seller paid a 6% commission in this case.
The seller’s employer relocated him to Texas from NYC. The agent’s office was located a few short blocks from the property. It’s a multi where there’ll be a constant source of commissions when tenants move in and out. And, someday, I’ll even be selling the place.
So, I’ll be the one buttering her bread from here on in, not by the seller in far away Texas.
I thought the property was sold at “way below market” at the time, as it was asking 160K, and I made an offer a week or two before for an exact same sized property for 190K, in a neighborhood not as good. I looked for six months, knew it was a good deal, and pounced on it.
Since I knew it was a good deal, I got on her good side, noting all the future business that could be had, if “I was the owner”, if she hadn’t thought of it already. Apparently, it already crossed her mind.
Based on this, I’m always careful in dealing with agents as I’ll never be sure if it’s my interest they have in mind, particularly, if I’m moving far away, and won’t be “buttering their bread” in the future.
What’s very funny about this deal also was she had another buyer who saw a place a day before me. But this guy was greedy, tried to negotiate directly with the seller, cutting the agent out. And how did we know this??
This guy was dumb enough to ring the seller’s doorbell, and discuss it with the seller out on the street, and with his dumb luck, the agent bought us over to show the place while they were talking. She screamed at the other buyer, and chased him away. Then, got the seller to admit the other guy tried to talk him into waiting for the listing to expire. But, little did the buyer knew that it didn’t matter, because she showed the place, and the fact the listing expired will have no bearing.
So, she bulldozed the seller to accept our 150K offer, which we didn’t think would fly, and also, include ALL the appliances on the house, which the seller had originally tried to take a few. And she was in a rush to get me my offer accepted before the seller had any other funny ideas.
It sure’s a “dog eat dog” world out there.
Frank Chin
Re: I didn’t work for the seller- I doubt it! - Posted by Jack
Posted by Jack on March 03, 2006 at 19:29:58:
Who paid your commission? The buyer? I doubt it. It most likely came from the seller’s funds. So who do you really work for or should be working for? Who pays you is who you work for.
That’s Crazy - Posted by Downriver Brian
Posted by Downriver Brian on March 09, 2006 at 09:35:45:
I think you’re right about “dog eat dog” world. I havn’t run into any crazy situations like that yet.
Havn’t had anyone try to “cut me out” of anything.
I guess that the agent in this case got a little emotional and started taking things personnaly which would be understandable. If she was doing all this work, she doesn’t deserve to get cut out of a paycheck.
I wish people would just do what right…it’s pretty easy to tell if you are doing something shady. When buyers run some werid “creative” type of things by me, I always have my guard up.
Not that I’m against being creative…I’m the only agent I know of that will put in the contract the EMD is due FIVE DAYS before closing. (state law is 48 hrs unless negotiated otherwise…I’m the only one that does the “otherwise”) But I always try to make sure people arn’t pushing past the “grey areas” of REI into the “no no” areas.
Re: I didn’t work for the seller- I doubt it! - Posted by Mark (SDCA)
Posted by Mark (SDCA) on March 05, 2006 at 18:18:31:
It’s all semantics… Where do you think the seller’s funds came from? THe buyer’s down payment maybe??
Not According To The State Of Michigan - Posted by Downriver Brian
Posted by Downriver Brian on March 03, 2006 at 19:55:49:
In my state, if you have a Buyer’s Agency Agreement, you represent the Buyer and their best interests only. If it’s good enough for the State, it’s good enough for me.
You want to hear “crazy”?? - Posted by Frank Chin
Posted by Frank Chin on March 09, 2006 at 10:54:44:
Brian:
I might also add that I was told the other buyer who tried to cut her out then tried to submit another better offer through her. Later on, she told me that she told the guy to “stuff it”, and said she don’t want to dealt with someone so “unethical”.
My sense was, she was mad, and was teaching this buyer a lesson. And who was I to say anything, since everything lined up so perfectly for me. And she was a big intimidating women, the seller, a mousy little guy, so who was he to complain.
I just happened to be chatting about this little episode with my attoreny when he told me of another similar case with this very brokerage where they’re suing a seller for commission, and he was called as a witness. Apparently, some agent showed a property, the buyer and seller waited for the listing to expire, went to contract, and denied that the agent ever showed the place.
I recall its not often around here that agents asked potential buyers to sign anything to the affect that they showed the place. In fact, I tried to sell an out of state property, listing it through a realtor. The listng expired with the place UNSOLD, and I was going to do FSBO, and asked the agency for a list of people they showed it to, so if anyone shows up on the list, I can notify them so they can get their commission.
I was trying to do the right thing.
After one written, and several phone requests, I got nothing, so I wrote them finally saying that since they cannot furnish me such a list, they’re entitled to “no commission” if I sold the place. I still heard nothing.
Just then, someone wanted to rent the place, stayed, and moved out 3 years later. Then I sold it getting over 90K for the property, rather than the 66K listed through the agency several years before.
I was told the original agent I used was rather lazy, didn’t market it properly, and I didn’t really stay on top of things as I was out of state. BUT the wonderful thing about real estate is if you wait around long enough, even messups like this can make you money.
So, I’m not complaining.
In fact, I’ve heard many comments about house wives getting listings, then depend on MLS to sell it, and this was the case here. Apparently, this realtor was recommended to me as she’s the sister of the managing agent for the condo.
Some years later, I listed a SFH thru an agency, another house wife. After she got the listing, and whenever I would call her, she’s on the way picking up the kids from school, on the way to the ballgame etc., and she’ll check things out. Then, I would get a call back from the “secretary” at her office, asking “what is it that I needed”??.
She also failed to sell the place, then 9/11 came around, which gave me an excuse to cancell the listing. It was listed for 249K then, I still got the place, and the town just notified me, according to them, its market value is 375K. As they’re always a year behind, I figure it’s worth around 400K, give or take.
Thank God for these agents that can’t sell anything.
But the funniest story about agents is this. One rental agent held an open house for the SFH mentioned above. Since it was for several hours, we started talking, and she said she’s been an agent for around 10 years, and struggling with a daughter to raise. She said “I’ve been at this for about 10 years, I haven’t figured out how people make money on Real Estate”.
If I didn’t have the house “freshly painted”, I would’ve banged my head on the walls.
Frank Chin
Re: Not According To The State Of Michigan-So? - Posted by Jack
Posted by Jack on March 05, 2006 at 15:54:24:
I have no objection to a broker working with a buyer as a so called buyer’s broker, as long as the buyer pays him separately. Did he pay you separately or did your fee come out of the seller’s funds? If you got paid by the seller you morally, and it should be legally work for the man who pays you the seller. This should be true in any state even with the so called dual agency laws. This is just a court case waiting to happen. If he wins, the seller should get back at least the fee he pays you, unless he was dumb enough to sign such an agreement.
This is All Disclosed To the Seller - Posted by Downriver Brian
Posted by Downriver Brian on March 05, 2006 at 19:27:09:
Each and every property that is placed on the MLS in Michigan has three commission columns.
CBB - Commission to Buyer’s Broker, this is the amount paid to the Broker of an Agent that Represents a buyer with a signed Buyer’s agency agreement.
CSA - Commission to Selling Agent, this is the amount of commission paid to an agent working with a buyer (customer) but who represents the seller. In Michigan this is the default setup if the buyer does not request a Buyer’s Agency Contract and full representation from his agent
CTC: Commission to Transaction Coordinator, in the even that the agent workin with the buyer serves as a “transaction coordinatore” meaning he represents nobody, he is only handling the paperwork and offers no advice on the transaction.
Each of these three items have a coreseponding commission listing. If the seller only wants to sell using agents that represent him, then he put ZERO as commission to CBB and CTC. However most of the time it’s listed as 3% on all three. It is the responsiblity of the SELLING AGENT to go over agency with the seller and allow him to make the choices that best suit him.
Most tickets look like this:
CBB:3% CSA:3% CTC:3%
I.e. anyone who brings the buyer who closes on the deal will get 3% commission paid to the Broker of the Buyer’s agent (however it is split from there is between the agent and the broker)
In this case:
CBB:0% CSA:3% CTC:0%
It would mean that the seller has requrested that only buyers working with agents that represent them submit offers. If an agent working for the buyer submits and offer and it is accepted, the seller is under no obligation to pay the broker of the buyer’s agent any commission. This would hurt the seller because over 60% of buyers in Michigan request that their agent represent them and only them…so these buyer’s would never see the inside of this seller house because the buyers agent wounldn’t get paid on the deal!
Buyer’s agency is only about 15 years old in Michigan. It is a MUCH BETTER SYSTEM because before, 9 out of 10 buyers, when polled after they completed the puchase of their new home, said that they BELIEVED that their agent represented them when in fact he represented the seller.
In a straight seller’s agency state, the buyer is UNREPRESENTED…everyone is looking to get the most money for the seller, but it’s just a fact that is glossed over with the buyer when the initial meeting takes place. This is a BAD thing.
If the buyer wants someone to represent them, good. If the seller wants to have as many buyers come through his house as possible (which is double important in a buyer’s market such as MI is experiencing now) then he’d BETTER tell his agent to list the house with full commission to all Buyer’s Agents…it’s in his best interest.
When an offer is submitted on a house, I tell them that I am acting as a buyer’s agent. Am I considered slightly as “the enemy” by the seller? In some cases yes…in some no. It doesn’t really matter. The seller knows not to disclose to me anything I shouldn’t know, such “they have to sell today no matter what the price because the house is going into foreclosure”, because I would be bound to share that info with my Buyer.
It’s a better system when everyone has someone representing them in the deal instead of everyone tryin to screw the buyer out of as much money as they can get him for.
Remember, we are all buyer’s at one time. If we are selling one home, we are buying another.
If I didn’t have a license…I would want my agent to represent ME when I was going to buy…and work to get the lowest price on my behalf.
Nuf said.
Re: Not According To The State Of Michigan-So? - Posted by Natalie-VA
Posted by Natalie-VA on March 05, 2006 at 17:21:43:
I guess millions and millions of sellers are dumb enough to sign that agreement. As backward as it sounds, it’s customary for the seller to pay both agents even though one may be working for the buyer.
–Natalie
On the flip side - Posted by Downriver Brian
Posted by Downriver Brian on March 05, 2006 at 19:53:02:
I guess there are millions and millions of stupid buyers out there that are dumb enough to work with an agent that represents the seller and only the seller…who is working to extract as much money as possible from their pockets through every step of the deal.
It’s quite sick. Billy Buyer calls on a house he sees in the paper. Reggie Realtor is taking floor calls at that time and succeeds in setting up an apointment. He meeds with Billy Buyer, and after looking at a few houses they have a nice raport built up. Right about there Billy belives(incorrectly) that the agent represents HIM and HIS best interests. However…through the whole experience, Reggie is working for the seller.
Like I said earlier, from 1990 - 1994 (I think this is when the laws changed in MI) 9 out of 10 buyers believed that the agent they worked with represented THEM…when they in fact represented the seller. This is BAD because when raport is built up the buyer begins telling things that would strengthen the SELLER’s position! (“Reggie…I LOVE this house…I know it’s listed at $160k but I would pay $20k MORE than that to get the house because my wife loves it so much”)<<< A seller’s agent would betray this buyer’s trust and take that STRAIGHT TO THE SELLER! A buyer’s agent would GUARD that which was spoken in confidentiality.
And again…I repeat the fact that the seller doesn’t have to work with agents that represent the buyer…that’s FINE. If he feels that it’s in his best interest to cut out the 60% of buyers who are represented by Buyer’s agents…he can run around naked and FREE working with only Seller’s Agents. More power to them.
…of course…in MI there are 50% MORE houses on the market this month then in March of 2005. There are precious few buyers. These same sellers can sit and ROT on their precious Seller’s Agency Only Policy. I’ll watch as each and every month their price is reduced by ten thousand dollars until they are selling for what they bought for plus commission and closing costs. Can anyone tell me how this would benefit the seller?
Re: On the flip side- Great Example! - Posted by Jack
Posted by Jack on March 07, 2006 at 06:11:59:
This is a great example of the convoluted thinking that a lot of Relator agents have. If a Buyer really thinks he needs and wants a Relator to represent him, he should expect to pay him himself! If not,he is working for the Seller to sell the property to the Buyer. On the other hand why would any seller want to deal with a Relator who is working against him, and then have to pay his fee to boot? Defies all logic. I would venture to say that 90% of so of these sellers that you talk about who sign such an agreement, don’t really understand what it is all about or it has not been adequately explained to them and by the time they find out at the closing table it is too late. Your scare tatics are also imoral and more likely any additional benefit a so called Buyer’s broker would bring to the deal is useless. Buyer brokers just use this type of reasoning to justify their existance and rip off the Seller.
Re: On the flip side- Great Example! - Posted by Brian (UT)
Posted by Brian (UT) on March 08, 2006 at 12:41:40:
Jack
The mind of a cheapskate always facsinates me. My Scot ancestors would get a kick out of your reasoning.
Just because a seller is funding the buyers portion of the commission doesn’t mean he is paying the commission. If I buy a house and the seller pays his agent 3% and I pay my agent 3% and buy the house for $194,000 according to you thats fine, but if in my contract I pay $200,000 and as part of the deal have the seller fund my agents commission that isn’t o.k. even though the seller is getting the same $194,000. When I gradutated 3rd grade $194,000 = $194,000.
Secondly why would you or your agent want the additional risk of offering sub-agency. As a listing agent I have no control over what an agent from another office is telling the buyer. He could tell them the entrance to the “Lost Dutchman Mine” is under the house, or he guarantees the the property will double in 5 year and when it doesn’t you the seller and his agent will find themselves making up the difference. No seller or agent should take on that risk for no reason.
Thirdly, it was pure economics that started the traditional all agents represent the seller Bull.
When FHA and VA no down/low down loans came into existence the only party with funds to pay the commission usually was the seller, and as a result the commission was built into the sales price and even though the closing statement showed the seller paying the commissions, it was the buyer that brought the money to the table.
Then lender policies added to the mix. Let’s say I bought a $250,000 home. I’m paying my agent his 3% so I need to bring $7,500 more to escrow, but since I’m paying my agent and not the seller, my purchase price is only going to be $242,500. I want a 80% or $200,000 loan but 80% of $242,500 is not $200,000 I’m a little short. To get the full amount I need to raise the sale price &7,500 and have the seller fund my agents commission. The seller still nets the same, I still spend the same, no big deal, lenders could adjust and give 80% of sales price plus agent commission but that isn’t going to happen. So the seller funding the buyers commission is only part of structuring the deal, not a buyer stealing money from the seller pocket, he wasn’t going to get that money anyway, not unless selling a house makes you smart and buying a house makes you stupid.
Brian
Maybe it depends on the market… - Posted by Downriver Brian
Posted by Downriver Brian on March 07, 2006 at 06:40:19:
What in the world would do you expect the seller to do?
I don’t know what kind of market you live in, but in Michigan, it is a SERIOUSLY strong buyer’s market.
I have a friend that listed their property with a broker and in three months…they didn’t just get no offers…they got no SHOWINGS! Not even ONE. Buyers are scarse as it is.
Why would any seller, knowing this, tell his listing agent, “I only want buyers walking through with agents that represent me!” when six out of ten agents are signed to buyers agency contracts?
You’re cutting 60% of the potential buyers out! It isn’t in the best interests of the seller.
The seller pays his listing agent to list the property and negotiate in his best interestes. He pays the agent of the buyer (where under seller’s agency, buyer’s agency, or transaction coordinator) to bring him a buyer…that’s it. He pays to have some buyer…in this market, ANY BUYER to the table.
I can’t speak for other realtors as to how well they disclose how agency works…but it is a state law that before anything else is done, the agency disclosure form must be gone over and signed. BEFORE ANYTHING ELSE! They get a little booklet, just like the lead paint booklet, that goes over everything in detail.
I just don’t understand what you expect the sellers to do in order to sell there house. The chips are already stacked against them.
I wouldn’t be surprised if the same people that are raising the hue and cry against buyers agency would ALSO swear that using a discount broker, who charges 4.5% or less to sell the house, is a GOOD THING!
Let me address this one real quick. Let’s say that the agent negotiates the commission to a total of 5%. What do 90% of listing agents do? Split it down the MIDDLE!!! How crazy is that?
So when a the agent working with a buyer sits down to look for a certain type of house in a certain type of price range…but the buyer only has time to look at FOUR this Saturday…which listing ticket do you think he’s going to print up? The houses that are going to pay him 2.5% or the houses that pay him 3% or more?
Most sellers don’t understand how HUGE of an effect this has. I see it ALL THE TIME in my office. “2.5% on that little house? How cheap can you get?” or “3% on the first $100k and 1.5% on everything over? On a $115k house? Are they NUTS?”
These sellers cut themselves out of showings to buyers before they even get out of the gate because they felt that cutting their commission would help them save money. Four months laters (that’s the average in Michigan) their price drops. Either by $5k or $10k on average. One of those two numbers. That was a lot of commission that could be paid. And their house might have been priced RIGHT…but they got no buyers to walk through.
The general rule of thumb with myself and the agents that I trust…if you negotiate a commission lower than 6%…you have to split it…but ALWAYS give 3% to the Buyers agent. The buyers control the sale!
If you are going to cut out buyer’s represented by Buyer’s Agents, and/or you are going to pay the Buyer’s Agent less than 3% on a house…it’s better to just sell it yourself…you won’t have any buyers walking through.
Oh…by the way…this advice isn’t a “scare tactic”. I don’t list houses as of yet…so I’ve never told any sellers this cold dark truth. However I know plenty of agents who’s sellers have a showing once in a blue moon because they cut the commission or they have overpriced the house.
It is however market specific…I just moved from the DC market. The tactic of selling a house there? Price it at market. Put it on the market on Thursday…let all the buyers walk through till Sunday…sit down and evaluate the five or six offers you have…find the best one…call him up and ask for MORE MONEY! That’s what my agent did when we sold our house there! Differnt markets…different selling strategies.
Re: On the flip side- Great Example! - Posted by Jack
Posted by Jack on March 08, 2006 at 16:29:15:
Another great example of a Relator’s convoluted thinking. You don’t have to be Scotch to figure out when you are getting ripped off. With a Buyer’s agent, the Seller is not getting what he pays for. He pays for the guy who is working against him. Why would anyone knowingly want to do that? You say it makes no difference. It certainly does, if the seller does not pay the Buyers broker, he does not have to pay anyone working against him. If there is a sub agent involved and no Buyer’s broker, the sub agent works for the seller. At least this way, even though the Seller ultimately pays, its for some one who works for him, not the Buyer. If the listing Broker sells it he gets all the commission, if he splits it with another agent who in effect is working for the Seller, thats up to him. Its not the amount of money involved here, its who pays it, the Seller and therefore anyone he pays should work for him. I would venture to say to see it any other way is just not dealing with the actual facts. This invention of a dual agency or Buyer’s broker arrangements is just a lot of huey to let Relators do whatever they want to do and not be legally or morally bound to the actual situation. Now geting an increase in price to fund purchasing loans is a whole another story. There are certainly legalities involved there also.
Re: Maybe it depends on the market… Not Likely!. - Posted by Jack
Posted by Jack on March 07, 2006 at 17:33:03:
Nice words, but they do not do anything except to try to justify what should be an illegal activity. If you are so altruistic, please state why you do not think it should be moraly and legally acceptable for a Buyer to pay a "Buyer’s Broker, not the Seller. If you do not believe you actually should work for the guy who pays you, the seller in this case, then I think you and I are wasting our time and I rest my case. You can go on all day about how your idea of this arrangement is to the seller’s advantage and you are only helping him out. What it depends on is not the market, but how you can justify ripping off the seller. So far you are doing a creditable job of doing that. Your handle unfortunately is a give away-Down River. That is exactly what it appears to me you are doing to the sellers, selling them “Down River”. I fully understand after more than 25 years of investing that some investors and especially Relators sometimes will do anything to make a buck, but that does not make it morally or legally right. You and I have to live with ourselves. Where do you stand?
Re: On the flip side- Great Example! - Posted by Brian (UT)
Posted by Brian (UT) on March 09, 2006 at 24:03:46:
Jack
Please let me apologize for responding to your post, I made the mistake of thinking you might possess a working brain. I’ve learned my lesson, a response to jack = response to a very dull tack.
Brian
Who really pays? - Posted by Drew
Posted by Drew on March 09, 2006 at 11:32:54:
I am not so sure it is clear cut that the seller pays in this case. Let’s face it, without a buyer, there would be no commission trigged, and sellers are likely to factor the 6% commission into the home price. So, while the agents get the commission from the sellers, isn’t it usually the buyers who really pay for it?
Drew
Re: Who really pays? - Posted by Jack
Posted by Jack on March 09, 2006 at 14:42:38:
Using that logic you could say the buyer pays for everything anyway. The fact is the seller owns the house until the buyer buys it. If the buyer takes the sellers asking price the seller gets the procedes, which are then reduced by the Relators’ commission, providing the offer is accepted through a relator. If there are no Relators involved (Heaven forbid) the seller gets the full amount which is usually the full market value or less, depending on the comparable value of the house, apraisal and mortgage value and the circumstance or shape it is in. If the Seller is willing to list with a relator to sell it, he takes that much LESS, depending on the comission. If there is a second relator involved the relators usually split the commission, all again paid by the Seller by deducting it from the sales price. The commissions paid to the relators come out of the contract sales price which belongs to the Seller. Its bad enough that he/she has to pay a relator, usually too much for doing too little, but to then add insult to injury, by him having to pay one of the relators working against him is going a little too far.