OT: Buying House without Agent

[RU Cheese]

Curiosity question... Has anyone ever bought a house without using a real estate agent? I'm not asking for a lecture on how important a Buying agent is, but simply if anyone has ever done this before. Specifically, if it's customary for the Selling and Buying agent to split the commission, I'm trying to understand why you can't negotiate with the Selling agent to drop the rate since it's all going to him or her.

Example: For a $100k house, assuming 6% commission that gets split... Seller = $94, Selling Agent = $3, Buying Agent = $3
Alternative: Offer $98k for house, and Selling agent gets total of 4% commission... Seller = $94.1, Selling Agent = $3.9, Buying Agent = N/A

This is a win for everyone, so other than the greed of the Selling agent trying to be the Buying agent as well, why doesn't this happen / what am I missing?

 

[anon_0k9zlfz6lz9oy]

I know you dont want the lecture but you need it.

Youd have to be a total idiot as a buyer to not use a buyers agent. Incredibly dumb decision. Theres so much more to the transaction than finding a price, even moreso in this market.

Second, alot of commission agreements signed by listing agents and sellers have a “variable commission agreement”. Aka if the sellers agent dual agents it and theres no buyers agent involved, seller pays less commission.

Hire a buyers agent, dont be a fool.

 

[RUinPinehurst]

In a 6% commission model, the owner/broker of the listing agent's agency gets 3%. Listing agent gets 1.5%. Buyers agent gets 1.5%.

That said, your objective is buying the right property at the right price for you. Should not be concerned about eliminating that 1.5% associated with the buyer's agent, as long as you get the property at a price that works for you.

Partner with a good real estate attorney and a home inspection resource and appraisal service.

 

[Shelby65]

I know there's extra consent paperwork and ethics obligations of a single buyer/seller agent but that agreement isn't worth the paper it's printed on. In all professions and other walks of life there are unscrupulous bastards. I bought a house that way once and all throughout the process the single-agent dynamic stunk to high heaven. I would absolutely never recommend or do that again.

That being said, you absolutely can negotiate that. You can negotiate with two agents as well. Whether they'll accept a lower commission is up to them and their real estate firms. If they don't, threaten to get your own buyer agent. That would mean even less $$ for the listing agent.

 

[anon_0k9zlfz6lz9oy]

I know there's extra consent paperwork and ethics obligations of a single buyer/seller agent but that agreement isn't worth the paper it's printed on. In all professions and other walks of life there are unscrupulous bastards. I bought a house that way once and all throughout the process the single-agent dynamic stunk to high heaven. I would absolutely never recommend or do that again.

That being said, you absolutely can negotiate that. You can negotiate with two agents as well. Whether they'll accept a lower commission is up to them and their real estate firms. If they don't, threaten to get your own buyer agent. That would mean even less $$ for the listing agent.

Common misconception you had that many share. The worst thing someone can do is not use a buyers agents. The second worst thing is only work with listing agents on properties, you quite literally legally have zero representation in that case

 

[Shelby65]

Common misconception you had that many share. The worst thing someone can do is not use a buyers agents. The second worst thing is only work with listing agents on properties, you quite literally legally have zero representation in that case

that's not what I said. I said don't work with a single buyer/seller agent (conflict of interest). have your own separate buyer agent

 

[RU Cheese]

I know you dont want the lecture but you need it.

Youd have to be a total idiot as a buyer to not use a buyers agent. Incredibly dumb decision. Theres so much more to the transaction than finding a price, even moreso in this market.

Second, alot of commission agreements signed by listing agents and sellers have a “variable commission agreement”. Aka if the sellers agent dual agents it and theres no buyers agent involved, seller pays less commission.

Hire a buyers agent, dont be a fool.

Can you give a ballpark of what the commission change is in variable situation? e.g., if 5% is standard, does it drop to 4% if they dual hat?

 

[RU Cheese]

The worst thing someone can do is not use a buyers agents.

Why? I don't care about corporate or investment type properties but for single family in the suburbs - why? Buying agents I've used in the past have added literally zero value, so I'm genuinely curious as to what they offer?

 

[koolraddad]

Curiosity question... Has anyone ever bought a house without using a real estate agent? I'm not asking for a lecture on how important a Buying agent is, but simply if anyone has ever done this before. Specifically, if it's customary for the Selling and Buying agent to split the commission, I'm trying to understand why you can't negotiate with the Selling agent to drop the rate since it's all going to him or her.

Example: For a $100k house, assuming 6% commission that gets split... Seller = $94, Selling Agent = $3, Buying Agent = $3
Alternative: Offer $98k for house, and Selling agent gets total of 4% commission... Seller = $94.1, Selling Agent = $3.9, Buying Agent = N/A

This is a win for everyone, so other than the greed of the Selling agent trying to be the Buying agent as well, why doesn't this happen / what am I missing?

I would suggest your speak with an Attorney to discuss your thoughts and ideas. email me bwrlaw at yahoo

 

[jmc11201]

Curiosity question... Has anyone ever bought a house without using a real estate agent? I'm not asking for a lecture on how important a Buying agent is, but simply if anyone has ever done this before. Specifically, if it's customary for the Selling and Buying agent to split the commission, I'm trying to understand why you can't negotiate with the Selling agent to drop the rate since it's all going to him or her.

Example: For a $100k house, assuming 6% commission that gets split... Seller = $94, Selling Agent = $3, Buying Agent = $3
Alternative: Offer $98k for house, and Selling agent gets total of 4% commission... Seller = $94.1, Selling Agent = $3.9, Buying Agent = N/A

This is a win for everyone, so other than the greed of the Selling agent trying to be the Buying agent as well, why doesn't this happen / what am I missing?

I've known people who have done it and basically the net offer they made was modestly more competitive than it would have been with an agent. The guy who did it has bought and sold a lot of property in his time, is a bit obsessive compulsive, knew houses having had some remodeling/construction experience, and spent some time learning the local market.

If you are new to a market or don't have the aptitude or experience buying or selling real estate, it seems like a bad idea...but if you are smart and detail oriented and informed on the market, there is probably a little bit of value to be extracted going it alone (or with a real estate lawyer only).

 

[jmc11201]

Why? I don't care about corporate or investment type properties but for single family in the suburbs - why? Buying agents I've used in the past have added literally zero value, so I'm genuinely curious as to what they offer?

Agents try and give you the impression that a buyers agent is totally free and paid for by the seller, but anyone with half a brain knows the buyer pays for it in the price of the home.

Fight the good fight my man!

 

[Plum Street]

You can do it.
If you know the area well and have a good eye for construction.
Realtors are slimy so if they are gonna double their commission, you might do well here.
Get a good lawyer and your own home inspector.

 

[fg7321]

Different situation but I sold my mothers house using an agent who got a buyer who didn't have an agent at the open house. I negotiated down the commission because they dint have to pay the buyers agent.
Everything is negotiable and if you don't ask for it you can't get it

 

[CollegeSenior]

I’ve purchased two homes without an agent. I saw both of them at Open Houses.

As for the commission rates - they were paid by the seller, so I have no idea if they got a break on them.

 

[anon_0k9zlfz6lz9oy]

Can you give a ballpark of what the commission change is in variable situation? e.g., if 5% is standard, does it drop to 4% if they dual hat?

5% to 3-4% is typical

 

[anon_0k9zlfz6lz9oy]

Why? I don't care about corporate or investment type properties but for single family in the suburbs - why? Buying agents I've used in the past have added literally zero value, so I'm genuinely curious as to what they offer?

Legally as a dual agent repping buyer/seller you CANNOT advise either party. Read this doc called “the consumer information statement” specifically the bit on dual agency, it’ll explain it.

You must have used **** agents

 

[anon_0k9zlfz6lz9oy]

Agents try and give you the impression that a buyers agent is totally free and paid for by the seller, but anyone with half a brain knows the buyer pays for it in the price of the home.

Fight the good fight my man!

Eh not worth engaging haha.

But you likely have no idea how many deals get done off market and homes never hit the market because an agent has a house theyre about to list but has a buyer already lined up.

 

[Plum Street]

5% to 3-4% is typical

In todays market , you should not pay above 4% commission. Inventory is tight so I am told . The agent is gonna want the listing

 

[Brisket and Bourbon]

Why? I don't care about corporate or investment type properties but for single family in the suburbs - why? Buying agents I've used in the past have added literally zero value, so I'm genuinely curious as to what they offer?

Sounds like you have answered your own question… Don’t get one…go for it

 

[anon_0k9zlfz6lz9oy]

In todays market , you should not pay above 4% commission. Inventory is tight so I am told . The agent is gonna want the listing

Would you prefer to pay 5-6% for an elite agent who gets you $1,000,000 or 4% to an ehhh agent who gets you $950K?

State average is about 1.7% above ask right now. The top teams are between 9-10% above ask ytd.

 

[Plum Street]

Would you prefer to pay 5-6% for an elite agent who gets you $1,000,000 or 4% to an ehhh agent who gets you $950K?

State average is about 1.7% above ask right now. The top teams are between 9-10% above ask ytd.

Well yeah sure would rather pay 5% -6% for a top agent if that’s the question . But even top agents want listings. 4% of something is better than 0% of nothing

 

[anon_0k9zlfz6lz9oy]

Well yeah sure would rather pay 5% -6% for a top agent if that’s the question . But even top agents want listings. 4% of something is better than 0% of nothing

Price is only an issue in the absence of value.

Top teams have no problem charging 6% tbh, they get little to no pushback. They're worth it. You get what you pay for.

 

[Plum Street]

Price is only an issue in the absence of value.

Top teams have no problem charging 6% tbh, they get little to no pushback. They're worth it. You get what you pay for.

A house is only worth so much . A
Savvy seller should be able to figure out pretty close to what they’re gonna get.
In this market, anyone can sell a house. You know this and post about the market conditions all the time

 

[CollegeSenior]

Why? I don't care about corporate or investment type properties but for single family in the suburbs - why? Buying agents I've used in the past have added literally zero value, so I'm genuinely curious as to what they offer?

First, remember that you aren’t paying the buyers agent. The seller pays the commission. So you aren’t going to save money by not using one.

Different situation but I sold my mothers house using an agent who got a buyer who didn't have an agent at the open house. I negotiated down the commission because they dint have to pay the buyers agent.
Everything is negotiable and if you don't ask for it you can't get it

This. See my comment above.

 

[Plum Street]

First, remember that you aren’t paying the buyers agent. The seller pays the commission. So you aren’t going to save money by not using one.




This. See my comment above.

The buyer is not looking at the commission in this case . The buyer is trying to get a discount on the house by enticing the sellers agent that is now going to get the whole commission , who could persuade his/her client to take this offer by making it appear to be the best offer. Agent could also have buyer use his mortgage guy etc . So the pot is sweetened greatly for the agent .
Stop overthinking this people . It’s very simple and does work

 

[Plum Street]

Curiosity question... Has anyone ever bought a house without using a real estate agent? I'm not asking for a lecture on how important a Buying agent is, but simply if anyone has ever done this before. Specifically, if it's customary for the Selling and Buying agent to split the commission, I'm trying to understand why you can't negotiate with the Selling agent to drop the rate since it's all going to him or her.

Example: For a $100k house, assuming 6% commission that gets split... Seller = $94, Selling Agent = $3, Buying Agent = $3
Alternative: Offer $98k for house, and Selling agent gets total of 4% commission... Seller = $94.1, Selling Agent = $3.9, Buying Agent = N/A

This is a win for everyone, so other than the greed of the Selling agent trying to be the Buying agent as well, why doesn't this happen / what am I missing?

It does happen . Not all the time but I know it’s happened.
The people that are telling you it doesn’t happen are the same ones that will tell you college football players never got paid before NIL

 

[CollegeSenior]

The buyer is not looking at the commission in this case . The buyer is trying to get a discount on the house by enticing the sellers agent that is now going to get the whole commission , who could persuade his/her client to take this offer by making it appear to be the best offer. Agent could also have buyer use his mortgage guy etc . So the pot is sweetened greatly for the agent .
Stop overthinking this people . It’s very simple and does work

I already posted above that I’ve purchased two homes without using a buyers agent. I got them at very good prices. It was none of my business whether or not the sellers agent took a reduced commission and I didn’t need to get involved in it.

I’ll leave it to you to judge if I was “overthinking it”.

 

[RRRRUUUU]

I’ve bought and sold without an agent. I sold my place in hoboken for much more than what agents were saying it could go for. I used homelister.com so it would appear on mls. I’ve bought without an agent too. I would say spend more for a well respected real estate attorney (closer to $2k rather than $1k) and that is more useful than an agent

 

[anon_0k9zlfz6lz9oy]

A house is only worth so much . A
Savvy seller should be able to figure out pretty close to what they’re gonna get.
In this market, anyone can sell a house. You know this and post about the market conditions all the time

Totally agree, ANYONE with a faint pulse can sell a house right now.

However, a top agent/team will get you more money than you'd be able to get yourself.

I look at houses and the comps show $600K, bidding war breaks out and it trades at $750K. You aint doing that for sale by owner and a **** agent aint doing that for you. Those numbers may sound outrageous because they are but it's true and happening. I had a client bid on a $699K house in BLOOMFIELD listed by a top tier team. We went in at $760K, it sold for $999K. A 3 bedroom in BLOOMFIELD

 

[anon_0k9zlfz6lz9oy]

The buyer is not looking at the commission in this case . The buyer is trying to get a discount on the house by enticing the sellers agent that is now going to get the whole commission , who could persuade his/her client to take this offer by making it appear to be the best offer. Agent could also have buyer use his mortgage guy etc . So the pot is sweetened greatly for the agent .
Stop overthinking this people . It’s very simple and does work

This buyer is going to be homeless in this market. Inventory is too low for a buyer to have leverage. Unless it's an overpriced total ********, it's gonna have multiple bids. Buyers don't hold the cards. If there was ever a time to try this the past 2-3 years certainly has not been the time.

 

[Retired711]

We just sold a house. We paid 5% commission. The buyers' agent got half of that. We would have paid the same 5% if the buyer had had no agent. So there would have been no advantage to us for a buyer to have no agent.

Yes, it would theoretically have been financially advantageous to the seller's agent if the buyer had no agent. It would have been just the same if the seller's agent had brought in the buyer. I don't know how other agents work, but our seller's agent had found a potential buyer, and didn't even bother presenting the offer because it wasn't competitive with the offers presented by other agents. That made sense. If the agent had presented the offer, it would have been clear that she was trying to cheat us. The same would be true if the agent had tried to press us to take an offer from an unrepresented buyer. Agents like being agents -- they don't want to take the risk of losing their licenses or having their reputations harmed due to complaints from an outraged buyer. So there is no real advantage to the seller's agent from the buyer being unrepresented. Moreover, I suspect that agents regard it as a pain in the *** to deal with someone other than an agent because agents know how things work.

Most importantly, there is *no* inventory. There are multiple offers for any respectable listing. The only way to win is to outbid the other potential buyers on price and/or conditions (e.g. inspection).

In a nutshell, IMHO , there's no good reason for a buyer not to work with an agent. The same, btw, is true of a seller. Yes, you can sell your house without an agent, but a good agent is invaluable in advising on how to prepare the house for sale and how to market it.

 

[WhichReligionIsRight]

A few disconnected thoughts.

If you do end up hiring an agent (you should - unless maybe it is a new home or the home condition is impeccable), DO NOT use the listing agent. Even if this practice is legal, double-ending is unethical. A real estate agent has a fiduciary responsibility and cannot be expected to always look out for both your interests and the sellers' interests. If some **** goes down, the agent will have a primary fiduciary duty to the sellers.

You can attempt to negotiate the commission with your agent and the sellers. I suspect you may have more leverage these days. Real estate transactions are way down, so both the sellers and prospective agents may be more willing to negotiate commission terms than in recent years.

You may get the best possible terms with the sellers on price and for correcting any issues if you can make an all-cash offer with a really short escrow period. I'd focus more on getting the right price than getting into the commission weeds. The sellers and their agent will find ways to stick it to you in other ways.

 

[Retired711]

A few disconnected thoughts.

If you do end up hiring an agent (you should - unless maybe it is a new home or the home condition is impeccable), DO NOT use the listing agent. Even if this practice is legal, double-ending is unethical. A real estate agent has a fiduciary responsibility and cannot be expected to always look out for both your interests and the sellers' interests. If some **** goes down, the agent will have a primary fiduciary duty to the sellers.

You can attempt to negotiate the commission with your agent and the sellers. I suspect you may have more leverage these days. Real estate transactions are way down, so both the sellers and prospective agents may be more willing to negotiate commission terms than in recent years.

You may get the best possible terms with the sellers on price and for correcting any issues if you can make an all-cash offer with a really short escrow period. I'd focus more on getting the right price than getting into the commission weeds. The sellers and their agent will find ways to stick it to you in other ways.

If a buyer is pre-approved (as is often the case these days), there is not much advantage to the seller from the offer being all cash. The only caveat is that sometimes the buyer's lender causes trouble on silly issues. This is especially true now when interest rates are going up and so the lender doesn't much care if the deal goes through because there is always another potential buyer to lend to at a higher interest rate.

"Double-ending" is allowed by law so long as there is full disclosure through a standard form. The "double-ending" agent is limited in what she can tell each side, e.g. about what the other party's motivations. Still although I liked our agent, I was happy that the buyer came from a different agent.

I'm not a big fan of trying to negotiate commissions because I want my agent to have every possible incentive to work hard for me. If an agent is going to get 4% commission from my house, and 5% from somebody else's, she's going to care a lot more about selling the other house.

In the grand scheme of things, the percentage the agents get is small enough that it shouldn't be treated as a big deal.

 

[Plum Street]

Totally agree, ANYONE with a faint pulse can sell a house right now.

However, a top agent/team will get you more money than you'd be able to get yourself.

I look at houses and the comps show $600K, bidding war breaks out and it trades at $750K. You aint doing that for sale by owner and a **** agent aint doing that for you. Those numbers may sound outrageous because they are but it's true and happening. I had a client bid on a $699K house in BLOOMFIELD listed by a top tier team. We went in at $760K, it sold for $999K. A 3 bedroom in BLOOMFIELD

Not saying you should do sake by owner.
A savvy seller knows what his agent should get for the house, whether the commission is 4% or 6.

Are you a real estate agent?

 

[RUskoolie]

Nothing changes and you get the selling agent double commission. This happens to me a couple times a year. It can help you a little bit if the agent who is listing the home, is also representing you but not always.

It costs you zero to have a buyers agent. If you have a good one it will help you a ton, especially in this market where banks are denying mortgages left and right.

 

[RU Cheese]

Would you prefer to pay 5-6% for an elite agent who gets you $1,000,000 or 4% to an ehhh agent who gets you $950K?

State average is about 1.7% above ask right now. The top teams are between 9-10% above ask ytd.

I respect you defending the profession, but I've asking about the need for a BUYERS agent and so far I haven't heard one good argument. I get the dual agent limitations, but I'll ask again, if I know what property I'm interested in, what does aa buying agent get me?

 

[anon1753890747]

I would suggest your speak with an Attorney to discuss your thoughts and ideas. email me bwrlaw at yahoo

I would charge him 1.5% if I were you

 

[Plum Street]

I respect you defending the profession, but I've asking about the need for a BUYERS agent and so far I haven't heard one good argument. I get the dual agent limitations, but I'll ask again, if I know what property I'm interested in, what does aa buying agent get me?

He’s a good poster .
But full of crap here . He knows how the game is played but doesn’t want to put it out there .

 

[Plum Street]

Nothing changes and you get the selling agent double commission. This happens to me a couple times a year. It can help you a little bit if the agent who is listing the home, is also representing you but not always.

It costs you zero to have a buyers agent. If you have a good one it will help you a ton, especially in this market where banks are denying mortgages left and right.

The whole premise of this question is getting a realtor that will play ball with the buyer . So yes. If the realtor plays ball then this scenario works . Realtors have shady mortgage guys.
And realtors play ball. As the OP asked this scenario works and @kyk1827 knows this too

 

[Retired711]

I respect you defending the profession, but I've asking about the need for a BUYERS agent and so far I haven't heard one good argument. I get the dual agent limitations, but I'll ask again, if I know what property I'm interested in, what does aa buying agent get me?

"If I know what property I'm interested in" -- most buyers don't start out knowing that. The agent knows the neighborhoods better than almost all buyers. Second, it is always a pain to deal with someone who is not in your profession, so a seller's agent would prefer to deal with another agent rather than have to educate someone from outside the field. Third, an agent is a professional negotiator and can do better at it than almost all buyers. Fourth, a good agent is going to be able to advise you on choice of attorney (that's important in New Jersey, where the standard form contract is so badly written), home inspector, and similar non-trivial details. For almost all buyers and situations, scrimping on commission is just not worthwhile.