ways to save money
Question
Does paying 1% compared to 2% or 3% to a buyer's realtor really make a difference?
We always sell our homes ourselves when we move using an MLS listing agent. We've traditionally paid 3% to the buyer's agent. Here we are in a buyer's market where our house is probably going to go for about $150k to $200k less than what we paid for it (about $800k) so I'm looking at ways to save money. Does paying less than 3% really influence traffic? For us, I know we try to make our home buying non-emotional but for most buyers it becomes an emotional process. I know I also use websites to find houses (like realtor dot com and others), not just the MLS listings from my own realtor. Is a realtor really going to NOT show our house if we pay only 1% of a $600k to $650k house? Or, is the buyer not going to see our house because their agent isn't getting 3% instead of 1%. We've used agents to buy all of our houses and our first house was $125k. Our realtor got 3%. So, somehow when a realtor is going to make say $600k x 1% = $6000, they won't want to deal with us? One add'l comment. If I found out that an agent I had hired to show me houses as a buyer didn't show me a great house at a great price because they would have made $3k less than at a house down the block, I'd fire that realtor.
1 month ago - 5 answers
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Chosen by Asker
yes it will. if you pay 1 or 2% no realtor will want to show that house. And if the have a client insist on seeing it they will find a way to turn client against it. a coulple of little criticisms is all it takes. the neighbor down the street will pay them 3% so guess which house they will show to clients?
by David Z
1 month ago
Asker's Rating: 
Other Answers
While technically it’s a violation of the federal anti trust rules for agents to refuse to show homes being listed at discounted commission rates; the reality is its not worth the agents time and energy to work on a deal with only a 1% commission even on a 600K house Typically when you move up to the multi million dollar homes the commission drops to 4% but you are not in that ball park The main issue in your statement , the agent does not get 1% or even 3%, the agent will have to split that commission with their broker, now the contract between the agent and broker can be 50/50 split or if the agent is very productive say 60/40 in favor of the agent So let’s say in your case it’s a 50/50 split so out of the 1% commission on 600K is 6K but then its split 50/50 leaving the agent 3K, then you factor in the agent is an independent contractor you need to factor in taxes, insurance omission and errors etc so take another 1/3 from the 3K, leaving 2K then you add in the time to close the amount for showings the time in the car fuel bills, etc So in reality do you think an agent will work their but off for you to close a deal where they may make 2K before considering out of pocket expenses?
by goz1111- 1 month ago
I understand your concern to save money. You have actually saved money without even doing anything, as the value of that commission is based upon the sales price, not the list price. So because your property is now worth less, the 3% commission is automatically less. I will assume that should a Realtor bring you the buyer, that you would want that Realtor to make arrangements for the closing? Inspections? And additional advise and guidance during this transaction? Then they deserve 3%. $6,000 ? The agent may get 45% of that as Gross Income. What most folks don't understand is that 3% is split between the agent and the broker. If that agent is only at 45% commission, figure out what that commission is for them, then off the top comes the business expenses such as advertising, education, business supplies, car maintenance/insurance, and with what is left over they pay their own Social Security, taxes and all other personal needs and such. Not to mention the liability they take with each transaction. So don't think that just because you paid 3% that the Agent gets it all. To answer your question; I don't show properties because there is a high commission being paid out. It isn't something I consider until I write up the purchase agreement, as it is required to reveal what I am paid. So No I don't think it brings more agents with buyers.
by Realtoratheart- 1 month ago
Where do you think the listings that appear on realtor.com come from. They come from the MLS, and so do the listings on many other sites. If you are in a buyers market the commission will make a huge difference. If it was a sellers market you might get away with paying 1%. Look at it from the agents point. why would you want to show a home that you will get paid $6,000 for when there are plenty of others that they could make $12,000-18,000 on. It would be like you going to your job and the boss telling you he's only going to pay you 1/3 of your normal from now on pay because he lost money last month...Would you continue to work there?
by Lone- 1 month ago
you answered your own question. Yes it will because it's a buyers market. There are tons of houses on the market, and many are just like your house. If they are paying 3% or even 4%+ bonus, why would an agent show your house for much less? Answer, they wouldn't. In addition, unless your 800k house is in an area with a lot of more expensive homes, you will find it hard to sell in this market without an agent. ********there are only some many houses an agent can show. They will show the house that BEST fits their clients needs, but if all the houses are the same, then they will show the ones that make the most money, Sorry but that's the way it works. You want to earn as much on the sale of your home, the agent wants to earn as much as they can *****************
by real estate guy- 1 month ago