I'm looking to buy an investment property. I have a very close friend who is a real estate broker who has shown me some properties. On the west side of Chicago where I'm looking to purchase property there appears to be some stiff competition, my question is it ethical or legal for my friend (broker) to waive her commission in order to help my deal look more appealing in regards to REO or distressed properties? Any help will be greatly appreciated.

Would you work for free so your employeer gets a better bottom line? Are you going to feed your friend in order to save a few bucks? You prefer for your friend to make nothing to make you something?

If you was my friend I would tell you to find another agent.

I did not post the entire history of my friendship, if I had perhaps your response would be a little different, I don't expect anyone to work for free. Anyway, I drive around and when I see a property that sparks my interest, I call her (my agent friend) in order to get some information about the property and set up a showing. On many occasions I have come across properties and mentioned it to my friend and it was perfect for buyers she worked with, those buyers purchased the property, she got commission, I do that for free, everyone's happy.

I don't know about IL, but in CA commission negotiations are not allowed within purchase negotiations. You could just offer 3% more and have your agent credit you at closing for repairs or closing costs.

Some legislation is certainly regulating these situations.

Devay, it still seems like a very one-sided deal, obviously in your favor. Either way, your friend would be in the position to tell you whether that's even feasible (i.e. local regulations, brokerage policies). Best of luck.

This thread is now almost three (3) months old.

And I wonder if the "close" friendship still exists?

appealing to who? so you're saying the listing broker will keep the entire commission, or you expect the seller or bank (REO) to reduce the sale price to exclude the selling/buyer broker's portion of the commission? I doubt that will happen.

Also, such a tactic could be construed as an attempt to keep the selling/buyer broker's commission "under the table", so you're on shaky ground. better to forget this scheme.

Great question! A client of one of my agents asked him to reduce his commission on the buy, and he said he would if that same client would give him half of his next paycheck. Horrible objection handling, but I think his point was made. Unfortunately, he lost the deal.

I think that was rather good objection handling. It's direct and effective. clients need to understand the reality of real estate sales, and that casually asking an agent to take a big pay cut is not reasonable.