I'm a home buyer, not an agent. I know that buyer's agents typically get half the selling agent's commission. My question is very simple: If I found a house on my own, and am willing to do all the legwork, can I request the selling agent to pay me half the commission... i.e., act as my own buyer's agent?

Have you ever had surgery?....Did you ask the surgeon if you could close the incision yourself to get a discount...LOL

Seriously though...From fellow non Real Estate agent, I'd say whether you can or not...it sounds like a recipe for disaster and disappointment. Don't undervalue what is being done for you by trying to nickel and dime your way to home ownership. There's people are some of the hardest working, underappreciated proffessionals I have ever come across. Let the pro's handle it and enjoy your new home.

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Rich
Advertising, Marketing & Virtual Tours

Thanks very much for the response Rich. I guess you know you didn't answer the question, although I think I may have 'heard' a yes. I knew this would be an unpopular question in this forum, so your response was not altogether unexpected, but I'd still greatly appreciate an answer if any knows it (and I'm sure someone in this forum does).

By the way, when I bought my current house many years ago, the seller was a neighbor who we had known for years. I handled all the legwork and paperwork myself to complete the transaction, and while it was time-consuming and, at times, frustrating, it certainly was not brain surgery. Also, every homebuyer I know has described the process as "time-consuming and frustrating" even when they use an agent.

One other point, I am not talking about "nickels and dimes." The house I've found will sell for about $400K. 3 percent of that is $12K. That's no pocket change, and will nicely offset the 6% commission I'm going to pay an agent to sell my current $200K house. More importantly, if I find the house on my own (which I have) and handle all the legwork (which I've done before), why is that $12K not my money? Why should the selling agent get to keep it? H/she was ready, willing, and able to give it up to a buyer's agent who brought a qualified buyer to the table. That person is me, in this case. So again, my question is.... Can I (the homebuyer) request the selling agent to pay me half the commission, if I handle all the buyer's agent's responsibilities myself?



[This message has been edited by cobra9777 (edited 04-08-2004).]

I don't know what state you are located in but in the state of Georgia, in order to receive a commission you must be a licensed agent. However that doesn't mean you can't reduce your offer by that amount unless the house is currently listed with another agent.

Krista

First off the buyers agent very rarely gets a full 50% of the listing agents commission. The only way to find out what the actual percentage being offered to the buyers agent on that particular property is by being a licensed agent.

Also if you do not have an agent representing you more than likely that will mean more work for the listing agent because they will have to manage both sides of the transaction essentially.

In summary, can you ask for 3% to be paid to you somehow more than likely by taking it off of the purchase price or some other way, probably (unless you already have an accepted offer then you are under contract and the negotiating is over and you will pay what you offered). Will you get it? Maybe you will, or maybe you'll offend the seller and blow the transaction.

Good luck!

Krista, thanks very much for the response. I'm located in Texas. I suspected someone would play the 'you need a license' card. However, in this case, I'm not asking a seller or a buyer to pay me a commission as an agent. The seller has already struck a deal with the selling agent to pay 6%. I want to ask the selling agent to split the 6% with me in exchange for not having to do the legwork of the buyer's agent. I don't think that scenario constitutes 'collecting a commission' from a buyer or seller. I think it is simply an agreement between myself and an agent.

Also, I don't think I can reduce my offer by that amount because the house is already listed with a selling agent. If there are two offers on the house... one for $400K with a buyer's agent who gets 3%, and mine for $388K and no buyer's agent, the seller is still going to take the $400K offer even though the selling agent would clearly be better off with my offer. I'm assuming the selling agent is obligated to act in the best interest of the seller in such a case.

But, now let's assume my offer is slightly better at $403K and also specifies that I am to be paid the 3% in lieu of a buyer's agent. The seller will take my offer. The selling agent is slightly better off than the competing offer. And I'm certainly better off because my net cost on the house is about $390K. Win-Win-Win.

I can't be the first person on the planet to think about this. Am I?

Hello,

What does the agent involved in this transaction have to say, have you approached them with this scenario yet?

I would give a quick call to the real estate commission in your state and get a copy of the laws.

In some states what you are talking about is absolutely illegal no matter how you look at it.

You asked a question on this board and we are trying to help you with an answer. We really have nothing to benefit or lose by giving you incorrect information.



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Make it a great day!

Brian Rodgers, MBA
Brian Rodgers Seminars, Inc.
http://www.brseminars.com
1-800-339-8841

AndersonEdge, thank you very much for the response. I really appreciate it.

Quote:
"Also if you do not have an agent representing you more than likely that will mean more work for the listing agent because they will have to manage both sides of the transaction essentially."

That's my whole point. I am willing to manage all aspects of the buyer's side of the transaction, same as a buyer's agent would do. I have done it before. I am just asking to be compensated in exchange, same as a buyer's agent would be.

Quote:
"Will you get it? Maybe you will, or maybe you'll offend the seller and blow the transaction."

I'm struggling to understand how this might offend the seller. In the scenario I described above in my response to Krista, if my offer is better than the competing offers, and the seller is obligated to pay 6% no matter what.... how would my offer offend the seller?

I think the 'offended party' will be the selling agent, who - I'm guessing - love it when people don't have a buyer's agent because they get to keep the whole commission from the seller.

Brian, thank you very much for the response. I have not yet approached the selling agent with my proposal. I have thought it through, and I'm convinced it is a reasonable approach for all parties. But before I make my offer, I decided to talk to several people to find out if this is common, uncommon, likely to work, likely to fail, legal, not legal, etc... or if there is some better, more common approach that achieves the same objective.

I very much appreciate everyone's information and thoughts on this topic. As I said before, I knew it would be somewhat unpopular for this forum, but I figure if anyone knows the answer, it's you.

Hi Cobra,
I hope you didn't take offense to my response in some way but I must admit, although not a licensed Real Estate agent, I get similar scenarios proposed to us all the time by a client who wants to do this part or that part of our job in return for a reduction in fees. I learned long ago that this almost never has a happy ending and don't get involved with that kind of stuff anymore. Unless the seller is a friend of yours again, he may start looking for another buyer...I know I would

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Rich
Advertising, Marketing & Virtual Tours

While I don't condone what you are doing, you may be able to proceed that you want a "buyers rebate" in the transaction. You better make a very convincing argument in justifying how much you want, though. And this will be disclosed, so some red flags will raise - be prepared in being able to address this down the line.

A cleaner method will be to ask for seller assistance instead.

-- Kane

[This message has been edited by narf (edited 04-08-2004).]

I wasn't very clear on my response.

You essentially want to pay 3% less for the house than what a buyer who has representation would. Thats ok.

Unless the agent agrees to cut their commission (which I don't belive you really have a right to negotiate as the commission is between the seller and the listing agent) you would just need to offer less which you've stated that you don't want to do because it will make your offer look less appealing.

My advice is to talk it over with the agent in question, to do this the way you are describing you'll need to have his or her cooperation. If the agent likes what you have to say, good for you maybe it will be win win all around, if they don't then you're not any worse off (unless you really wanted the property in which case you should have just make your best offer and hope you get it).

Instead of looking for a 3% rebate or payment or anything from the house your looking to buy, why not just save yourself the 6% your gonna pay from selling your house and do all the legwork on your own house? Just my .02

Rich, thanks again for the response. No offense taken. I appreciate all input on this question.

Quote by Rich:
"Unless the seller is a friend of yours again, he may start looking for another buyer...I know I would"

Again, I don't understand how my proposal might offend the seller. The seller is completely unaffected. The deal is between me and the seller's agent. The seller has already agreed to pay the agent 6%. If my offer, in terms of selling price, is acceptable to the seller, that should be all h/she cares about. You are the second person to mention this, so if there is some other aspect to my proposal that might offend the seller, and which I am overlooking, please clarify. Thanks.

Quote by Narf:
"...you may be able to proceed that you want a "buyers rebate" in the transaction. You better make a very convincing argument in justifying how much you want, though. And this will be disclosed, so some red flags will raise - be prepared in being able to address this down the line."

Hi Kane, thanks very much for the response. Could you please elaborate on what you mean by "buyer's rebate." Is that a standard industry term for what I'm proposing? Or does it refer to some similar, but different, scenario? Also, what do you mean about "red flags down the line"? Thanks again.

AndersonEdge, thanks again for the response. I have consulted other sources on this question, as well as this forum. I seem to be getting a pattern of responses indicating that... yes, this is possible and legal, but not very common, and potentially risky if you really want the property.

Quote by AndersonEdge:
"If the agent likes what you have to say, good for you maybe it will be win win all around, if they don't then you're not any worse off"

Regarding your quote above, I would like to hear from you and some of the agents on this forum what your personal reaction would be if you were the selling agent in this scenario and were presented with this proposal.

Also, is the selling agent obligated under contract to present my offer to the seller, regardless of h/her feelings about the proposed commission splitting arrangement?

Quote from Real Estate Rebel:
"Instead of looking for a 3% rebate or payment or anything from the house your looking to buy, why not just save yourself the 6% your gonna pay from selling your house and do all the legwork on your own house? Just my .02"

Hi Rebel. Thanks very much for the response. Good question. Three reasons:

1. I'd rather handle the buying side than the selling. I've already found the house I want, and I've handled the buying legwork in a previous transaction. So, I know I can do it. I really don't want to do a FSBO.

2. With the upgrade in value, I save the same total dollar amount getting 3% of the new house as I would saving all 6% of the old house. Plus, I know lots of FSBOs still cost money, take lots of time, and often end up paying a buyer's agent to bring a good buyer. So the total dollar impact would likely be less under your suggestion.

3. It seems wrong to me that when a buyer finds a house on his own, and is willing and capable of handling the required legwork, the selling agent keeps the whole commission, yet never really "represents" the buyer.

If I were the selling agent I would absolutely not reduce my commission, ESPEACIALLY if you offered to do all the leg work.
My job is to work in the best interest of the seller and by me agreeing to let an unrepresented buyer handle his end of the transaction is just asking for trouble! That is not looking after the sellers best interest if you ask me.

You ask the question: "More importantly, if I find the house on my own (which I have) and handle all the legwork (which I've done before), why is that $12K not my money? Why should the selling agent get to keep it? H/she was ready, willing, and able to give it up to a buyer's agent who brought a qualified buyer to the table. That person is me, in this case. So again, my question is.... Can I (the homebuyer) request the selling agent to pay me half the commission, if I handle all the buyer's agent's responsibilities myself?"

The oomission that a seller pays to the listing agent is for the listing agents services, legal expertise, and professionalism during the ENTIRE transaction. The listing agent, by offering half the commission to a buyers agent, is paying the buyers agent for the same thing the sellers are paying the listing agent for.....his services, legal expertise, and professionalism throughout the transaction process. Now, you say that you can do everything the buyers agent can do. I highly doubt that you have even half the experiance of an experianced buyers agent to start with.... but lets assume for kicks that you do. Do you have insurance that covers you should make a mistake throughout this 400k transaction? What happens when you fill out a form wrong... who is going to fix that to look out for their SELLERS best interest? Even if the sellers could sue you for thousands, it is not in their best interest to have to deal with that! The listing agent is getting paid the full 6 for very good reason! He/she now HAS to handle both ends of the transaction in order to fulfill his/her job to the sellers,,... to look out for their best interest throughout the sellers home selling process.

Do you even know if the listing agent is charging a full 6% for handling both ends of the transaction? A lot of agents drop their commission to 4 or 5 if they handle both ends of the deal since they don't have to deal with taking the buyers around and showing them houses.... which by the way is about the only thing this list agent would not have to do if you make an offer with no representaion.

Why don't you just "get your moneys worth" and go get a buyers agent. You will benefit as well! Shoot, a good buyers agent might just be able to negotiate you the 12k right off the top!

Good luck to you!

Quoted for absolute truth and agreement

You asked is the agent obligated to show your offer. I think it depends on the state but regaurdless they would only show valid offers and I belive it could be argued that what you are suggesting is not a valid offer because you are making it conditional on terms that have already been agreed to by the seller and their agent.

Pdxrealtor, thanks very much for the response. That was excellent input. I really appreciate it.

One hypothetical follow-up for you or any other agent who cares to answer:

Again, assume you are the selling agent in this scenario. You have 2 offers:

OFFER#1: $400K from a represented buyer, in which you will pay 3% to the buyer's agent
OFFER#2: $405K from me (an unrepresented buyer), with a request to be paid 3% by the selling agent in lieu of a buyer's agent, in exchange for managing all aspects of the buying side of the transaction.

Which offer is in the seller's best interest?

WOW, quite a lengthy discussion about buyers broker compensation.
Cobra9777, what's the hangup on this anyway? You want to buy a home and get the best value for it. Negotiate for the price you want! Who cares how the deal gets done, ie; seller reduces price, seller's broker reduces compensation, seller throws in his mint 55 Chevy, lol), as long as you are getting what you think is fair value.

If it doesn't work out, move on. If you are just hung up on the buyers broker compensation than get a license, represent buyers and sell sell sell. LOL

Offer 1 in your scenario may be a better offer because the buyer is represented by a knoledgeable professional whom can be held responsible for meeting deadlines and working for a smooth closing. An unrepresented buyer puts the seller at a very real risk of loss of not only money but time should the deal go sour.

Again best reccomendation would be to use an agent from the start or get your money off somewhere else.

Should you decide to use an agent you may be able to negotiate the commission for selling your one house lower if you agree to purchase your new house with the agent. Drop me an e-mail if you'd like some suggestions on how to do this or if you have any other questions.

A buyer's rebate is typically used to correct deficiencies in a property that the seller is not in the position to correct. This is paid out of the agent's commission, usually as a last resort measure (and in a hot market, forget about it!) to make the deal work.

With agreements spelled out between the parties, legitimate deficiencies usually go through smoothly. The red flag raises when a "deficiency" is noted in one place (agent/escrow), but not in another (inspection reports).

-- Kane

Correct me if I am wrong, but didn't I just answer that question above? The first offer by far is the best offer for my sellers. They might get 5k more by letting you do all the work, but once again, you have not even close the legal expertise, professionalism, and services at your disposal, that a REAL buyers agent has.

The big picture would be this, I would basiclly be RECCOMENDING to my sellers that they pay me 240000 commission, 120000 for my expertise and 12000 for a buyers agent expertise(in this case I would be both agents, therfore deserving both sides of the comission). Now, my job is to look out for my sellers BEST INTEREST.... right? So, I would be telling/suggesting this to the seller like this if I accepted your (the buyer who wants to rep himself and do all the legwork)proposal......

Me to sellers (my clients): I can get you 5k more on your house if you agree to let me take the buyers agent commission (12k) and give it to this buyer who is willing to rep himself completely without any of my help as long as I give him the buyer agent comission. So, you will be basiclly paying 7000 dollars(and saving 5000) to let a complete stranger to real estate handle his end of the deal throughout this entire process. What do you say?

Now, I don't know about you, but if my agent said that to me I would laugh! And lets just say my clients (the sellers) don't catch whats going on here..... I would have no other choice (legally) than to tell them what I just told you!

Pdxrealtor, once again, thank you very much for the excellent input. I really appreciate it. And... we're finally getting down to brass tacks. I thank you for that; it took a while.

Quote from pdxrealtor:
"Correct me if I am wrong, but didn't I just answer that question above?"

Actually no. You were answering a general question: What would your reaction be to the proposal...? My follow-up question was intended to see if your (and others') reaction was any different if it meant advising your client to walk away from $5K. I got my answer.

Quote by pdxrealtor:
"Me to sellers (my clients): .... So, you will be basiclly paying 7000 dollars(and saving 5000) to let a complete stranger to real estate handle his end of the deal throughout this entire process."

Correct me if I'm wrong, but your seller's owe you the $24K no matter what. So your statement about "paying $7K" and saving $5K is a bit misleading. The $24K is sunk cost to them. It has no bearing on future decision-making. I think a clearer depiction of the facts would be, [selling agent to sellers] "I can get you $5K more for your house if you agree to take the risk that this unrepresented buyer might delay or even botch the closing. His offer is contingent upon being paid 3% (an amount equal to the buyer's agent commission) out of my commission. My advice based on experience is that the additional $5K is not worth the risk."

Now, if I was your seller, and I know I'm out the $24K no matter what, and you present me with an offer that's $5K better than a competing offer I was willing to accept, I would not laugh. I would listen to the terms and conditions, talk to the buyer to understand why he thinks he can manage the buyer's agent responsibilities, make a judgment as to the risk based on my situation, and then make a decision. If I was a highly motivated seller with time constraints, I would probably NOT take the risk. Otherwise, I would give serious consideration before walking away from $5K. If I thought the risk was reasonable after talking with the buyer, I might even counter for $6K (50/50).

Throw your darts... I'm here to learn; and I greatly appreciate all input.

Bottom line here is that the sellers paid me 24k to make sure their transaction goes smooth, amongst numerous other things. If the sellers did interview you and decide to let you do it, I would not give my commission to you still, becasue guess who gets to clean up the mess in the end if you screw up? Thats right, me the listing agent. I don't care how much I advised them about the situation, they are still going to look to me for answers should a problem arise. I would look at it as being the overall buyers agent, regardless of the legwork you did, becuase of your inexperiance.

Pdxrealtor, now we are REALLY getting down to the heart of the matter, which relates directly back to my original question (and title of this thread)...

Quote by pdxrealtor:
"If the sellers did interview you and decide to let you do it, I would not give my commission to you still..."

My final question is quite simple: Is that your call? Or is it the seller's? Are you going to kill a deal that your sellers want to make? Is that in their best interest?

By the way, I'm not being insensitive to your arguments about "potentially" having to clean up a mess and not being paid for it. I fully understand and appreciate that point of view. But I want to bring this thread to a close by hearing your answer to my final question above. Thanks.

Well, with the rapore that I establish with my clients, they would value my professional opinion as they would see that I am acting in their best interest.

They hired me for several reasons, one of those reasons is to advise them on their decisions througout this transaction. It is my call what I do with my commission, which as soon as they sign the listing contract, it is my commission. I choose to pay a licensed buyers agent his commission, this is why I charged the sellers 6% in the first place. If they didn't want to listen to me would I give you my commission?... no. I myself already drop my commission to 4% if I handle both ends, so that is all I would be willing to do. And yes, I believe that by far that would be acting in their best interest, whether they see it or not.

Kinda like telling a kid that he can't have candy for dinnner, you tell your child that for one reason-... because of the experience that you have gained..... and the results that you know are likely to follow if you allow them to make that decision.

Cobra,

Are you just looking t get some cash out from this deal. Instead of negotiating, it sounds like you want cash at closing.

No sweat to you if you make a higher offer, because you're looking to get cash back.

Make this simple. Find a buyer's agent and negotiate with him. Will he give you his entire commission, no. Could you negotiate he give you a 1% rebate from his commissions? Probably.

Happens all the time in states the allow this form of 'rebating'.

If you're dead set on getting some cash back on this transaction (which from your posts, it indicates what this really boils down to), utilize a licensed agent and negotiate with him.

No you cannot expect money paid to you, legally money cannot be paid to an UN-licensed agent.
You keep mentioning "if a buyer finds the home themselves" well if a home is listed through a Realtor then there has been advertising done on the home, yard sign, books, Internet, etc. You found out it was for sale somehow. Which indicates the listing agent was your procuring agent, meaning the agent found you as a buyer, you did not find them. You didn’t dream the house was for sale
No listing agent will split a commission, when the list agent procured you as the buyer.
An individual who represents themselves never does the work they should; the Realtor will end up picking up your slack to keep the deal going forward.
You are a buyer, buy the house and be happy. If you want to be paid like a Realtor then become one.

Endlessprofits, thanks very much for the input. I appreciate it.

Actually, your premise is not correct. My objective is not to get cash out at closing. My objective is simply to reduce my total transaction cost by about $12K by managing all aspects of the buying side of the deal, as I have done successfully in a previous transaction.

By the way, many of the responses I've received in this thread are based on the foregone conclusion that I will certainly botch the deal. These responses seem to overlook the fact that I have successfully done this in a previous transaction (as I explained early on).

Nonetheless, endlessprofits, I like your suggestion about using a buyer's agent, but negotiating a rebate in exchange for not having to help me find a house and not having to do all the legwork. I was thinking more along the line of 1.5-2% however... then, it's almost as good as my original proposition. Thanks again for the input.

Jcdalton, thanks very much for the input.

Quote by jcdalton:
"No you cannot expect money paid to you, legally money cannot be paid to an UN-licensed agent."

We've already navigated through that one. I've been advised by several parties, including my attorney, that what I'm proposing is perfectly legal in the state of Texas so long as it is clear that the money is not a "commission" being paid to a "buyer's agent", but rather a negotiated "buyer's rebate" paid by the selling agent.

Quote by jcdalton:
"...if a home is listed through a Realtor then there has been advertising done on the home, yard sign, books, Internet, etc. You found out it was for sale somehow. Which indicates the listing agent was your procuring agent, meaning the agent found you as a buyer, you did not find them. You didn’t dream the house was for sale No listing agent will split a commission, when the list agent procured you as the buyer."

Interesting angle, but I'm not buying. All of that was done for the benefit of the seller. Without advertising, no one would know the house is for sale, including represented buyers to whom the listing agent is willingly offering half their commission.

Quote by jcdalton:
"An individual who represents themselves never does the work they should; the Realtor will end up picking up your slack to keep the deal going forward."

'Never' is a strong word. Please see my previous post. Since I have done this before, your statement is clearly not correct; although I would not have objected to 'usually.' In any case, your point was already made previously by pdxrealtor, so you really didn't add much to the discussion.

Quote by jcdalton:
"You are a buyer, buy the house and be happy. If you want to be paid like a Realtor then become one."

Actually, I am both a seller and a buyer. And frankly, the total transaction cost of this move (realtor commission, closing costs, prepaids, inspections, etc, etc) is not cause for happiness... and, in fact, may be the deal killer. I will sell my current house and buy a new house, but I will be happier if I can reduce the total transaction cost by handling the deal similar to my last transaction. I have no desire to "be paid like a Realtor." As I said in my previous post, my objective is simply to reduce my total transaction cost by about $12K by managing all aspects of the buying side of the deal, as I have done successfully in a previous transaction.

I would very much like to hear additional suggestions regarding alternative or more-conventional means to accomplish my objective. Thanks to all on this forum for the excellent input thus far.

Hi cobra9777,
I just visited this site for 1st time tonight and in reading your thread I had to register. I applaud you for digging deep to get answers to your questions. Wanted to share you with you a recent transaction where I was the listing agent.
I listed a home for a couple that had already moved out of their home because of a long commute to work. They had listed home previously and had been on the market for almost a year when I came in and listed home at $279,900 at a 6.5% commission rate.They were a very motivated seller as I am a motivated agent. A buyer came along without an agent and put in an offer at $265000 even after the seller had instructed me to inform the buyer that they had considerably reduced the price since starting to sell almost a year ago at $299,000. You see the seller owed $260,000 and could not bear much of a price reduction in order to pay the commission. A great agent will do what is necessary to sell a home versus having one not sell. At no time was I asked to reduce my commission but with a creative solution it was a win/win for both sides. I offered to reduce my commission to be paid $5000 in exchange for them using me as their buyers agent on the purchase of their next home. They accepted and they purchased a home for $400,000 in which I was paid 3%.
My suggestion for you is offer to buy the home at the price you are wanting to pay. The agent must present the offer to the seller. I wouldn't bring up anything about the commission instead let them figure out between the seller and agent how they can make your offer work for them.
Also let that agent handle the closing process for a smooth transition. One other suggestion would be to find the agent you want to sell your home and discuss commission structure to be a lower rate on your home in exchange for having them represent you as a buyers agent on a home that you have already found. Most will jump at the chance and then you will have representation on both ends. I just don't think it will work with you getting a split back at closing since it has to be shown on the HUD-1 and you would also have to show it as income. Which we all know results in taxes you would have to pay. Hope my input helps with your decision, and thanks for inspiring me to join this forum.

[This message has been edited by dakota (edited 04-19-2004).]

[This message has been edited by dakota (edited 04-19-2004).]

Cobra - thanks for posing your question; it's a good one and all of us can learn from it. I'm an agent in New York; although I can't speak for Texas laws, what you propose is certainly legitimate so long as no direct compensation is paid to you in the form of a commission split - in effect, you would have to get the agreement of the listing agent to cut his/her commission, and have the sellers reduce their price by a commensurate amount. The key here is you're at the whim of the listing agent.

Whether that agent agrees or not is completely up to them, and you're certainly welcome to ask. If the listing you are pursuing (hypothetically) were a dog about to expire in two weeks, I would bet you 90% of the agents on here that told you "absolutely not" would gladly arrange some sort of deal with you. If, on the other hand, the listing is in high demand and there's a possibility that agent can double-end the deal for a full 6%, the agent would be a fool to entertain your proposition. Again, it can't hurt to ask, but understand you're at the whim of the listing agent.

One thing I want to make clear is that you shouldn't turn this into some sort of ethical issue with regard to "what is better for the seller." Take your example scenario:

OFFER#1: $400K from a represented buyer, in which you will pay 3% to the buyer's agent
OFFER#2: $405K from me (an unrepresented buyer), with a request to be paid 3% by the selling agent in lieu of a buyer's agent, in exchange for managing all aspects of the buying side of the transaction.

Which offer is in the seller's best interest?

ANSWER: Since as listing agent I have no intention of lowering my contractual commission of 6%, your contingency renders Offer #2 worthless and hence invalid. Only Offer #1 is presentable.

In a fair world would there be some option in listing contracts to allow unrepresented buyers to receive a credit? Perhaps. But keep in mind the system is structured to encourage representation, and incentives are provided to agents to accomplish this.

If you seek a more "open" market, you're always welcome to pursue FSBO's and/or homes listed on Ebay. Otherwise, play by our rules.

Good luck with your transaction.

Here's a good question.

If there were a bidding war on a house that was $400k and an offer came in and was accepted for 412k could the listing agent ask the seller for the excess. I don't think so. Reverse your thinking for a second. It works both ways. just my 2 cents.

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Leonard Martelli
Long and Foster Realty
Leonard.martelli@longandfoster.net
http://www.RealEstateWorldNow.com
215 654-5891

OK Cobra - I see you haven't posted a response here in over a week, so I'm assuming this is all now a moot point.

You were right when you said that this would be an unpopular question in this forum.

The reason you've gotten so much negative feedback is simple. There are people who go through hours and hours of training, licensing, more training, continuing education, and spend their lives representing Homebuyers. This people are experts in their field. You come along and say, "Hey, I can do that too."

Except that you don't want to go through the training, licensing and years of experience. Not to mention the fact that Realtors pay through the nose in most places to be a member of the Board and for E&O. Now you're saying you want to be paid like a Realtor but you don't want to be a Realtor.

In essense, I think you're problem is that you don't realize just what it is that Buyer's Agents do. You think it's just a bunch of paperwork and that it's not "brain surgery". Of course that's a slap in the face to someone who does it for a living. Part of me just sat here reading this thread with my jaw on floor due to the sheer audacity it took to even post this message.

I would say that you know just enough to be dangerous. A little knowledge is a dangerous thing. I think you should return your Carlton Sheets Course and get a refund.

Number one: A Buyer's Agent doesn't "find" you a home. Not anymore. 21st century homebuyers have become very savvy and are perfectly capabale, and even willing, to "find" a home on their own. Realtor.com is free. So the Buyer's Agent value-add isn't on "finding" a home.

Two: You say you'll handle the "legwork". Problem. The Seller's Agent's job is to make sure the contract gets to closing no matter who's involved. When there is no Buyer's Agent, the Seller's Agent has to do the legwork. THe Seller's Agent CANNOT "take your word for it" that you are doing everyone correctly. The Seller's Agent will have to check and doublcheck your work... in fact, you being involved and "handling the legwork" might just make MORE work for the Seller's Agent, not less. And then you have the gall to ask that Seller's Agent for half his commission?

Three: Regardless what you're lawyer friend told you, a Brokerage (such as the one the Seller's Agent is licensed through) cannot and WILL NOT write a check as a percentage of the sales price to an unlicensed person. This is just inviting an audit, fines, penalities, and illegal wrongdoings accusations. You might have found one laywer who dislikes real estate agents (they're common) who says "sure, you can do that". But the Brokerage House might not be willing to do that... THEIR lawyer will tell them not to.

Understood?

Four: Back to an earlier point. You seem to think it's oh-so-easy to be a Buyer's Agent. Heck, most Listing Agents can't stand it when the Buyer's Agent is a first-year agent, let alone not an agent at all. If the Buyer's Agent doesn't know what s/he's doing, it creates more work for the Seller's Agent. A contract hardly ever goes according to plan, and when it breaks down or further negotiations have to be made, you need not only legal representation, but you need someone who's been through it a hundred times who's been trained in how to deal with it, and who has the personal connections to calm the fears and make the deal go through. I'll almost guarantee that if you represent yourself (which again is a misnomer because all you're doing is creating more work for the Seller's Agent), WHEN not if a problem arises, the deal will fall apart with no hope of putting it back together.

Do you choose to do your own dental work to save money?

It's not "rocket science" to change the oil in your car. But most of us don't have the time or tools to do it, so we pay $40 to have an EXPERT do it. Changing the oil isn't the problem. If the oil filter gets jammed and the wrench slips and cracks the carburator, then you're F'ed.

When problems arise is when the value of Experts becomes apparent.

Wow! Lots of great responses. I'm not sure I have the time to respond to each point, but I do appreciate all the information and opinions.

I've been traveling on business and haven't checked the thread in while. As a status update, the particular house I wanted went under contract while I was traveling, and so the search continues. While I have not abandoned the concept proposed in this thread, there have been several alternative suggestions which I am considering because they are almost as good (financially) and may prove to be considerably less hassle. Thanks again to everyone offering alternative suggestions that achieve the same objective. Keep them coming.

Dakota, great post. Thanks for sharing your recent experience and for the good suggestions... not to mention the encouraging words.

Sputrader, also a great post. Thanks for the excellent perspective, especially your 2nd paragraph. A couple things...

Quote by Sputrader:
"The key here is you're at the whim of the listing agent."

You mentioned this twice and I found it odd, especially the use of 'whim', which implies a kind of arbitrary or impulsive action. I keep going back to my hypothetical example with 2 offers. If mine is the higher offer, I think the agent is obligated to present it to the seller and let the seller decide. I find it interesting that so many of you depict the agent as the decision-maker; and even more interesting that such decisions are made whimsically.

Quote by Sputrader:
"One thing I want to make clear is that you shouldn't turn this into some sort of ethical issue with regard to 'what is better for the seller.'"

My intent was never to raise an ethical issue, but rather a contractual one. It is my understanding that the listing agent is contractually obligated to act in the seller's best interest. Many of you have expressed the opinion that the seller is MORE interested in a quick and smooth closing than the highest possible price. I appreciate that insight and I have learned from it (hopefully I can apply it to my advantage). I will tell you however that my perspective as a seller may be quite different. If I found out after the fact that my listing agent withheld an offer that would have brought a higher price, I would be more than a little upset. Reason: I am the decision-maker, not the agent. And I will decide for myself whether I am more interested in a quick, smooth closing or highest possible price. I'm quite sure there are many other sellers who are all too happy to subordinate their judgment to that of the agent.

Quote by Sputrader:
"In a fair world would there be some option in listing contracts to allow unrepresented buyers to receive a credit? Perhaps. But keep in mind the system is structured to encourage representation, and incentives are provided to agents to accomplish this."

Great insight. Thanks. Sounds a bit like a cartel... but I won't go there.

Quote by Sales dog:
"If there were a bidding war on a house that was $400k and an offer came in and was accepted for 412k could the listing agent ask the seller for the excess. I don't think so. Reverse your thinking for a second. It works both ways. just my 2 cents."

I read your post at least 6-7 times and tried to "reverse my thinking" as you suggested, but I'm at a loss to establish a relationship between your post and the subject at hand. I'm sure you had something in mind, but I'm not getting it. It seems like completely different scenarios: in my case, there is no agreement yet; just an offer with conditions that can either be accepted, rejected, or countered. In your case, what you are suggesting is contrary to an already-established contractual agreement. Perhaps if you could elaborate, I will see your point.

Quote by Drewman626:
"The reason you've gotten so much negative feedback is simple."

Actually, I've been pleasantly surprised by the number of people offering excellent insight, useful suggestions, and generally positive and encouraging responses. I was expecting more responses such as yours, but fortunately they have been in the minority.


[This message has been edited by cobra9777 (edited 04-28-2004).]

My dear Cobra, you have created quite a stir! Just a thought, but if you had employed a buyer's agent to begin with, they would have notified you while you were off traveling that another offer had come in on the property, and that you needed to come in with your highest and best offer. I suspect the property is a benign entity to you in this whole discussion, and that you are being intellectually self-indulgent by pursueing a loop hole in our system, more for kicks than financial gain. Am I right?

You are correct that this business is not brain surgery, and that being so, let it be known that few of us make a salary in keeping with that profession. But you undermine our profession when you suggest what you do - that a lay person can just walk in off the street and receive compensation for what you consider to be a few administrative formalities. I would ascertain from the many previous messages in this thread that you have struck a cord with my fellow colleagues, because you threaten a certain unspoken code of honor (dare I sound pious?), that we would rather do business and share compensation with a fellow hard working professional than with a stranger, with whom we know nothing and from whom we will gain nothing.

I suspect you do not seek financial gain in your hypothetical transactions, but rather you seek to benefit from a feeling of one-up-manship. I would even venture to say you were on the debate team in high school. Perhaps you still are......

I won't insult your intelligence by suggesting you get a buyer's agent, but I would suggest that if you have this much time to sit around thinking this out that there are much greater issues on your plate to contend with than money....

Like I said above, more than once, I would not cut my commission if I was the listing agent in this situation. I am not obligated to do so, and you better believe I wouldn't.

Think about this.... I don't know what you do for a living, but what if someone came up with a way to manipualte you, so you make less money for a month.... just to benifit themself?

I would be willing to bet, that considering the simple fact some one tried to manipulate you, just to save some money, you would do everything possible to let it NOT happen. Now, if that same person, just explained the situation to you, and asked you nicley, you would be a lot more willing to work it out and take the 1 month pay cut.

You seem smart.... use your brain and make it work.... if thats really what your after!

But this business of how to make the agent take the hit for you, combined with your approach is garbage! We are people also, just like you, out there trying to make a living.

My dear kportrealtor, I am very sorry that my search for information and advice was so offending to you that you felt it necessary to attack not just my ideas, but me personally. Say what you will about my ideas (I invite that), but I would urge you to keep the personal stuff to yourself rather than in the public domain. ...if for no other reason than it tends to undermine your arguments about professionalism and code of honor. If you must know, I am 25 years removed from high school and I was never on the debate team.

Beyond that, I would only add that your rather creative conjecture about my "real" motivation is 100% inaccurate in each case. The property and situation is quite real. My objective is exactly as stated numerous times previously, nothing more. This is not some intellectual exploration of the intricacies, inner-workings, and potential loopholes of realtor compensation. I am not driven by one-upsmanship. I'm simply trying to research and understand if there is a way to reduce my total transaction cost by managing all aspects of the buying side of the deal, as I have done successfully in a previous transaction.

Quote from pdxrealtor:
"Think about this.... I don't know what you do for a living, but what if someone came up with a way to manipualte you, so you make less money for a month.... just to benifit themself?"

Pdxrealtor, welcome back to my happy thread. In your absence, you seem to have forgotten the facts of the case. My proposal results in the exact same compensation to you (the listing agent) as the competing offer from a represented buyer, actually slightly more since my offer is higher. As a reminder, where we differ is the degree to which you will have to get involved on the buying side to keep the deal moving forward. I think none, i.e. no different than your involvement with a represented buyer (based on my past experience). You think plenty, i.e. no different than your involvment with a typical unrepresented buyer (you choose to completely discount my past experience). That is a fair point of disagreement. I understand your position fully. I think you understand mine. There's little point in re-hashing it; the prior posts cover it fully. However, I think it is misleading for you to now suggest that my approach amounts to asking the listing agent to take a compensation hit. That is not true.

Since you asked... in my profession, my compensation is about 50% fixed and 50% variable. The variable portion is contingent upon the performance of my business unit in meeting its objectives, the company's profit in total, my personal performance, the performance of my department, and the company's stock price. I deal with customers every day with creative ideas (I would never use the word manipulation) that benefit them and would cause me to have to work differently and potentially affect the bottom line in the short term, which of course potentially affects my personal compensation. There are many examples of this in my business: pricing, lead times, special payment terms, consignment inventory, guaranteed supply arrangements, etc, etc. We respond to each of these as a potential new market reality that needs to be dealt with if we expect to stay in business in the long term. We do not respond emotionally. We do not insist that they ask nicely. We carefully evaluate each request as a business proposal and either accept, reject, or counter. Customers do not like to be told, "Here's the game. Play by our rules." I love it when our competitors respond in that manner. Something to think about.

As the designated agent to our client, we owe care, skill and diligence, accounting, obedience, full disclosure, confidentiality and undivided loyalty. As a non-licensed "buyer agent", you have none of these requirements. You owe nothing to the seller and listing agent, and you owe nothing to yourself. The best we can hope for is that you continue to want to purchase the property and proceed as such.

As a result, this causes the listing agent in your situation definite additional work as he monitors you from afar, having NO assurance that it will happen. Nothing personally against you or anyone else representing themselves, it is simply that we owe to our clients these fiduciary responsibilities. When another licensed agent is involved, who also owes these items to their client, the likelihood of the transaction going smoothly increases.

Does this make sense? We do believe that you would do everything properly, but it doesn't mean we don't have to MAKE sure. You have no legal responsibility to anyone, you are not trained (whether you have personal experience or not). You do not have Errors and Ommissions insurance to protect others if you screw up somehow.

To put it frankly, the stress increases when agents deal with non-represented buyers, and this happens very frequently. In my area, the FSBO market is very strong. When I have a buyer for a FSBO, do I trust the seller even knows what to do? When they say "my lawyer is handling it", do you think I assume things will just happen? Are you aware of just what an agent does AFTER the offer? How time consuming it can be? (I am, of course, referring to good agents.)

Obviously, my answer is I would not lower my commission in anyway. In fact, it makes we want to increase it in this instance.

Cheri,
Realtor in Iowa

Hi Cobra, and hello all from a new member -

Cobra's question is one we get in Silicon Valley fairly often. It's a fair question.

I can't say how it works in Texas but here in CA the listing agreement states that the commission of X amount of dollars or % of sales price will go to the listing agent, and in the event that another agent who's a member of our MLS brings in an accepted offer, the listing agent will cooperate (share) a certain amount of that (dollars or %). That's the only exception. If a non-licensed person, such as you, Cobra, brings the offer in, the commission all goes to the listing agent. So it's between the seller and the listing agent from the very beginning, either the LA gets it all or shares with another licensee, period.

Some folks will ask me if I'll "double end" my listing and give them some of my commission. I have to explain to them that in CA only a licensed person can receive a commission, so no, I can't.

I don't like to work with sellers when a non-licensed person wants to represent him or herself (even really educated and experienced ones who are trying hard) because inevitably they don't have the knowledge (mold, clue reports, construction defects, disclosure requirements, contract subtleties, etc), the insurance etc. to do a good job. And then there's the danger of "implied agency" where if I'm the only licensed person in the deal and a non-licensed person starts relying on me I can become liable for his/her actions. It's a legal quagmire! Better to have dual agency and at least put everything on the table, IMHO.

Cobra, if you enjoy buying, renovating, and selling homes, why not get your license? Even if you used it only occasionally, the training would be of enormous benefit to you and you would be getting great discounts on buying and selling. Obviously you have the interest and are detail-oriented, so I think you'd be a great candidate for this. In most states it's 1-3 college level classes and then a state exam. The information is invaluable. Buying, fixing, and selling (while staying under the capital gains limit) is a fantastic way to make money in this country, and if you got your license you'd be able to do so more efficiently and cheaper. So I'm going to encourage you to do it

Mary Pope-Handy
Los Gatos, CA www.PopeHandy.com

That a great idea. Cobra, you should go get your RE License. Of course, it needs to be "housed" with someone. You'll need to find a company that will allow you to "house" your license with them while you have no desire to do phone duties or actually BE a RE Agent.

But the knowledge you gain just from the licensing course and a company's training course is invaluable.

Ok, I'd like to add another $0.02 here.

Scenario 1
Purchase Price - $300,000
Listing Com - 6% - $18,000
Listing Brokerage Skim - 8% - $1,440
LA Cut - 60% - $9,936

CoBrok - 0% - $0

Net to Seller - $282,000
- Closing Costs and Incedentals

Scenario 2

Purchase Price - $310,000
Listing Com - 6% - $18,600
L Brokerage Skim - 8% - $868
LA Cut - 60% - $5,989

CoBrok - 2.5% - $7,750

Net to Seller - $291,400


Of course the seller doesn't care... he's getting more money for the house. But the Listing Agent's net is being cut by over 40%.

Now, if the Buyer has a Buyer's Agent, then the 40% cut in pay is expected and welcomed. As mentioned so many times here already, the BA, who is licensed and trained and has E&O Insurance, is legally responsible to the transaction. So being able to pass of legal obligation to someone to ensure the deal goes smoothly is better than no deal at all.

The real kicker to your proposal is that the LA CANNOT rely on you to do the part of the BA. First off, the LA has an obligation to the Seller. To meet that obligation, the LA will have to check and double-check your work... making the LA's job harder. Second, if you do ANYTHING wrong, it could result in a lawsuit... no matter who's getting sued, that idea is not in the best interests of the Seller. The job here is to the sell the house, not win a lawsuit. THen, seeing as how you don't have E&O, the lawsuit would be frivolous anyway.... so now the seller could be out the house, out the contract, and out a meaningful lawsuit. Sounds like a deal that anyone would jump at.

NOW we can talk about the idea of a LA giving up almost half their income to do more work.


I guess my question to you, Cobra, is this: What EXACTLY, step-by-step, would you do to enable this transaction? Exactly what responsibilities will you handle that make it worth it to pay you $7,000?

Hey Cobra,

I can refer you to a buyer agent in TX who can REBATE a portion of their commission to you. Up to 2/3 of their commission. You can negotiate depending on how much work the agent has to do. If you find the house you can negotiate. If it's anew builder home, even better.

Prolly not best to negotiate with the sellers agent's commission. Let them be and get a buyers agent or transaction broker and negotiate with them. They would be willing to REBATE a portion of their commission to you.

I do it here in CO and know agents who do it in TX.

Simple. No need to mess with listing agents commissions.

Richard Rigor http://therigorgroup.com http://get2percentback.net

Hi Cobra, here is a section of the Texas License law that you may be interested in seeing before you take any further steps in trying to collect a commission as an unlicensed person.

§ 1101.004. ACTING AS BROKER OR SALESPERSON. A person
acts as a broker or salesperson under this chapter if the person,
with the expectation of receiving valuable consideration, directly
or indirectly performs or offers, attempts, or agrees to perform
for another person any act described by Section 1101.002(1), as a
part of a transaction or as an entire transaction.

The Real Estate Commission is in place to protect the public, meaning both buyer and seller from inexperienced persons conducting or negotiating the sale or exchange of real estate.

There are certain things that you need to know in order to negotiate a transaction. Such as the laws of your state and the consequences if the law were to be broken.

§ 1101.351. LICENSE REQUIRED.
(a) Unless a person holds a license issued under this chapter, the person may not:

(1) act as or represent that the person is a broker or
salesperson; or
(2) act as a residential rental locator.
(b) An applicant for a broker or salesperson license may not act as a broker or salesperson until the person receives the license evidencing that authority.

You may negotiate the sale of your own home or a purchase of a (your)new home without a license, but inorder to recieve COMPENSATION, not only commission you must in fact have a license or a work permit.

It is in your best interest to secure a buyers agent if you are going to be doing transations with a seller who has a licensed real estate agent working on their behalf.

If you are looking to get money back from the sale, a "commission" if you must. Get a buyers agent and ask for 3% back at close, that way you aren't taken advantage of and you have a knowledgeable person backing you up.

We are licensed for a reason, if any idiot could do it, then there wouldn't be a license law in place and real estate wouldnt be a thriving business.

In case you want to know more, here is the web address for the Texas OCCUPATIONS CODE

TITLE 7. PRACTICES AND PROFESSIONS RELATED TO REAL PROPERTY AND HOUSING

SUBTITLE A. PROFESSIONS RELATED TO REAL ESTATE

CHAPTER 1101. REAL ESTATE BROKERS AND SALESPERSONS

SUBCHAPTER A. GENERAL PROVISIONS

------------------
Jaime

And here it is since I didn't put it on the last one, sorry.
http://www.capitol.state.tx.us/statutes/docs/OC/content/htm/oc.007.00.001101.00.htm

------------------
Jaime

"Why should the selling agent get to keep it? H/she was ready, willing, and able to give it up to a buyer's agent who brought a qualified buyer to the table. That person is me, in this case."

Reason #1 - most agent's bringing a buyer to the table are SELLER's agents. They work for the seller. That is how this system was originally set up. Agent's agreed to allow each other to show each other's listings on the understanding that, as soon as that agent with the buyer walks in the door he/she works to sell that house IN THE SELLER'S BEST INTEREST. Are you working in the seller's best interest and trying to get the highest price for him? No.

(When Buyer Representatives first came on the scene, listing brokers refused to give them the "split" because the agent was representing the buyer NOT the seller. Over time, brokers realized the value of a well educated, pre-approved buyer CLIENT that was represented and had a hard time justifing excluding Buyer Reps over procuring cause and not reducing the listing commission. Still - to this day - most exclusive agency agreements read that the BUYER must pay his agent. BAs must get permission from their buyer client to request the split offered by the listing agent.

Because of this, a listing agent must encourage the seller to pay a suitable "Buyer Broker" fee, which we build into the commission. So really, the seller DOES pay the Lister X% and the Buyer agent X%

Reason #2 - As an agent, when I get paid it's not just for that one transaction. I spend hours upon hours educating buyers, driving them around, writing offers and then the buyer decides he's going to rent. I spend money out of my own pocket for advertising a listing where the seller insisted on overpricing, but promised to lower if it didn't sell and then let it expire so he could list it at the lower price with a new agency.

So, I figure I have truly earned any commission I get paid - buyer or seller side - and I do not negotiate. Our compensation is "nothing" for a lot of work and seems to be a lot of money (to the unknowing masses) for a "little" work. It all comes out in the wash for us. It has to or we would never do this job in a million years! What other business do you know of that will work and spend money for 6 months without any guarantee of payment of some kind??

So, to you, that $12,000 is payment for going to a few open houses and filling in the blanks of a contract. For us, it's just compensation for endless hours/months put in that didn't result in compensation.

So, did you "earn" that commission by our standards? I think not. Do I educate my sellers to know what is best for them and that THEY are paying 1/2 the total commission to my company and they other 1/2 to the buyer agent's company? You bet! Think they will want to pay that 1/2 straight to you - the buyer? Um, would you do that when you sell?

Just a note: I'm not hostile, just showing you the predominate attitude you will run into. And, if an agent has properly prepared their sellers, the sellers will take their side, too.

------------------
Real Estate Consultant
Milwaukee, WI
http:BestMilwaukeeHomes.com

In Iowa, we have Designated Agency at many brokerages. We work for either the seller OR buyer, unless disclosed dual. There are very few Consensual Dual agencies, where all agents in the same office work for the seller.

I would be curious if other states still operate under "all agents work for the seller". I thought this was years ago.

Cheri, Realtor in Iowa

You could also cut you own hair and save a few bucks, right?

Have you ever tried to save a few bucks by doing something yourself, and found that you actually did not have the professional training to do it correctly? Maybe you treid to fix your own car, the electric system in your home, or even tried to fix your TV or DVD player?

Sure, I bet everyone has, at least once.

And then, it ended up being a huge mess, took twice the time, and money, and in the end, you had to call an expert to come in and fix the mess, or worse yet, buy a whole new item? You ended up frustrated, short on time, and money. Why not do it right the first time, and work with a professional real estate agent?

Don't take a risk with a $400,000.00 transaction. Hire a professional, and save yourself the frustration, money, and time. It will be well worth it.

email me, and I can reccomend a great agent in the texas area that is a true professional who can save you that time, money, and frustration. You will be glad you did.

Scott
smarlow92@yahoo.com

We still do in Wisconsin. It sucks.


------------------
Real Estate Consultant
Milwaukee, WI
http:BestMilwaukeeHomes.com

The simpliest way to do this would be to negotiate it into a price discount.

Most states forbid cash rebates to unlicensed persons, i.e. buyers.



------------------
Jim Lee, CRS, ABR, GRI, e-PRO
Realty Executives Associates
Knoxville, Tennessee
http://www.KnoxvilleMLS.com
Jim@KnoxvilleMLS.com
1999 REALTOR of the year, Knoxville Association of REALTORS

I am not an attorney and am not giving you any legal advice. This response is only given for information purposes and should not be construed or substituted for legal advice.

So, did the Cobra fella ever get to buy his home? I am not a realtor, I have had experience in researching property that I wanted to buy.

Research and knowledge and clarity are always recommended. Seeking new skills and broadening horizons are great. Getting the best price a buyer can when buying a home is not only helpful to the budget, but satisfying to the soul.

I, however, see a "nitpickyness" to all the qualifying that Cobra did to the point of adsurdity. I wasn't offended by all the questions he asked. There came a point when the dialogue and debate and questions and clarifying seemed utterly futile. With the energy spent when all Cobra really was seeking was the best deal on a supposed desire for a specific house? In some of the markets I've witnessed, that house would've gone into escrow LONG before this thread came to a conclusion.

Cobra, my hat's off to you for wanting the best arrangement for purchasing a house. But I wonder at your direction.

Cobra,

Unless the TX real estate commission prohibits the paying of buyer commission rebate, go for it. I suspect it isn't illegal since Texas-based onepercentusa.com offers rebates up to 2%. They will keep no more than 1% of the buyer side commission.


>>>>>>>I find it interesting that so many of you depict the agent as the decision-maker; and even more interesting that such decisions are made whimsically>>>>

I agree. Most agents engaging in decision making are unaware that they may be breaking the law.

The arguement that it is illegal for an unlicensed individual to receive compensation from a real estate transaction is FALSE. The truth is it is illegal to receive compensation when providing real estate services for ANOTHER. You are doing it for yourself and also party to the transaction. It is perfectly legal, subject to disclosure on HUD-1.

If you can find a buyers agent that will go for your proposal go ahead. It's not illegal.

However, compensation between seller and the listing agent is in contract and determined ahead of time. This compensation is between the seller and the listing agent. The listing agent does not have to give a single dime. There may not be any commission given to the buyers agent.

What the listing agent offers the buyer's agent in compensation is between the agents. NOT YOU.

What you pay or receive as rebate from YOUR agent is between you and your agent. NOt the listing agent.

There are three seperate contracts at discussion here. The only contract you have influence over is between you and your own agent. Since you will not be using an agent, you have no leverage.

If you want a rebate, go hire someone like onepercentusa.com. What your are doing is neither illegal or unethical. It's smart consumerism.

But to beat the system you must beat it at
it's own game.

If I were the listing agent, I would not give you a single penny. I am not your agent, so I have no reason to discuss commission with you.

Your only leverage is through a buyers agent with a buyers rebate. Of course this assumes that my seller will be paying your agent's commission.

The seller may or may not offer any selling commission. You may have to pay out of your own pocket.

I will advise my clients to accept any offer that nets the highest take home, less my commission.

JABER