Discount for using listing agent to buy house?


#1

When buying a house, has anyone had luck using the listing agent and negotiating a discount based on getting them to lower their commission to the seller for representing both sides?

For example…traditional commission is 6%, split 3% to the seller’s agent and 3% to the buyer’s agent. If I use the listing agent as my agent to buy the house, would he consider lowering the 3% buyer’s commission by say 2% so I can offer a lower price that would be net neutral to the seller?

We are considering offering this to a listing agent to see what they say with the thought that they are better off with this offer to get an extra 1% (4% total) vs. us using another agent where the listing agent would then get only 3%.

Thoughts? My husband is convinced this will work and I’m convinced it won’t work.

Thanks!
Patrice


#2

You may be better off trying to get concessions (i.e. seller pays for home warranty, seller pays closing costs, etc) than trying to lower the agent’s commission. If the market is a seller’s market, most listing agents are hesitant to lower their commission. Though, getting concessions may be a better option. Hope that helps. Good luck!


#3

It has potential, but a couple of things. First, you’ll go to the bottom of their list over clients that might be willing to pay full commission in terms of priority, etc… Second, I once worked with an agent that would give a discount if you used them for repeat business, but they took off 1%. So, getting them to knock off 2% seems like a big target. Maybe 1%?


#4

My wife is a realtor and she will generally offer to knock off 1% of her commission on the 2nd transaction if you sell and buy (so 5% total rather than 6%). Logistically, this usually looks like a credit to closing costs on the HUD that comes out of her commission.

It also depends on the price point. If you’re talking about a $500k house, you’re probably going to be able to negotiate more than if it’s a $150k house.


#5

Thanks, we recently relocated so the houses are in two different states.


#6

Thanks everyone. We are taking a different approach. I found a realtor that will rebate us 2% of their commission so that works out better since I will have my own representation and get the 2% I was looking for. I think realtors are paid way to much for what they do in high priced markets.


#7

Sorry, I misread your post. Yes most listing agents would probably consider this. Some brokers will not allow the listing agent to double end the deal to avoid the liability of a potential conflict of interest.


#8

Honestly the compensation structure as a whole for the real estate industry is really wacky. Yes they charge a lot of money when a house sells, but when you factor all of those trips to show houses and time they spend with a buyer who DOESN’T buy a house, they actually LOSE money!!! And think about how often that happens. Driving clients around, showing them 10, 15, 20 houses. I once showed someone 68 houses. I only made about 2k on that deal after like a year! After my expenses, way less.

I sold real estate. In your particular situation with a “Dual Agent” I never liked it because legally, you have to walk a tight rope since you are now representing both sides. If you start lobbying for one side or the other, and the other party gets wind of it, you can be sued.

If you are going at it on your own, make sure you have the MLS access so you can identify the trends current solds, pendings, etc so you can negotiate on that. Good Luck!