Selling a home and the related commisions

[Cullenator]

On 8/18/2024 at 4:27 PM, toldozer said:

They're still going to get paid out of the pot that goes to the seller in terms of concessions 80% of the time. If your home is tip top and priced right you may have a buyer willing to pay their agent but if it's on the market longer than a day that concession to the buyer is going to be part of most offers from buyers.

Having just gone through the sale and purchase process...

On our purchase, we bought from one of the iBuyers.  They made it very clear that they were giving no concessions beyond adjusting to the appraised price (-6k).  With them holding as much inventory as they do in the market I bought in and their willingness to let us walk, Im guessing that number is going to be lower than 80%. 

On the sale side I have a hard time believing a buyers agent will leave their payout up in the air until Inspection Objection and Resolution when those concessions are negotiated - although Im guessing you're implying that it would be part of the initial offer but even that would leave it up to that final negotiation.  Its a hella risky game to play to count on it coming out of the sellers pocket.  I can absolutely see the sellers forking over some portion but at the end of the day I cant see why a buyers agent would sign with a client that didn't agree to the fact that they were ultimately responsible for their commission.

 

It does kinda blow my mind how many agents seem to be so determined to get paid by the seller as opposed to their client.

 

Edited August 20 by Cullenator

[toldozer]

1 hour ago, Cullenator said:

Having just gone through the sale and purchase process...

On our purchase, we bought from one of the iBuyers.  They made it very clear that they were giving no concessions beyond adjusting to the appraised price (-6k).  With them holding as much inventory as they do in the market I bought in and their willingness to let us walk, Im guessing that number is going to be lower than 80%. 

On the sale side I have a hard time believing a buyers agent will leave their payout up in the air until Inspection Objection and Resolution when those concessions are negotiated - although Im guessing you're implying that it would be part of the initial offer but even that would leave it up to that final negotiation.  Its a hella risky game to play to count on it coming out of the sellers pocket.  I can absolutely see the sellers forking over some portion but at the end of the day I cant see why a buyers agent would sign with a client that didn't agree to the fact that they were ultimately responsible for their commission.

 

It does kinda blow my mind how many agents seem to be so determined to get paid by the seller as opposed to their client.

 

So the way it will work is buyers will sign off on being responsible for the payment of the commission.  If it can be negotiated as part of the purchase that would be the goal.  Again if a home has been sitting on market seller would be dumb not to agree.  What no one anywhere can answer for me is how as agents we can know for sure that the buyer has the ability to pay the fee after whatever closing costs and down payment they are responsible for as we don't get all of their financial info like lenders do.  Is the option to sue if they can't hold up their end of the buyers agreement that they sign?  Firms I've talked to have basically said well we don't want to worry about the possibility of that.  If you sue a client for commission I'm assuming you wouldn't be getting any repeat business.  If you're buying and selling maybe the agent says hey I'll rep you on the buy side with no guarantee of payment if you list with me.  Again the people that this effects the most is going to be first time home buyers. 

Edited August 20 by toldozer

[PantherChris]

Reading the OPs post just tells me he hasn't got a clue about how much they actually do. 

[Cullenator]

31 minutes ago, PantherChris said:

Reading the OPs post just tells me he hasn't got a clue about how much they actually do. 

That was the point of the post.

 

I was asking for someone to educate me.

[CanadianCat]

5 hours ago, Cullenator said:

That was the point of the post.

 

I was asking for someone to educate me.

The industry like most is dominated by the top 20%. The top 20% can make a 7 figure income, while the bottom 80% are mostly your average joes.

There is no second place
The thing to remember as an agent is that there is no second place. Either you get the listing/sale or you dont. You can be working with a perspective seller for ages, giving them free consulting advice or home valuations and at the last second they might choose another agent to list with.. cause thats their kids friends dad.. You did all the work - you get nothing. 

As an agent you might even be working with a buyer for months trying to find the perfect house only for them to really just 'like looking' and never being serious - you get nothing. 

The best (beginner) agents will sit on the phone all day long, talking to people, volunteering on community organizations and being out in the community as there is a 'guilt' factor with selecting one. If Agent Bob is on your church committee there is a higher chance than not that you will hire him over the agent you see in a bill board.  

Once your successful..
Once you have made a name for yourself it gets easier. People just think of you because they have seen your sign or they know of someone that have used you. Eventually people just start calling you. 

The easiest way to make money as an agent is to get the listing. Once you get the listing your only need to post the listing and now all the other agents are trying to find a buyer. The best way to get listings is to do all the things previously mentioned. 

 

Its not fair. 
Because there is no money for 2nd place, agents are known to try to steal listings, or they will offer less of a split commission. AKA The listing agent will get 4% the selling agent will get 2%. 

When an agent lists the sale like that some buying agents will simply not show your home to their clients.. even it ifs what they are looking for. So as a home owner, you should ask how they intend to split the commission. 

Years ago I hired the top agent in our area to sell my home. They sold it in 24 hours and I paid THOUSANDS in commissions. I mentioned how I thought it was kind of BS that he "did nothing" and I paid so much. His response was one that has stuck with me. He said, "when you hire me, you are paying for the 30+ years of experience that I have. Because of my experience I have a book of 30 people that are looking for a 500k home and 40 people looking for a 400k home. I can sell your home fast people I have built a book of business. That is what you are paying for"
 

So I would agree that I think that agents make too much money for what they do. But I also have seen far too many people get into real estate, only to quit and go back to their regular job because they always came in 2nd. 

Happy to answer more questions if you have. 

Edited October 2 by CanadianCat