When an agent wants to buy my house

[barnowl]

What is the name of your state? California

I have an offer on my house from a realtor. I pointed this out to my agent that the "buyer" is an agent. He had not disclosed this when making the offer. Since I would have to pay him 3% commission, can that fee be used as a negotiating tool in counter offers so he will come up closer to my asking price?

[BelizeBreeze]

Originally Posted by barnowl

What is the name of your state? California

I have an offer on my house from a realtor. I pointed this out to my agent that the "buyer" is an agent. He had not disclosed this when making the offer. Since I would have to pay him 3% commission, can that fee be used as a negotiating tool in counter offers so he will come up closer to my asking price?

are you talking about your agent's fee or the purchaser's?

[barnowl]

I am referring to the purchasing agent's fee. My agent has already stated he wouldn't reduce his fee.

[justalayman]

Originally Posted by barnowl

I am referring to the purchasing agent's fee. Myagent has already stated he wouldn't reduce his fee.

How do you know that each RE brokerage gets 3%.? Is it in the actual contract as such? If so, the simple answer is yes. If no, then the following would apply.

Unless they do something different in California (boy is that a loaded statement), you actually pay your RE agent the full 6% and through a cooperative agreement his brokerage splits it with the buyers agent/brokerage (it isn't always a 50/50 split). If this is the case and you want to use this to your advantage, you will have to get the buyer to agree to no commision on his part. He would also have to have his principle brokers agreement (if any of the commission goes to him) to make no money on the deal as well.

This can become confusing if all do not agree and you want to use the commission as a bargaining tool. You, very simply put, would have to raise the selling price to counter any savings the buyer would gain by, essentially, being paid by you to buy the house. Now your agent will be thrilled because he gets a bigger commission from that type of deal. This gets into complicated numbers.

The simplest thing is just to realize you expect a certain price. If that price is met, make the deal. If it is not met, don't sell and don't worry what the RE agents get. WHile this may sound like it is cutting your own throat, you need to look at as simply put, your price has been met. You will realize the same profit no matter who buys, the buyer will of course, be getting a discount though.

[barnowl]

Thanks for your reply. Yes my agreement with my agent is 6% (split 50/50 with any other buyer's agent")
I have reduced my asking price twice although I feel it is still below fair market value in order to allow for any needed work. At one point I agreed to sell way below the asking price but that buyer bailed out to go remodel some property in another state. Since my agent knows that I was willing to settle at that time-even though I say it was a mistake, It seems he is using that figure as his guideline now to just be over with it all. He says he is looking out for my best interest and doesn't want it to stay on the market too long (6 months now). I feel the buyer/agent could use his fees toward my asking price since this is for his personal use and it would still be far below what I have now countered to him.

[BelizeBreeze]

Originally Posted by barnowl

Thanks for your reply. Yes my agreement with my agent is 6% (split 50/50 with any other buyer's agent")
I have reduced my asking price twice although I feel it is still below fair market value in order to allow for any needed work. At one point I agreed to sell way below the asking price but that buyer bailed out to go remodel some property in another state. Since my agent knows that I was willing to settle at that time-even though I say it was a mistake, It seems he is using that figure as his guideline now to just be over with it all. He says he is looking out for my best interest and doesn't want it to stay on the market too long (6 months now). I feel the buyer/agent could use his fees toward my asking price since this is for his personal use and it would still be far below what I have now countered to him.

then unless you have a signed contract to purchase you have two choices: sell and pay the commission or decide to keep looking for a buyer who will pay your price.

[justalayman]

Originally Posted by barnowl

Thanks for your reply. Yes my agreement with my agent is 6% (split 50/50 with any other buyer's agent")
I have reduced my asking price twice although I feel it is still below fair market value in order to allow for any needed work. At one point I agreed to sell way below the asking price but that buyer bailed out to go remodel some property in another state. Since my agent knows that I was willing to settle at that time-even though I say it was a mistake, It seems he is using that figure as his guideline now to just be over with it all. He says he is looking out for my best interest and doesn't want it to stay on the market too long (6 months now). I feel the buyer/agent could use his fees toward my asking price since this is for his personal use and it would still be far below what I have now countered to him.

There is a funny thing about real estate. While an appraiser uses his education and logic to arrive at the value of a property, the market is the true appraiser. If a property will not sell at a given price, then it is probably overpriced for what it is. An appraiser's appraisal is actually (hopefully) a well educated guess.

I used to be involved with real estate many years ago. I often had clients that "wanted" a certain price for their home. The problem was, it was unrealistic to expect that price. Now if they would sell only at an inflated price, I often refused to take the listing knowing it was a lost cause. If they could be educated, then we continued talking.

The other thing is, your agent, obviously, does not make any money on your home unless/until it sells so, yes, he is in a hurry to get things moving. Hopefully not to your unjustified detriment

So it comes down to you. You get to set the ultimate selling price. If you want to set a firm price and no less, then do it. If it does not sell, the market has judged it to be overpriced.
In the same vein, don't agree to a low price just because the agent does not want to keep working at this home sale.

[nextwife]

And FYI: the 6% commission is NOT normally divided in half between brokerage firms. In my market, the listing firm gets 3.6% and the selling firm gets 2.4%. So you may be working off a false presumption.

[justalayman]

Originally Posted by nextwife

And FYI: the 6% commission is NOT normally divided in half between brokerage firms. In my market, the listing firm gets 3.6% and the selling firm gets 2.4%. So you may be working off a false presumption.

I agree. This is why I also stated this earlier. I have seen deals where one side or the other's share was near nil for one reason or another.

[wanabath]

Originally Posted by barnowl

What is the name of your state? California
Since I would have to pay him 3% commission, can that fee be used as a negotiating tool in counter offers so he will come up closer to my asking price?

Have you accepted the offer?? Then it is done. You were happy with the price and accepted it, the fact that the buyer is a realtor and will be payed his 3% commission is beside the point. And yes he should be paid his commission.

[MGNiko]

I'm a real estate broker and buy lots of houses for my own investment. #1 I always disclose that I'm a licensed agent as that's required in my state. #2, I don't negociate my comission. I'm still acting as an agent, bringing you a qualified buyer (me). Generally though I will have my comission put towards closing costs. For example, say the comission is $8,500 that you were going to pay for the buyers agent (3%). I would do an addendum that says buyers agent to receive $0 comission, seller to pay $8,500 of buyers closing costs, prepaids, and reserves. But I do find it unreasonable that just because the buyer is also an agent you wouldn't want to pay his comission. You were going to pay it anyway, and usually agents are good enough for you to know that you've got a done deal. Hope this helps!

[HomeGuru]

Originally Posted by barnowl

What is the name of your state? California

I have an offer on my house from a realtor. I pointed this out to my agent that the "buyer" is an agent. He had not disclosed this when making the offer. Since I would have to pay him 3% commission, can that fee be used as a negotiating tool in counter offers so he will come up closer to my asking price?

**A: by law and Realtor standards of practice, the Buyer if a licensed agent, must disclose his RE licensing status.