Re: Realtor commission question
Posted by steele in minnesota on September 24, 2008 at 05:48:51:
In Reply to: Realtor commission question
Posted by Anthony on September 23, 2008 at 18:53:05:
Being a Realtor (C) I'll probably be accused of being one sided but I think I can give you both sides of the coin (and the edge as well).
The fair market value of an average property does include a real estate fee/commission. If one doesn't pay it as a For Sale By Owner, that is added profit. If you got full market price. (Whether one chooses to believe it or not, such sales tend to net less because buyers know when a seller is not paying fees and will often reduce offers in order to share in the savings. In some cases buyers have been known to negotiate away any savings the seller might have realized. Another reason an owner selling himself nets less is that an individual seller can only reach a portion of the buying public. "Listed" properties are reaching a much greater number of buyers throught the MLS. More potential buyers, better offers. Economics 101.)
That said, there are actually two fees that are paid in the average transaction. Buying side and selling side. And it is "wrapped" into the price. In other words, it is already part of the price. Who is paying this? The seller? The buyer? I would say both. It is a cost of the transaction (along with a bunch of others).
In your case you are acting as the listing agent and have a right to that listing share. So if average total fees in your area are say, 5.5% (there is no set fee) and that is divided by two, the buying side agent might be asking for 2.5%.
Speaking of negotiating, the buyers and their agent many times have a contract that includes a payment clause. In the past this wasn't the case so sellers could directly negotiate the fees. Today one needs to be a bit careful as that can be construde as interfering with a contract. Just giving a head's up.
Ultimately, I would look at a net price that is satisfactory to you. The buyer has a right to wrap this buyer agent fee into the offer. And you have a right to the listing side fee as you acted as your own agent. But it is still a buyer's market almost everywhere.
Play around too much and you could lose this buyer. And frankly, having an agent involved could also be helpful to you as well. Having been on that side of things myself I can tell you that I always ended up doing part of the work that a listing agent would have performed because the owner simply wasn't that knowledgeable of all the little things that needed to be done. In fact, my fee for a "FSBO" was slightly higher than a Realtor (C) sale as I did a lot more work.
Again, in the end all parties must feel good about the transaction. I would wait to see what is asked of me as a seller, then negotiate with the buyer to reach acceptable terms. Personally I would not alienate the buyer agent by trying to mess with his/her fees. Instead I would negotiate on net price. It is no different than negotiating when they ask for seller paid closing costs or other concessions.
Make sense?
Let us know what happens.
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