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If You Find Your Own Buyer Will Your Real Estate Agent Take Less Commission
Dated: September 29 2017
Through some twist of fate, maybe you've found your own buyer without the help of your real estate agent. And now you finally have an offer in hand from a friend of a friend (of a friend?). Congrats, my friend! But does that mean your agent will take less commission?
It's a common misconception that landing a buyer all by yourself means you're off the hook for paying your listing agent. Sure, the goal of selling a home is to find someone to buy it, but a lot goes into actually finalizing the sale—most of which is facilitated by that agent. So if you've signed a contract with an agent that outlines the terms of payment, there's a good chance you're beholden to that amount. And that includes the commission as stipulated therein—even if you’re the one who finds the buyer.
You could ask your agent to reduce the commission, but be aware that he or she is not obligated to do so.
Why your agent should still get some commission
Besides finding you a buyer, real estate agents do a lot to earn their keep. In fact, finding a buyer is only one of many responsibilities an agent has. “They can spend thousands marketing a property,” says Rachel Collins Friedman, a Realtor® with Sotheby’s International Realty in San Diego, CA. This means placing newspaper ads, hiring a photographer and home stagers, and paying for premium placement on listing sites. In other words, making your home look its best.
After you accept the buyer’s bid, the agent is doing all the paperwork, including liaising with the buyer's agent or legal representatives. Don’t underestimate the amount of detail that goes into a sale and the amount of expertise you need to navigate a sale smoothly. All of that effort takes time.
Negotiating an agreement with a real estate agent
Before signing an agreement with an agent, you have the opportunity to discuss the services that he or she will provide for you and how much you will pay for that help. If you're set on paying a lower commission fee, make sure it's outlined in your listing agreement, but keep in mind, if you're planning on paying less, your agent may only be able to help you with a limited number of things.
As with everything in life, you get what you pay for.
The agreement should outline the commission you agree to pay (a typical real estate commission is 5% to 6% of the house's sale price, with about 3% going to the seller's agency), whether you can cooperate with other agents, the agent's responsibilities, the length of the contract, and whether you can cancel the contract. “Many of these things are negotiable," says Denise Supplee, a Realtor and co-founder of SparkRental in Doylestown, PA.
And when it comes to the commission, it's important to agree on everything in writing before the selling process begins.
For Mark Ross, founder of Ross NW Real Estate and professional real estate broker, real estate has always been the career of choice. During his 25+ years in the industry, Mark has gained experience in....