Buying a house
- Thread starter Danadu
- Start date
NEW -> Contingent Buyer Assistance Program
In order for a buyer agent to show you a home, they are technically requested to have the buyer sign a Buyer Representation Agreement which does create an exclusive agency relationship between the buyer and buyer agent for up to 90 days. The buyer can limit it to just one home or a city or a county. If you sign the Agreement you are bound to that agent unless you have a cancellation signed.
Sellers are still paying out buyer agent commissions via seller concessions in the RPA. I don't see things changing a lot in the longer term other then more forms and disclosures needing to be signed. Every listing that I called on the listing agent said that the seller is willing to pay a seller concession for the buyer agent commission as are my sellers. Where things will change is where a home is hot and gets 5-10+ offers, the sellers will have the ability to negotiate the seller concession below the "market" buyer agent commission and on the other side where a listing has been lingering on the market for a while buyer agents may request a higher seller concession (2.5% or 3%). So in a way, the buyer agent commission has become negotiable.
1. On top of the 2% seller concession paid to buyer's agent, does seller still pay 5% to his own listing agent, or half of it (2.5%)?
2. With a seller's concession, does buyer also pays buyer's agent? That is, does buyer's agent get double paid from both the buyer and the seller?
3. If the seller refuses to pay any seller's concession, how can the buyer's agent make sure that he gets paid for his work? Can he specify his commission in his Buyer Representation Agreement?
2. Currently, in a buyer's market, the seller's concession just means that things are as they have been, meaning seller pays 4% total.
3. Buyer's agent could sign an agreement with buyer before taking on the job. Then buyer's agent would mostly steer buyer toward a seller would pay both agent's commissions. Since this information cannot be listed anymore, it's communicated via other formats. Unless, of course, buyer really really wanted to check out a certain home.
In the previous listing contract, does it specify how the 4% total commission is going to be split between two agents? Or it simply specify that the listing agent's commission is 4%, and then the listing agent determines by him or herself how much h/she wants to split?
1. The seller pays whatever the commission they agree to with the listing agent on the listing agreement (most are 2% today) so if the seller offers up a 2% seller concession they are paying 4% total commission.
2. The buyer agent does not get a double paid. The buyer agent can get up to the commission listed on the buyer representation agreement. If the buyer representation agreement has a higher commission than what the seller if willing to offer then the buyer agent can try to get the buyer to pay the difference (not something I'd recommend if you want to build relationship) or they can revise the commission amount on the buyer representation agreement to match the commission offered via the seller concession.
3. If the seller does not offer any seller concession then the buyer agent has a decision to make if he'll ask his buyer to pay them anything (technically the agent could ask their buyer to pay them whatever they agreed to on the buyer representation agreement. That being said, sellers not offering a seller concession is will complete one offs and they won't get buyer agents showing their homes.
The previous listing agreement has a section where to put the total commission for the transaction and then another section where you put in the buyer agent commission so the seller and listing determine how the total commission is split between the listing agent and buyer agent. In the new listing agreement, you have the listing agent commission and then you have a section where you can put a commission if a buyer is not represented by any agent (retired real estate agents, lenders, and lawyers) because there is more work dealing with an unrepresented buyer (I'd have 2 buyers like that on my listings over the years).
sgip
Well-known member
I'll reply to a bit of this. Another Realtor can fill in the gaps.
In this highly litigious environment, you cannot represent yourself. A Realtor will not accept an offer without evidence of a Buyer Agency form, or evidence that you are a Realtor representing yourself, or an attorney - and even then they may not take the offer.
You may be tied to that Agency unless documented otherwise. If the expiration of the Buyer Agency isn't in writing anywhere, it never existed and you could be on the hook.
As a side note, if you're "on the hook" for wasting a professional Realtors time and efforts, shame on you for getting in that position to begin with. It's unbecoming to talk to an auto mechanic and get a complete diagnosis of your cars issues only to run to a less costly mechanic to get a work done. Engaging a Real Estate Professional is on that same level. It means, dear reader, that you need to vet your Buyer's Agent thoroughly. If you hire a clown, don't be surprised when a circus breaks out during your home purchase. I can assure you, the circus is coming to town with many, many of these "realtors" out there. Simply put, when you hire a professional, and things simply don't pan out, paying that professional for their time and effort is the right thing to do. End of rant.
The Buyer's Agent Commission is negotiated before an offer is put in. The seller's Realtor may counter back with "yeah, we'll take the offer, but only pay $500, not $10,000 as per your offer". In that case, your Realtor will likely ask you to pay the remainder - $9,500 in this scenario - but that's rarely going to happen. What will happen is if the offer is one of several that come in, the Seller's Realtor may say, "yeah, since there's so much interest in this property, we'll take the offer, but pay $5,000 (assume 1 percent here) commission. In that scenario, the Buyer's Realtor may say "OK, I'll take the 1 percent", or "hey, I'm worth 2 percent, so please pay me the additional $5,000" or some other arrangement.
Since in reality, very, very little has changed here, the Buyer's Agent will ask for X percent - the amount they traditionally make (make, not earn, mind you) and the Sellers Agent - who has prepped the seller to accept X percent anyway, will pay that X. The differences now are first, disclosure is more detailed and strictly enforced - not a bad thing - and second, lots and lots of CYA paperwork, but the $$$ is hardly changed at all.
Hope this helps.
In this highly litigious environment, you cannot represent yourself. A Realtor will not accept an offer without evidence of a Buyer Agency form, or evidence that you are a Realtor representing yourself, or an attorney - and even then they may not take the offer.
You may be tied to that Agency unless documented otherwise. If the expiration of the Buyer Agency isn't in writing anywhere, it never existed and you could be on the hook.
As a side note, if you're "on the hook" for wasting a professional Realtors time and efforts, shame on you for getting in that position to begin with. It's unbecoming to talk to an auto mechanic and get a complete diagnosis of your cars issues only to run to a less costly mechanic to get a work done. Engaging a Real Estate Professional is on that same level. It means, dear reader, that you need to vet your Buyer's Agent thoroughly. If you hire a clown, don't be surprised when a circus breaks out during your home purchase. I can assure you, the circus is coming to town with many, many of these "realtors" out there. Simply put, when you hire a professional, and things simply don't pan out, paying that professional for their time and effort is the right thing to do. End of rant.
The Buyer's Agent Commission is negotiated before an offer is put in. The seller's Realtor may counter back with "yeah, we'll take the offer, but only pay $500, not $10,000 as per your offer". In that case, your Realtor will likely ask you to pay the remainder - $9,500 in this scenario - but that's rarely going to happen. What will happen is if the offer is one of several that come in, the Seller's Realtor may say, "yeah, since there's so much interest in this property, we'll take the offer, but pay $5,000 (assume 1 percent here) commission. In that scenario, the Buyer's Realtor may say "OK, I'll take the 1 percent", or "hey, I'm worth 2 percent, so please pay me the additional $5,000" or some other arrangement.
Since in reality, very, very little has changed here, the Buyer's Agent will ask for X percent - the amount they traditionally make (make, not earn, mind you) and the Sellers Agent - who has prepped the seller to accept X percent anyway, will pay that X. The differences now are first, disclosure is more detailed and strictly enforced - not a bad thing - and second, lots and lots of CYA paperwork, but the $$$ is hardly changed at all.
Hope this helps.
sleepy5136
Well-known member
I foresee what will end up happening with the NAR changes will be that seller will have the home listed at $X and if you want your buyer agent to get paid by the seller, you will buy the house for $X + $Y. $Y being the commission the buyer agent gets. But of course that depends on the market conditions as well. If it does become a buyers market, it might end up being the same as before.
sgip
Well-known member
Bear in mind that the Buyer has always paid the Buyers Agent Commission via the final price the Seller agrees to. Even in a "Buyers Market" the Buyer still pays a higher price by keeping the commissions paid within the sales price. The only time this is different is when the price is reduced by X (X being the commission due) and paid by the buyer directly.
sleepy5136
Well-known member
Pointing out that buyers were always paying for the buyers agent commission doesn't necessarily address the actual changes and instead causes more confusion for the buyers.
With the NAR changes, the buyers will not be able to finance the buyers agent commission so it will need to be cash out of their pocket. The way around this is to add the commission amount for the buyers agent on top of the list price. There may be other options as well but this was the option I thought of from writing the post.
With the NAR changes, the buyers will not be able to finance the buyers agent commission so it will need to be cash out of their pocket. The way around this is to add the commission amount for the buyers agent on top of the list price. There may be other options as well but this was the option I thought of from writing the post.
usctrojancpa
Well-known member
In order for a buyer agent to show you a home, they are technically requested to have the buyer sign a Buyer Representation Agreement which does create an exclusive agency relationship between the buyer and buyer agent for up to 90 days. The buyer can limit it to just one home or a city or a county. If you sign the Agreement you are bound to that agent unless you have a cancellation signed.
usctrojancpa
Well-known member
Sellers are still paying out buyer agent commissions via seller concessions in the RPA. I don't see things changing a lot in the longer term other then more forms and disclosures needing to be signed. Every listing that I called on the listing agent said that the seller is willing to pay a seller concession for the buyer agent commission as are my sellers. Where things will change is where a home is hot and gets 5-10+ offers, the sellers will have the ability to negotiate the seller concession below the "market" buyer agent commission and on the other side where a listing has been lingering on the market for a while buyer agents may request a higher seller concession (2.5% or 3%). So in a way, the buyer agent commission has become negotiable.
irvinehomeowner
Well-known member
In the early days of Redfin... they asked me to request the seller's agent to show me a home.
I remember for one house, the Redfin agent actually met with me outside the house, but didn't go in with me to tour it.
I stopped using Redfin after that experience, but I think they are like more traditional Realtors now.
I remember for one house, the Redfin agent actually met with me outside the house, but didn't go in with me to tour it.
I stopped using Redfin after that experience, but I think they are like more traditional Realtors now.
talkirvine
Member
This is an interesting topic. A few questions:
1. On top of the 2% seller concession paid to buyer's agent, does seller still pay 5% to his own listing agent, or half of it (2.5%)?
2. With a seller's concession, does buyer also pays buyer's agent? That is, does buyer's agent get double paid from both the buyer and the seller?
3. If the seller refuses to pay any seller's concession, how can the buyer's agent make sure that he gets paid for his work? Can he specify his commission in his Buyer Representation Agreement?
CalBears96
Well-known member
1. This has NEVER happened in California, as far as I know. In the past few years in Irvine, seller pays a TOTAL of 4%, which is split between seller's and buyer's agent. In the buyer's market, it's usually 1.5% to listing agent and 2.5% to buyer's agent. The most a California has paid for is 5% total. There are some cases where listing agent asks for 6%, but never 5% for just the listing agent. This goes as far back as when I sold my home in San Jose in 2006.
2. Currently, in a buyer's market, the seller's concession just means that things are as they have been, meaning seller pays 4% total.
3. Buyer's agent could sign an agreement with buyer before taking on the job. Then buyer's agent would mostly steer buyer toward a seller would pay both agent's commissions. Since this information cannot be listed anymore, it's communicated via other formats. Unless, of course, buyer really really wanted to check out a certain home.
talkirvine
Member
So basically the same old practice? Except that buyer's agents now need to find out other ways (such as by emails and calls) to find out how much concession each seller is willing to pay.
In the previous listing contract, does it specify how the 4% total commission is going to be split between two agents? Or it simply specify that the listing agent's commission is 4%, and then the listing agent determines by him or herself how much h/she wants to split?
CalBears96
Well-known member
The listing agreement itself just says 4% or 5%. The split is up to the listing agent. Buyer's agent's commission usually showed in the listing itself. I don't know if it showed on MLS, but Zillow showed the % for the buyer's agent. But this part in the listing is gone now. However, listing agents can still communicate this part via text messages, etc. So yeah, it's basically just the same as before.
usctrojancpa
Well-known member
1. The seller pays whatever the commission they agree to with the listing agent on the listing agreement (most are 2% today) so if the seller offers up a 2% seller concession they are paying 4% total commission.
2. The buyer agent does not get a double paid. The buyer agent can get up to the commission listed on the buyer representation agreement. If the buyer representation agreement has a higher commission than what the seller if willing to offer then the buyer agent can try to get the buyer to pay the difference (not something I'd recommend if you want to build relationship) or they can revise the commission amount on the buyer representation agreement to match the commission offered via the seller concession.
3. If the seller does not offer any seller concession then the buyer agent has a decision to make if he'll ask his buyer to pay them anything (technically the agent could ask their buyer to pay them whatever they agreed to on the buyer representation agreement. That being said, sellers not offering a seller concession is will complete one offs and they won't get buyer agents showing their homes.
usctrojancpa
Well-known member
The previous listing agreement has a section where to put the total commission for the transaction and then another section where you put in the buyer agent commission so the seller and listing determine how the total commission is split between the listing agent and buyer agent. In the new listing agreement, you have the listing agent commission and then you have a section where you can put a commission if a buyer is not represented by any agent (retired real estate agents, lenders, and lawyers) because there is more work dealing with an unrepresented buyer (I'd have 2 buyers like that on my listings over the years).