REAL ESTATE COMMISSION

Welcome BREAKINNEWS!

Thank you for asking this question, for that is ours also. We are trying to find a buyer for our first deal, which we closed on last month. A Realtor asked if one of his clients purchases, would we pay his 2.5% commission. Is that the going commission for a Realtor? Must we pay his commission, or is that something his client is supposed to pay? We would not mind paying his 2.5% commission if he is also willing to inform his investor clients about our future deals. Also, we are not listing with a Realtor, which we later found was his main reason for calling!

Thank You,

JoyMD

Since it is a FSBO it is completely negotiable. You don't have to pay the Realtor's commission, but the realtor might then turn around and take their buyer elsewhere. In today's market it is normal for the seller to pay the commission because the buyers have all the leverage. Normal agents fees are 3%, so 2.5% is not too terrible.

You also have to ask yourself can you afford to pat their commission? It is going to cut into your profits, but if it still leaves you with plenty of profit then I personally would pay it. I build this fee into my profits in case a realtor does bring me a buyer, I am willing and able to pay them. I have even offered to pay a $1000 bonus to any agent who brings a buyer.

If it's an insane deal, the agents will know that, tell them you can't pay their commission because there isn't enough room for profit on such a great deal. The cash buyers I have dealt with through agents so far, don't care about paying their agents commission as long as it's an insane deal!

If nothing else this will have agents calling you saying they have investors/buyers. If the deal just isnt for their buyer, you have now networked with real estate agents that work with cash buying investors or retail buyers and are investor friendly! The next deal you get you can call or email these agents with you new property to see if they have an interested buyer!

This business is all about networking!!!!!!!!!

Sbrooks6
MyrtleHouseHunters.com

Thanks Sean!

So when you pay the Agent/Realtor, you select to pay either the $1000 bonus or the agent's fee? If you select to pay commission, is the amount of commission the part that is negotiable?

Thank You,

JoyMD

There is no such scenario as if you're using my time and resources for a deal and you can't afford to pay me. I've had this before and the "well if I pay you all i'll have left is ^%$# and you'll be getting paid more than me" and that then was proceeded by my buyer(s) backing out of the deals.

Everything should be negotiated beforehand and in writing; there is no standard way of doing things, but if you come to me, and you're new, I need to make sure you're serious and would expect you to be responsible for my fee. After time, if you need some assistance i can work on getting my fee from my buyer as a favor if we've worked together.

Most agents are flexible but never tell them you can't pay their fee if you're using their resources

If you tell an agent you won't pay their fee upfront, most will be reluctant to work with you. Many are reluctant to work with investors even if you are offering 4% commission plus a bonus!

Realtors can bring you many buyers. It's in your best interest to keep a good relationship with them. However, if that buyer they have is low balling you, and you are fine with making a small profit, let the agent know I can accept that price but unfortunately can't pay your fee, or your can counter offer and let them know at this new price you can pay their fee. Normally it's a deal sweetener for the end buyer to agree upon a price if the seller is paying the agents fees..

I think the operative word here is "no agent in their right mind" will work with you, not just "most".

Usually, when you're new, you don't have a lot of room to negotiate because you don't have a track record. I can't tell you how many people I have worked with as an investor who don't really bring anything to the table. So why would a real esate agent do a special deal with you? Elix's answer above is spot on.