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[This message has been edited by RXAggie02 (edited 4/16/2014 7:29p).]

This thread started out as a good discussion of the nuances of negotiated Realtor commissions but unfortunately has digressed to a litany of why people shouldn't pay Realtors at all.
Short answer to the 'Realtors don't do anything' crowd: don't hire them.
Slightly longer answer to the same crowd: everything is negotiable, so negotiate a rate you think they deserve.
Slightly even longer answer is along the lines of the economics question of Why Michael Jordan doesn't mow his own lawn. Because he can make more money doing what he does best during those hours. There are a lot of things I'm pretty good at, or I could learn pretty easily but I still hire people to do them so I can be out making top dollar at what I do best during that time. Do what only you can do-farm out the rest.
Other reasons people think Selling/Buying is so easy: it's only a lot of work if you do it. You can bumble thru and get lucky and nothing goes wrong. But these forums are full of people asking "can I get my money back if I forgot to do this or ask that..."
Or the other reason: there's probably another agent there doing both sides leaving one side to think "man, this was easy"

If your are talking to me point, that is not what i intended. Rather I intended to say, Sory Jmazz for not using you and saving alittle bit of cash but still paying someone to do the work!

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Don't hate! I paid 6% (3% to my agent, 3% to buyer agent) I knew the market was good, but we had 16 showings (with buyer agents) in 3 days and 4 solid offers on the 3rd day. Next time MLS with a flat fee JMAZZ or try to be a "trend setter" and offer 0% commish to the buyers agent and let the buyer pay the agent 1-3% for the work THEIR agent did for THEM.

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This actually helps make my point. And I know you RX and I know your Realtor and you are both great people and I'm happy it worked out well for you. But...what do you think generated those showings and offers? I'll let you in on a secret...it was the MLS listing...period. (And the ridiculous market right now didn't hurt either.) Now had your listing agent not offered commission to a buyer's agent...there would have been zero showings and zero offers...period. So offering 0% commission is not realistic in today's real estate market. However, it might be one of these days when buyers are expected to pay their own Realtor (if that ever happens). I have had offers on the last 5 flat fee listings I've taken in the first 48 hours on market. (No joke.) 3 were full price offers. 1 was negotiated and eventually agreed to and the last is currently in negotiations. So, while your 16 showings in 3 days with 4 offers is impressive...you would've have the exact same results with my flat fee listing, Joe Blow's flat fee listing or any other 6% Realtor's listing. Why you chose the more expensive route I don't know. I'm not here to bash that route. I'm here to offer a unique selling option to seller's seeking to save a buck while harnessing the power of the MLS and full brokerage service for a flat fee versus traditional listing commission. To many, it's a no brainer.

Jazz- do you really think there would be zero offers if there wasn't a commission specified for the buyers agent?

First...you have to specify the commission being offered to a buyer's agent. It is agreed to at the time of executing the listing agreement with the seller and it is noted on the MLS listing itself for all agents to see.

Second...I suppose you could put zero. And if someone ever did that...yes, I believe there would be zero showings and zero offers (generated by the MLS listing). An unrepresented buyer could possibly see it on the internet on a site other than MLS (b/c they don't have access to that) and perhaps bring an offer themselves. But the MLS listing itself would certainly not generate showings or offers.

Do you think an agent would run around town showing houses for 0% commission?

Carnwell...I can't sense sarcasm well on the internet...are you being serious or busting my chops?

[This message has been edited by jmazz (edited 4/16/2014 10:28p).]

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Jazz- do you really think there would be zero offers if there wasn't a commission specified for the buyers agent?

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I'm certainly no expert, but I think you could probably verify this by looking at FSBOs (at least in the BCS market). I think there is often an assumption that FSBO sellers won't pay ANY commission (and maybe this is often true). I had VERY few calls from realtors asking to show their clients my FSBO house (one, maybe two), but my mailbox was absolutely filled with fliers, cards, and handwritten notes from nearly every real estate agent in town offering their services as a seller's agent.

Agents were well aware my home was for sale, but none of them brought their clients to my home. As I mentioned in a previous post, the people who wound up buying my house had an agent, but the buyers called me about the house first and got their agent involved after they spoke with me.

[This message has been edited by TXTransplant (edited 4/16/2014 11:18p).]

Having been involved as a non-agent. I think most of the feedback I have heard relates to the the difficulties that will arise when the seller starts out with the attitude that they do not need a sellers or buyers agent.
It just sets a difficult tone.
Just my observations and why I will use an agent when I sell.

A good plan violently executed now is better than a perfect plan executed next week.
-George S Patton

^ Yes, this can be the case at times. But this can also be the case when an agent is involved. I have a listing right now I wouldn't mind donating to someone else...not worth the headache!

My agent didn't show it to a single one of her clients. They were all buyers clients......

^ What point are you trying to make my friend? This is even more reason to utilize a flat fee service. The reason your house got showings is b/c of the MLS listing. Your agent, just as any other listing agent (myself included), listed your house on MLS. The flood gates then opened...which is what happens in a market like today's. If you would have offered 0% commission to a buyer's agent...do you think there would have been showings? I don't. I'm confused as to the point you are trying to make. MLS exposure sold your property. You paid 3% to your listing agent when you could have had the exact same results for a flat fee listing commission.

Let me clear something up...

If a Realtor representing a buyer has signed a buyer's rep agreement with their client and they have stipulated in that agreement that the Realtor will make 3% commission on whatever property they buy...then they will make 3% commission. BUT...if the seller is not offering commission to a buyer's agent, that 3% would then have to be paid by their buyer.

So...I guess a house could be shown if a seller was offering 0% commission but only if the buyer is up for paying their Realtor the commission. Otherwise, like if there was no buyer's rep agreement, I do not think a Realtor would show a house that is offering 0% commission. I don't sign buyer rep agreements so if I saw 0% commission I do not believe I'd waste my time.

Hope that makes sense.

RX, I hear that a lot "My agent didn't show my house to anyone" - not true, she/he showed it to the world in a few minutes via MLS and all the sites it feeds. She/he advertised all your terms, conditions, features, etc... Buyers who previously didn't know about your house flocked to your door.
Which raises the question, Do people really want their agent bringing a buyer also? It's good for the agent, since they get both sides of the commission. It seems like a good deal for the Seller because they maybe save a percentage on the commission if they agreed to this in advance, but now your agent is not allowed to give you advice. When he/she assumes the dual-agent role (now called Intermediary) he/she can only offer honesty and keep the deal on track. He/she is not allowed to disclose what price either party will take, or what he/she thinks you should do in a given situation. The fix for this is for the Broker to "appoint" another agent to rep the buyer. But now you are essentially back in the two agent role - but I guess Your agent brought a Buyer and You possibly are paying less. So this is good for you.
But I wonder how many people think thru this when they say "My agent hasn't brought any buyers" - When I hear this, I translate it to "I made my agent list my house for too much, and/or I have very restrictive showing instructions"

^RX, that reply wasn't all to you. I meant in general when people complain their house isn't selling because the Realtor isn't showing it to anyone.
From what I gather, your house sold fine and I assume your Realtor did a great job. And I think your comment about your Realtor not showing it wasn't a complaint - just an observation with regards to this thread.
Thought I'd clear that up. Carry on

Jmazz - Were you my agent with Caldwell Companies for a property on Carlisle Court?

[This message has been edited by RVRE Co. (edited 4/17/2014 1:48p).]

^ Yes. Caldwell Companies. I'm doing my own thing now.

RX - Typically Listing Agents will not show and sell their own listing. It does happen, but not often. The job of your listing agent is to expose your property to largest audience of Realtors and prospective buyers. Hopefully, when you were given the Information About Brokerage Services form. It was explained that your Realtor would represent you interest alone unless they were asking for you to allow for an intermediary relationship. For the Listing Agent to rep both sides of the transaction it would create a dual agency, which is not allowed in Texas. If you agreed to an intermediary, your agents Broker would proceed through appointments, and your agent would still be unable to rep both sides. The other option would be for your agent to convince the buyer to work with them without representation. The second option is common, but convoluted. The third option occurs when the buyer is knowledgeable and has a very high comfort level with the Listing Agent.

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Do you think an agent would run around town showing houses for 0% commission?

Carnwell...I can't sense sarcasm well on the internet...are you being serious or busting my chops?

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serious. home buyers are constantly on the mls and know the inventory. if they see something they want to view, they will view.

all i am saying is the buying agent would have ZERO commission from the seller, they could ask for whatever they wanted from the buyer OR the buyer could negotiate with the seller for $ to pay their agent.

I just put that together today. Congratulations! Give me a call (210)853-5327. I was looking at your website, and I wanted to talk to you about some information I received at the SRS designation course.

Carnwellag- Your technically not on MLS, the general public has access to IDX populated sites found on Realtors websites, Realtor.com, Trulia, Zillow and such. However, the information available is limited. MLS access is by paid subscription, and also requires membership and a license.

In 20+ years, I have not run across many buyers willing to commit to pay a commission. They typically don't want to pay the asking price of the property, for a survey, an appraisal, or much of anything else. They are in the process of making one of the largest purchases in their lifetime, and are very money conscious. Could be the reason, the system has not changed much over the past 50 years.

Carnwell...

It's been covered by the recent posts but this should also help clear some things up...

The MLS listing does expose the house to other websites which a buyer could find on their own. However, on those websites...the seller's contact info isn't available. So they'd either have to call a Realtor anyway to show them the house or do some digging to attempt to find the sellers contact info elsewhere (unlikely).

So while an MLS listing in general will market the property to the masses...any showing will most likely come through a Realtor. And if that Realtor is being offered 0% commission...good luck.

One other thing...

When a listing agent is involved, commission is negotiated up front, at the time of signing the listing agreement. It is not negotiated after the fact. If a buyer found a property on the internet and called a Realtor to go show them, the Realtor would pull the listing up in MLS, view the showing instructions, view the commission being offered, etc. If that commission said 0%, it's not like they would call the seller to negotiate that. The seller is being represented by a Realtor and they have already negotiated the commission. If it were 0% to a buyer's agent, that means the only way the buyer's agent would get paid is by their buyer.

Now, if a buyer found a FSBO they wanted to see and make an offer on...then they could negotiate with the seller a commission for their agent. In this scenario there is no listing agent/agreement so anything would be open for negotiating.

I disagree. A certain jackwad in my part of town is receiving offers with a stipulated 3% to the buyer's rep. His listings are listing with a 5% total commission, 3 to him and 2 to the buyer's agent. What seller is going to turn down full price on the condition that commissions be paid traditionally? Or better yet make said jackwad take a haircut. Besides he was the one that said it would not effect the marketability of the house.

A good plan violently executed now is better than a perfect plan executed next week.
-George S Patton

^ What is it that you disagree with? I don't recall anywhere on this thread anyone saying a seller would reject an offer on the grounds the commission wasn't paid traditionally. If a listing agent is taking listings at 5% total commission and offering 2% of that to a buyer's agent...that is cut and dry...the buyer's agent gets 2%. The seller in this scenario is a bit foolish for signing that listing agreement (not the 2% to a buyer's agent part but the fact that the listing agent is taking a higher cut.) The listing agent has some guts to even present that to the seller and take a higher cut than the buyer's agent. I guess he has a good pitch or somehow gets the seller to believe he's worth more than the buyer's agent.

Oh...and if that Realtor has stipulated on the listing that the buyer's agent is to receive 2% commission and they're submitting offers with 3% written in...that shouldn't even be presented to the seller. The buyer's agent commission is not negotiable at this point of the transaction. It was already negotiated between the listing agent and seller. Example...if I have a listing and we're offering 2% commission to a buyer's agent and I receive an offer where they've written in 3%...I call them and tell them the buyer's agent is commission is 2% as noted on the listing and is not negotiable.

so Im in Austin how does it work if i sell my house and then use same agent buy my next house. i would think that when thy are seller agent then help buyers agent would they want to take both ends of the stick? my first home we just used the rep in the neighborhood since we bought a home that my wife got corp. rebates working in the corporate for the buolder. new to this but looking to sell and buy in a year or 2 in Austin. like this thread.

Jrod...

As the seller you pay the real estate commission. So depending on who you choose to list your property with, you'll pay that agent and the buyer's agent commission. If you use the same Realtor to represent your interests when you purchase...the seller of the house you purchase will pay your Realtor. In a sense your Realtor will be making money off you when they represent you as the listing agent and when they represent you as your buyer's agent. When you sell the commission comes out of your proceeds. When you buy the commission comes from the seller (typically).

-JMAZZ
We will just have to disagree. In Real Estate everything is negotiable. That is what makes it so much fun.

A good plan violently executed now is better than a perfect plan executed next week.
-George S Patton

^ Yes sir...everything is negotiable...down to the toilet paper holder. And part of what this thread has covered has been commission and who pays it and what amount, etc, etc. I was just answering Jrod's question based off the 'industry standards.' And in today's real estate market the seller pays commission 99% of the time. I've never actually been involved in a transaction where that wasn't the case. I know it can happen...but it's rare.

^ sounds like deats was disagreeing with this statement you made:

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Oh...and if that Realtor has stipulated on the listing that the buyer's agent is to receive 2% commission and they're submitting offers with 3% written in...that shouldn't even be presented to the seller. The buyer's agent commission is not negotiable at this point of the transaction. It was already negotiated between the listing agent and seller. Example...if I have a listing and we're offering 2% commission to a buyer's agent and I receive an offer where they've written in 3%...I call them and tell them the buyer's agent is commission is 2% as noted on the listing and is not negotiable.

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if this were to happen, is the commission negotiable or not? as the listing agent, are you allowed to make the statement that the commission is not negotiable without first taking the offer to the seller?

a listing agent should present all offers to a seller but TREC (or maybe NAR) provisions do not allow for a buyers agent to attempt to adjust the stated commission in their offer.

Ah...thanks PathAG for clearing that up. Yes...all offers should be presented to the seller. If I said otherwise I was wrong. I actually had a 2% to buyer's agent listing just recently and we got an offer with 3% written in. I did present it (we ended up taking it) but told the buyer's Realtor the commission was 2% and non negotiable. The commission should not be negotiable after the listing agreement is signed. That is when it is negotiated. Now, if one side or the other wanted to discount their commission to get a deal done...then that can happen after the fact. But the commission the listing agent is taking and the portion being offered to the buyer's agent is negotiated at time of signing the listing agreement. The buyer's agent portion is displayed on the listing for all Realtors to see. That way they don't just submit offers and write in whatever commission they feel the deserve.

[This message has been edited by jmazz (edited 4/24/2014 7:15p).]

Jrod - be a pioneer. Hire your agent and leave the paying of the buyer's agent to them.

That is my question really- for conversation sake- if your realator is the sellers agent and reccomends the buyer agent to paid a lower commission (not sure if that happens) then when he represents me purchasing a home wouldnt they have to be open to the same idea?

I also recongize there are bad apples in EVERY profession- i am in insurance so i see it all the time.

But would relators really not show a property because thier commission would be less? i couldnt imagine them being successful in the long run.

Jrod...

When you list your house for sale, you and your Realtor (listing agent) will decide what the total commission will be. You will then decide what portion of that total commission you will offer to a Realtor who brings a buyer (buyer's agent). You could decide to do the traditional 6% commission and offer 1/2 of that to a buyer's agent. Or you could do a 5% listing and your listing agent takes 2% and you offer 3% to a buyer's agent. This is all open to negotiation. When you go to buy a house, the seller of that house and their listing agent will have had the same conversation/negotiation about commission. So regardless of what you and your listing agent decide to offer when selling your house, him representing you when you buy is a completely separate deal.

And to answer your question about whether or not Realtors would or would not show houses offering less than the standard 3% commission...anybody's guess. Some will, some won't. Money is money and 2% is better than 0% so I'd be showing the house regardless.