AboutToni Yates Expertise As a real estate broker and agent for over 12 years, I am qualified to answer questions about buyer and seller agency, home ownership, second home ownership, lake property and basic real estate information and laws as they apply in the Commonwealth of Virginia.
Experience 12 years in real estate and a second home owner. Top producer for many years. Have specialised in resort and second home as well as primary home ownership. Also have expertise in equestrian properties. Owner and one of the founders of Re/Max Lake & Country as well as Greenway Horse Farm.
Organizations National Association of Realtors, Virginia Association of Realtors, Fredericksburd Area Association of Realtors, Richmond Area Real Estate Association and Charlottesville Association of Realtors. Re/Max and the Better Business Bureau.
Education/Credentials Real estate licensing and broker licensing courses as well as required and optional continuing education in my field.
Awards and Honors Top producer awards from FAAR and Re/Max.
Question Hi. My fiancée and I are planning to buy a home very soon. We have not signed any agreement with a buyer's agent. We've looked at a lot of houses, maybe 50, mostly open houses but also by calling listing agents and scheduling a showing. We've had no problem finding several homes we are very interested in. My goal is to have one less party (buyer's agent) be compensated and earn some of that savings, that's why I've done all the work myself (plus I didn't want to tie myself up to all the restrictions involved, like giving notice when you see a property etc).
What's an appropriate way of asking a listing agent to modify the agreement with the seller to accommodate for a reduced fee in the case where a buyer has no representation. Do you have experience with this, is this very tricky?
Basically I'd like to add something like : notwithstanding any provision in this agreement, if a buyer offers a contract to purchase on the day of :insert date, and such buyer provides an affidavit stating he has no legally binding representation agreement with any broker, then Seller Broker agrees to a reduced fee of 4% (or 3.5%?) and will offer no compensation to any other broker or buyer representative.
Answer Hi Leo-
Thanks for the question. While I appreciate your ultimate goal, I believe you take a real chance of causing issues for yourself and ultimately not gaining much. Here's my reasoning (and obviously I am looking at this as a real estate broker): In this market, a listing agent needs to spend a lot of time and money effectively marketing a property to result in a contract. That equates into $$$. My agents are reluctant to discount their fees because they are making more effort and realizing less. As trained professionals (and in my case, years of experience), we offer a service to our clients. Listing agents represent the seller. Unless they can agree to dual-agency (which in my opinion is fraught with potential problems), they will still represent the seller, not you. This gives the seller a definite advantage. The seller has already calculated the cost of commissions into the equation, including the portion going to the buyers' agent. You have only you working for you.
A good buyers' agent can not only help protect your interests legally and in negotiations but can probably get you a better deal than you would get by trying to reduce commissions. We also have more resources available to determine available properties, net to sellers, property records, property and location issues, etc. which can ultimately net you that "real deal" AND- the seller generally pays for it! The listing agent has already negotiated their contract with the seller, including the buyers' agents' compensation. What you are suggesting is that they ask the seller to modify or break their contract to give you a portion. The agents' motivation? A potential 1/2- 1% for doing twice the work and having considerably more risk? Agents get paid a percentage of the sales price as a rule. It is unlikely you would gain much with the sales price if you are already negotiating the commission (particularly in the sellers' mind)? The listing agent's job is to get top price for the seller.
By law, a broker cannot give commission to anyone other than a another broker so I believe they would have to modify the listing agreement as that is a separate contract rather then presenting your terms in an offer to purchase which is essentially a contract between buyers and sellers. In affect, the seller would be breaking their contract with their agent and might have to pay anyway. In VA, the standard Offer to Purchase irrevocably guarantees that the agent will be paid the commissions agreed to by the seller in the listing contract.
I can't help but believe you are targeting the wrong party for your ultimate goal? My listing agreements specify no compensation for buyers not represented by an agent. My clients also are confident in my abilities to represent them whether buyers or sellers and as a rule feel that the services I provide are valuable.
Then there's the issue of "procuring cause." How did you find out about the property to begin with? Just a thought. Bottom line- you probably need to check with an attorney and they charge for their services as well. Good luck in finding your home and I hope you will reconsider using a buyers' agent to assist you. Best, Toni
