Expert: Jessica Bryan - 8/10/2007

Question
I'm thinking of buying a home that I found listed at an online Realty website.I've contacted the agent and informed him that I haven't an agent and he stated that would be OK for me to be unrepresented and that he could act as both the selling agent and buyers agent.. I've viewed the home with the owner and the agent present and I'm very interested in making an offer in the very near future..
I am thinking of just using the realtor as I like him and I believe the home to be valued correctly based on the research I've done. What I was wondering is: In instances where buyers don't have an agent,would the selling realtor give a percentage point or two off of his commission as I'm not bringing another realtor into the deal?  He is earning the 6%. I was hoping to try to negotiate between 1 and 2% of his commission back to me and leave him at least 4%. I'm wondering if this ever happens and also wondering how to go about making this request.This "holdback" to me would help cover expenses and I'm hoping to receive at least 1%.If he doesn't go for it, I may just have another realtor get involved.. Thanks for your help!

Answer
Dear Dave;
It is illegal for an agent to pay a commission to a non-licensed person. So, you will not be getting any money returned to you from the Seller's agent. However, when negotiating the offer to purchase, you might want to make your offer at 1 - 2 percent lower and discuss with the agent the fact that since they are making a higher commission perhaps they will lower their commission with the seller to make up the difference.  Remember, any change in the agreement is totally up to the agent who has the contract with the Seller to get paid the full percentage.  Any adjustments of the percentage must be initiated by the Seller's agent.  Often, I am open to adjusting my commission when I get a lower offer than the seller wants to take (particularly when I am getting a higher commission than I would be making if it were shared with a Buyer's agent.)

As for how to initiate the conversation with the agent... try something like this:  "I am considering an offer but need some money to cover expenses.  If I ask the Seller to pay for closing costs and make a slightly lower offer, I am afraid they will not take it.  However, since you are making more on the sale of this home, perhaps you would be willing to cut your commission (a little--like 1.5 percent).  If we all compromise a little then we will all get what we want.  I will buy the home, the Seller will sell the home, and you will get paid a commission that is higher than if I had a Buyer's agent."

The agent may not be too happy about cutting the commission but might do it more readily if they feel that by saying "no" you will walk away from the deal. The risk of having to share commission with a Buyer's agent might be an incentive to make the compromise.

Good luck and best wishes.

~Jessica Bryan