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The seller’s agent publishes the contracted commission in the MLS listing. The seller pays the full commission. Your agent (the buying agent) will split that commission with the selling agent. You, as the buyer, don’t usually weigh in. Your agent can ask for 3%, but if the total commission agreed by the seller when listing the property was 5%, then they’re only going to get 2.5% (and sometimes less). Why are you as the buyer negotiating a commission? It’s not your cost.
D1 - this is change is due to the NAR lawsuits last year. They buyers agreements have technically been there and buys commissions were listed on the MLS. This is no longer the case, they can’t be listed on the MLS and need to be structured into your offer and compensation amount set up front with the buyer and buyers agent.
I would not pay a buyers agent 3% on a $1.9M purchase. Let’s say they show you 30 houses and each one takes 90minutes (which it won’t), that’s over $1200/hour. A buyers agent is 100% not worth that. Remember also that their incentive is to get you to buy the first acceptable house for the highest price you will pay. On my last purchase, we agreed to 2.5% commission and then I got 23% of that back as a rebate to closing costs. They still made over $1,000/hour because I only looked at about 6 houses. (I looked online at every house in my budget in the area I was interested in and knew when I saw what I wanted).
Thanks guys ! I was able to push it down to 2.5%
Would love to know how you end up structuring your offer to cover the commission and if the seller ends up covering it or if you end up paying all or a portion out of pocket. As I mentioned before, I’d look at the increased potential payment of property taxes over time and loan interest if rolled into the purchase price. Good luck!!
There was a recent daily episode on this, basically nothing has changed. Your only option is to use a buyers agent that will refund some fees to you, like Redfin.
My experience in the Bay Area is that the fee is 5% overall so however that is split up between buyer/sellers agents is fine but not 6%.
In my case, I’m identifying most of the homes myself and relying on the agent for paperwork and negotiation support. I’d like to understand:
🔹 Is 3% still the norm?
🔹 Has anyone successfully negotiated down to 2% or 1.5%?
🔹 What’s the best way to approach this respectfully while protecting the relationship?
Any scripts or experience you can share would be much appreciated.
You should’ve signed a buyers agreement with your agent stipulating how the agent would be paid. Is the picture you posted above of the buyers agreement that agent wants you to sign? It’s stating that if the seller is not willing to pay all of the commission, you will be responsible for it out-of-pocket. So it comes down to how you put the offer in on your house and if the offer includes buyer agent commission or not.
It’s interesting that I hear nobody talking about how the buyers agents are paid in the impact on future property taxes. I also live in the Bay area and if you think the potentially the buyers agent and the sellers agent are both getting 3% of the selling cost, 6% of your sale price is just commissions. And that 6% you as the buyer are paying property tax on as long as you own the property.
If you can afford to pay out-of-pocket for the buyers agent fees, it seems like that is a better way to go assuming you can reduce your overall purchase price.
Additionally, with our property price is so high, you definitely should easy be able to negotiate down to at least 2 to 2 1/2% for the work. but check and see what agreement you’ve already signed. You might even be able to find an agent to just do paperwork for a flat rate if you don’t need any help with inspections or negotiations.
You absolutely cannot put a commission in the MLS anymore that is literally what the lawsuit was about... The buyer's agent should always write up a contract between themselves and the buyer stating that if the seller is not willing to pay the commission that the buyer will. Nobody's working for free.
It CAN be paid by the seller, it is the sellers choice and must be written into the purchase and sale contract. If the seller refuses, you either don't get the house, or you are stuck paying the buyers agent fee. It IS negotiable, though and 3% for a buyers agent is high.