Negotiate with Buyer’s Agent

Working with a buyer broker does not come cheap. Buyer brokers make a lot of money by sharing or "splitting" the selling broker's commission (sometimes covertly). You have the legal right to bargain for that commission, and it is well worth it.

In most regions of the nation, the selling broker "splits" their commission and provides half of it to the buyer's broker. Here's an example of how you may save thousands of dollars by negotiating the buyer broker share of the commission.

Assume for the sake of this example that the standard commission provided to buyer brokers is 3% of the purchase price.

Assume you're looking for a property in the $300,000 range.

That equates to a $9,000 fee for your agent simply taking you around and negotiating the terms and pricing.

Although many agents must share a portion of their fee with their brokers, we advocate employing either a 100 percent fee agent or a broker who works for himself to avoid this problem.

Here's one strategy for negotiating the commission. Instead of allowing your agent to earn the entire commission split being offered, you offer your agent a flat charge of $4,000 (adjust this amount to the price range of the property you are purchasing), with any additional to be handed to you or applied towards the purchase price of the house (depending upon lender requirements). In this case, you'll save a stunning $5,000 in commissions. Assume your agent located you a house where the listing broker was providing a $5,000 incentive... That is also yours. Your realtor would have gotten $14,000 for assisting you in finding a home if you had not made the effort. That, we feel, is exorbitant and an unproductive use of your money.If your agent helped you for 40 hours (the average amount of time a buyer agent spends with a buyer), that $4,000 comes out to $100 per hour. If the agent had received a bonus, he or she would have earned $350 per hour in the preceding case. That is a substantial sum given that the specialized education necessary to get and maintain a real estate license is modest in comparison to other other professions. Flat fees are only one way to bargain with your buyer broker.

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