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obligated to use buy side broker?

Started by tpushbklyn
over 15 years ago
Posts: 137
Member since: Mar 2009
Discussion about
This is very similar to the post in another discussion. I've engaged the services of a buyer's broker, met her twice, and am sent various email listings most weekends of places on the market. Meanwhile a place in my own building came up for sale, and I looked at it without her. It is my impression that I can get a better price if I don't use a buy side agent. I found this place on my own and it isn't handled by my agent's firm. Am I under any obligation, even an ethical one, to tell her about it and/or use her services on my behalf? And if not, what is the best way to let her know if I move forward?
Response by omega
over 15 years ago
Posts: 61
Member since: Sep 2010

No, she did not show you the apartment so you have no obligation to her. Once your offer is accepted, just tell her you found a place on your own and thank her for her services.

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Response by helphome
over 15 years ago
Posts: 110
Member since: Feb 2011

u r never obligated to a buyers side broker.... but r u a skilled negotiator??? most times unless a unit is sold by the owner then u will not get a better price for not using a buyers broker. the seller (again if they r using a broker to sell the unit) is still obligated to pay that broker 6%. the sellers agent is always going to try to ger the highest price for the seller. would u want that person negotiating for ur side as well. it just doesnt make sense. i went through this same situation where i found my own condo as well. I knew that i was intelligent enough to negotiate for my desired price but then i realized that the commission being paid to the sellers agent was still going to be 6% regardless if i didnt use a buyers broker. for me how it worked out was that i told the buyers broker that i would allow her to negotiate the sale but that she would get 1% & I would get 1%. since its paid by the seller i knew if i didnt use her i was losing out anyway. she was more than happy to split commission w me obviously. whats better than making 7k for a small amount of effort. i put that 7k towards closing costs. alls well that ends well.

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Response by ab_11218
over 15 years ago
Posts: 2017
Member since: May 2009

help, you are missing a point that there are many agencies that do a different commission calculation of a split vs no split. for a split it can be 6%, but with no split it's 4%.

in this case, by using a buyer's broker, the BUYER will definitely pay that 2% additionally. by not using one, there's a much greater chance of the buyer getting that 2% discount. on a $1M place, it's $20K. i'll take that to the bank.

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Response by tpushbklyn
over 15 years ago
Posts: 137
Member since: Mar 2009

helphome - yes, I've considered your points. In this particular case I'm completely familiar with the building, the comparables, etc. So it would seem potentially advantageous when negotiating price to inform the sell agent that I'm representing myself .. would this not make the agent more likely to encourage the sale at my price if they are going to get the full commission?

Also, while ethically a buy agent is obliged to get you the best price, does it not reflect their own percentage-based interest to see the sale go through at a higher price? All things being equal, there's something to be said for either approach.

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Response by KeithB
over 15 years ago
Posts: 976
Member since: Aug 2009

Or you have another option that takes all the mystery out of it. You get your 2% and and an experienced broker on your team. If you think a broker can't offer anything to the deal? You still get your 2%.

Keith Burkhardt (broker)
http://theburkhardtgroup.com/services-and-fees-c14358.html

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Response by helphome
over 15 years ago
Posts: 110
Member since: Feb 2011

first of all the sellers agent probably wont get the full 6%. maybe he'll get like 4-5%. also, one quick thing then im done here but a broker only loses 150$ for every 10k the sale goes down. believe me ...making u happy & getting your referral is worth a bunch more than a few hundred dollars...

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Response by jordyn
over 15 years ago
Posts: 820
Member since: Dec 2007

tpushbklyn - A section in Freakonomics dealt with this question of what the incentives of real estate agents are. Basically, the incentive is to get a deal done as quickly as possible. :-)

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Response by tpushbklyn
over 15 years ago
Posts: 137
Member since: Mar 2009

My other relevant question is whether I would want to enlist the same buy agent I've been using if I do use one. Is it unethical to choose somebody else. And all things being equal, on a sale under a million dollars, how much different would one buy agent be from another if you already have a solid idea of what you want to offer.

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