Originally posted by: JulesMaximus
Originally posted by: tagej
Originally posted by: JulesMaximus
Why should an agent give you back part of their paycheck? That's how they earn their living.
Often if you are an experienced buyer that doesn't need a lot of handholding and won't take up much time for the agent, they will recognize that and figure they'll get a very nice paycheck for not much work. They know that if they say "no", you can simply try another agent and find one that will agree to a deal.
Well, IMO agents who do that are either poor agents or desperate.
I don't think that's true. After all, lets say you're an agent and you have an option of representing one of two buyers: the first is going to buy a $150,000 home, and you make full 3%, so you stand to make $4500. The buyer is not experienced and you'll have to invest lots of time. Buyer #2 is getting a $300,000 place, and will not require much of your time. You could reduce your rate to 2%, still make 33% more from the sale, and spend a lot less time. It makes sense for the agent to do it, not just for a 'bad' agent, but for any agent.
She won't undercut her pay though, if someone wants a good realtor they should expect to pay them for their services.
So, if I buy a $600,000 house instead of a $300,000 house, does the agent have to do $18,000 worth of work instead of $9,000? Of course not, so there is room for the agent to say "hey, tagej, I'll cut you a deal and work for 2% on this transaction". In a competitive marketplace, she won't have a choice. There are plenty of good agents that will, so if she wants to remain in business she'll have no choice as this practice is getting more common.
You don't expect your auto mechanic to cut his fees down on the repairs he does to your car do you? How about your credit card companies? Do they cut the interest rate on your credit cards because they don't have to do much work to loan you the money?
Those are different situations, those people are paid based specifically on the amount of work they have to do. If my mechanic was getting paid based on a percentage of the value of my car, you'd better believe I would negotiate the price of his services as well. He's not, he's getting paid based on how many hours he has to spend working on the car. RE agents do not get paid by the hour for a good reason, they know they would make a lot less that way on larger transactions.
Bottom line, the agents certainly won't do it for everyone and in every situation, but it makes sense that in a good situation they will be willing to work with you on the fees. If not, dump them and get another agent.
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