If I am buying and selling in the same city, is it recommended to use the same agent to help me buy a home, and sell my current home? If so, how does that commission work? Thanks.
For sure use the same agent. They will be highly motivated to sell your home and find you a new one. They get paid on both transactions.
You only pay commission as a seller.
So if you are in the same area, then I would say yes…but then I would negotiate a lower commission on the sale of your home. After all, a realtor would rather have 5% of 2 transactions than 3% of 1 transaction. Some cities are bigger than others and your realtor might not be familiar with certain parts of larger cities…so in that rare case I would use different realtors.
Thank you for your helpful replies, ole1845 and butler!
It depends… You need a good listing agent to help you sell your house, one who has a good track record and experience in the specific market area your home is located in. You need a good Buyer’s agent who’s familiar with the market that you’re interested in buying your next home. That may not be the same person or brokerage
Most people start looking for a new home before they decide to sell the old place. If that is the case they may be dealing with a Buyer’s agent with little to no experience in listing and selling homes.
I’d recommend finding a good listing agent first. That person should be a seasoned and experienced Realtor with a hundred transactions or so under their belt.
I was a RE broker for 12 years and averaged 40 to 60 closings a year.
Thank you for your helpful reply!
For buying, go ahead and find a the best buyers agent specializing in the area you like. The seller will be paying for him through the commission he’s charged.
For selling, consider using a discount listing agent, especially if your area is still a sellers market (my area is). Find a firm that will list it on the MLS for $500 or $1000. Or if you don’t have much RE understanding, you can still find discount agents that will offer full service at 4-5% commission instead of the customary 6%. Real estate agents make WAY too much money for the service they provide, given the high price of RE these days. Most listing agents spend much more effort marketing their services than marketing your house. In a buyers market (as in '09-'12) good agents can help locate a buyer. Not so much now, because the MLS does all the work. I should know. I used to work in the industry.
Super helpful, thank you!
The buyer pays all fees and commissions as the buyer is the one that brings money to the table
See if the house is for sale at 500K with 30K is commission the buyer pays 500K and he paid the commission. If the commission was only 20K then the price would drop to 490K
Depends on how you look at it. The commission comes out of the sellers sale price. If the sale price is $500K with a 6% commission the seller will get a check at closing for $470K. Yes, the buyer had to pay $500K but there’s no additional cost to the buyer for using a broker. There is an additional cost to the seller for using a broker.
no buyer pays it and that’s the right way to look at it.
Seller wants 470K
if no real estate agent , buyer pays 470K
add agent seller still gets 470K Buyer pays agent fees and pays higher price.
The problem is the monopoly of the whole real estate gang. If a house sells for 250K, 500K and 1M is there more work involved for the agent to get double commission just because price goes up?
You are making a huge assumption that the seller will price the hypothetical house at $470K. In reality if the seller choses to not use an agent they will still price the house at $500K in hopes of keeping the $30K commission they would pay if they had used a broker.
If the buyer has an agent the agent gets paid nothing if their buyer choses to purchase a house that is a for sale by owner. Buyers agents will steer buyers away from homes that are for sale by owner. Some buyers agents will have a contract that requires the buyer to pay them if they purchase a for sale by owner but that is pretty unusual.
Some for sale by owners will offer a commission to a buyers agent to bring them buyers. So it’s really the seller who pays the commission almost all the time.
The right way to look at this is that the Buyer pays an inflated price so that the Seller can pay the commissions. This is not any different than businesses passing along their taxes and fees to their customers in the form of higher prices. The consumer is always the one that ends up paying. The whole “Seller pays the commission” is just a NAR talking point.
@weenut1 is correct.
No matter how you try to say it, in the end the only one with money at the table is the buyer who pays everything
When I bought and sold in the same city, our (only) agent discounted his commission on our listing by 50% (so 4.5% total commission instead of 6%–buyer’s agent still got 3%). He got the regular 3% on the house we bought. It was a great deal for him because the house we bought was more expensive.
RE agents and brokers come in all flavors and range from valuable, competent assets to costly and useless tagalongs for both Buyers and Sellers.
A good listing agent should be able to prove their worth with a professional and effective marketing plan backed up with a proven track record and performance references. And a really good professional won’t tie you up with a non-cancelable contract, if you’re not satisfied you should be able to cancel at any time.
Sellers also come in all flavors, from the seasoned veteran who’s sold multiple FSBO’s to the first-time neophyte.
There’s lots of variables and no one-size-fits-all answer.
thank you weenut1
Same broker firm, YES. But don’t use same agent for both buying and selling. It’s like playing poker and your opponent know what is in your hand.
Say that you, as a seller, have an absolute minimum that you will take for your house. This fact cannot be disclosed to the buyer’s agent. But the agent will have this info and can reveal it to the buyer, since he also is the agent for the both sides.