This was a vexation when we were looking earlier this year, as we live in a hot market, and it wasn't a sure thing that we'd find something before late July, and I'd need to prepare for both scenarios.To get started given we are still very early:
Active buyers using an agent: What terms are in the contract you are being asked to sign with the agent before a house is shown? Have you had luck negotiating them?
Active buyers without an agent approaching a seller's agent: Are you being asked to sign a dual agency agreement?
Sellers using an agent: Is the agent advising you to list the house at a price that assumes a commission or not?
My approach back then was to inquire whether the agents would be amenable to reduced fees, were I still looking in late July. One told me no, and that I would be expected to pay 3% regardless. I thanked her for her time and looked elsewhere.
Another (a well-known flat fee broker in the area) was amenable to negotiating something lower (perhaps on an hourly basis) and was also amenable to allow either party to unilaterally cancel the engagement at any time. This was one of the main reason I went with this broker (that and his experience selling/ seeing a lot more properties and having landlord experience, which helped when it came to spotting potential issues).
In the end, we went under contract in early May, so the issue was moot, but I gave it quite a bit of thought. There have always been local brokers who agree to be compensated at 2% (and rebating the rest). That to me is the upper bound of compensation going forward. I think if we were still in the market now, we'd draft up a contract where we will pay no more than 1.25% in the worst case, and to have any compensation in excess of 2% rebated. We'll go with a broker who agrees to those terms. An alternative would be hourly rate up to 1.5%.
One thing that became clear is that agents who work for a broker were the most unwilling to reduced compensation, as they'd need to kick a good portion up to the broker.
Statistics: Posted by InvisibleAerobar — Fri Aug 16, 2024 3:42 pm