I hear this question a lot. The buyer is thinking, “If I don’t have an agent I can negotiate a better deal because the seller doesn’t have to pay my agent.”
Here is how the commission structure between the seller and the agent is set up. The seller and the listing agent agree on a commission. The listing agent agrees to pay me a commission for closing the sale as your agent. If you want to work without an agent then there are two issues.
- 1. You have no representation as you are dealing with the other guy’s agent and you could lose more than any possible commission.
- 2. The other issue is twofold. If the seller is paying a less of a commission, wouldn’t they want to keep it for themselves? If they are not going to save money then they really don’t care. The same holds true for the listing agent. If the listing agent is going to make the same amount of money whether you have an agent or not, because of the increase liability of limited representation the listing agent would prefer that you hired an agent?
So now let’s suppose you found an agent that was willing to cut a deal of, say, one percent. The fact that the buyer’s agent cannot negotiate his own commission is the very reason you should want me negotiating for you. I can save you more than that.
If the listing agent is willing to give up 1% and doesn’t represent you, I can negotiate more than 1% against from that agent.
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