More on buyer’s representation agreements

I posted Saturday on Buyer’s rep agreements which prompted a reader’s question about who pays the commission under such an agreement. In almost all cases, it’s still the seller. Houses on the MLS provide for buyer’s reps to receive a 2.5% commission, paid for by the seller. (and by the way, if we don’t have a signed buyer’s agreement, the selling broker keeps the full 5% and we get nothing).

But as a buyer’s rep, I also dig around to find distressed properties and, in some cases, the foreclosing bank won’t pay a commission if a low enough price is reached. I still want to paid, of course, so in those cases, my agreement with the buyer calls for him to pay a commission (2 1/2 or 3%). It’s entirely up to the  buyer – he doesn’t have to buy the house if he doesn’t want to add some cash for my time. But in three cases I’m working on, the houses started at above $9, and we’re working on $3 million, above $5, and we’re working on $2 and, another house at $5 that we’re  trying to get for $1 million. Seems to me that, if I can save someone that much money, I’ve brought value to the deal and deserve to be compensated, just like the investment bankers who are my clients.

But buyers are funny. Anyway, I make no apologies for my fees – if a buyer perceives no value, he or she is free to go somewhere else.

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2 responses to “More on buyer’s representation agreements

  1. Accolay

    One of your clients is getting a $5 million house at $1 mil? Why can’t I find a foreclosure that is worth my time?