OfflineHello,
I don't fully understand the logic behind the concept of the simultaneous buyer's and seller's agent.
My logic is this: Say that a seller's agent is representing a client at say 6% remuneration. You, the buyer, find the property without a buyer's agent and the property meets your expectations and you make purchase. All respective parties receive what was expected; the seller-currency for selling, the buyer-the property itself, the agent-6% commission.
My question is this: How would this scenario play differently had the seller's agent been your buyer's agent as well?
My reasoning in asking the question is because I'm under the impression that the seller's agent would still receive 6% commission either way, am I wrong, is there a cap on how much an agent can receive or can the agent potentially earn more, in this case 12%???
Thank you,
Mad.money
If the listing agent(sellers) does not have to share the commission, by law he is the duel agent, meaning he shares the commission only with his broker
An example of this is you see the ad online and call without assistance from another agent(buyers)
Elixbrown: Let me ask you this, what is the beneficial use of saying to the "listing agent" that he/she can be the "dual agent" if either way the experience is the same for said agent if you had no buyer's agent in the first place?
I received this idea from "Be a real estate millionaire" as I'm sure you are aware, but was just confused on the semantics.
Thank you,
mad.money
because they are selling someone else house(seller) to you (the buyer)
He/she has to let both parties know the situation beforehand
"Mr Jones, I found a buyer for the property. His name is Mr Reynolds, and I will be the agent for both of you.."
"Mr Reynolds, I have the exact house you are looking for. I represent the owner his name is Mr Jones..."
you get the picture right???
In "Be a real estate millionaire" Dean uses this tactic to convince the agent to entice the seller in accepting a lower offer, that's really where my confusion lies because either way from the above example the agent still receives 6% remuneration of the total cost. If you're purchasing the property either way(without buyer's agent), there really isn't an incentive for the agent to work on your behalf.
in terms of commission % or total price accepted???
The commission is negotiated between owner and listing agent beforehand so while it is generally 6% the standard, it can even be 4% to 5%
I did some research online, and I've come to the realization that 6% is relatively the most an agent can make. I do not know if that is true or not, just an observation from research, I haven't come across an article in which an agent representing both parties received more than 6%, I don't know if that's a cap or a law or something of that nature, but it shows my naivette in the subject matter.
If that's true and an agent can only receive 6% maximum from all parties in total, it's assumed that that fact diminishes any incentive to strive for the lowest price possible of the "total price" as you put it.
Thank you,
mad.money
If that's true and an agent can only receive 6% maximum from all parties in total, it's assumed that that fact diminishes any incentive to strive for the lowest price possible of the "total price" as you put it.
Thank you,
mad.money
overall there is no incentive to strive for the lowest price and why should a realtor want to accept less???
If I represent both parties I will ask the seller what they will accept normally, which would be assumed in financing, and what they will accept cash. Big difference.
With cash the incentive would be the shorter time it takes to close and everyone gets paid. With financing, there isn't much of an incentive but by law I am required to present the offer(s) and if the offer is strong, I would recommend they accept
When doing a duel, i've tried to make sure both walked away happy. Some times it worked, some it didn't but the effort I put forth was remembered
In my research I've found that seller's agents work towards accepting the largest offer possible and buyer's agents work towards the opposite. So I assume that a "dual" agent would want to work towards some type of middle ground yet still try to gain the most for their work. I was merely referencing the commision rate one receives for being a "dual" agent and the rate one receives for being the only agent. The rate is one in the same.
Thanks for the assistance, I'll try this tactic and see what will happen of it.
Thank you,
mad.money