I was over at a real estate forum yesterday, browsing around like I do a couple of times a week to see what kinds of questions people have and to see if there is anything worth commenting on.
Yesterday, a lady posted a question that is summed up like this:
"I'm looking to buy a house. I've bought two others before so I know what I'm doing and don't need any help, so I'm looking for a Realtor to rebate me back most of the commission. I have already sold my house out of state so there is no negotiating multiple deals for the rebate."
What do you think the responses were?
There were a handful of common-folk, meaning non-licensed people, chiming in saying that what she was asking for was fair since she had the buying experience. Huh? Has she bought a house in her new market and especially in a market like we're in today?
There were a handful of common-folk giving examples of the deals they received, however, every single one of them had a house to sell in addition to the one they were buying, so their Realtors received compensation off two deals, not just one. And I believe all of their Realtors received the full buying commission, they just did a reduced commission on the listing side of their previous house.
Then, you have all the responses from the Realtors. I've got to tell you, many Realtors don't agree on anything. Many rather argue a point to death just to prove they're right and another is wrong. What did they say in this case?
Every Realtor responded with statements that this lady was not going to get what she was asking for. They responded saying that she didn't have any negotiating power on the purchase side because she didn't have a house to sell in order for the agent to make up some of the time and energy spent holding this buyer's hand.
The bottom-line response was that NO, a good Realtor was not going to rebate their hard-earned money back to a buyer just because they had bought a house before, several years ago, and mainly because the buyer was new to this market and would need a lot of guidance on what areas to look at, what are taxes like, what are schools like, and the normal first time home buyer questions since this market is very different than the market they were coming from.
How could this lady get what she is asking for? One suggestion would be to find someone else she knows who is buying and/or selling and give them as a referral to the same Realtor. Then that Realtor would be working in volume and it might be well worth giving a little rebate. Another suggestion would be for her to ask the Realtor who sold her last home to give her a referral of an agent in the new market she's moving to. That way, the Realtor would already expect to pay out a referral fee, but instead of paying a referral fee to the other Realtor, the Realtor in the new city could rebate that amount to the buyer.
Any other suggestions on when a Realtor should rebate back commission? My suggestion is for Realtors to stand their ground and explain why they earn what they earn. In this specific scenario, this buyer was brand new to this city. She doesn't know the areas, and she doesn't know this particular market. The Realtor is going to be holding her hand through way too much of this buying process, I don't see how a Realtor could fathom giving back most of the commission to someone she doesn't even know. She's not a past client, she's not buying multiple properties, she's not a friend or family member...
Now, if this lady were to find a house and called a Realtor and explained her situation and said I want to put an offer on this house, I know I want it, and I want a rebate since I did the leg work, and you just need to negotiate, that might be a different story... but with the facts that were given, would you give back a large chunk to this lady? My short answer is NO, what's yours?