General Question

DarlingRhadamanthus's avatar

How does a realtor get commission if the house you decide to buy is not his/her listing? Or do they get one at all?

Asked by DarlingRhadamanthus (11250points) November 27th, 2009

Hello….I’m still on the hunt for a new place to live. I am going to visit some of my choices in the near future and need some advice. I am not just going to one town….but a few smaller towns within fifty miles of a major city. I am probably going to ask one realtor in each town to show me the properties they have in their respective towns. I’ve done all the research, pulled the specs, everything. What I am doing is asking the realtor with the most listings that I like to show me the houses in each particular town.

However, there are still a few listings in each town that are not by the realtor who will be showing them to me. I guess I am concerned that after they agree to schlepp me around, I won’t buy their own listings (or their agency listing) and opt for something else. Does anyone know how this works? Do realtors get something if they sell someone else’s listing——even if it is for a totally different agency?

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7 Answers

andrew's avatar

There are two realtors—the listing agent (selling the house) and the buying agent (your agent). They split the commission on the house sale.

However, when the listing and buying agent is the same agent, you can oftentime get a little bit of a deal.

Judi's avatar

All the Realtors submit their listings to a “Multiple Listing Service” and a listing agent offers a share of their commission to the buying agent. If you have an agent, they can show you any one’s listing as long as they are a Realtor (not all agents are,) and they are a part of the local Multiple Listing Service.
Ask your agent if they are, and then ask them to show you all the houses you’re interested in, regardless of who has it listed. There is nothing worse for a Realtor than to spend hours showing someone property and then have them write an offer with someone else.

sndfreQ's avatar

It may not be in your best interest to have “your” agent be the selling agent. If the agent is supposed to represent the interest of the party he/she represents it poses a conflict of interest if they are representing the seller (and the seller’s best interests) over the buyer’s (your) interests. That said, Judi’s and Andrew’s advice is correct-the most important thing is to be up front with your agent, and make sure they are up front with you.

Darwin's avatar

What @andrew said. And in Texas, legally the agent has to disclose to you (in writing!) that they also represent the seller because there is such a possibility of conflict of interest.

I have found that when they aren’t the same sometimes you can get a bit of a deal, too, because your agent can also bargain with their agent and actually take less commission in order to make the sale go through. One time when we sold our house the buyer refused to close unless we either vacated the house in 10 days or we paid his storage bill for the extra month. Our agent agreed to pay the storage bill (a whopping $110) out of her commission so the sale could go through.

galileogirl's avatar

Since you didn’t say whether you are buying in the US or the UK there is some differences in the answer. In the US the buyer is usually not responsible for the commission. The buyer can either engage their own realtor or use the seller’s agent. It seems the best idea to engage a buyer’s agent because s/he will be chosen because of knowledge of the local market. Using the seller’s agent might limit the choices you see because s/he has little incentive to take you beyond his clients’ properties.

When I started house hunting earlier this year, I went on line to a referral agency (similar to 1–800-DENTIST or the local bar referral) I entered the specifications I wanted-home size, price, area-and I received about 20 offers to represent me. The offers came through the referral agency so they cannot continue to solicit my business.

I chose an agent who obviously knew the area I wanted. She could have helped arrange for the mortgage, the inspector and deal with all parties. She was completely honest about my budget expectations-that at my price point I would only be looking at foreclosures and short sales-which would take time to complete. In the month before we found the right property, she sent me listings 2–3 times a week and drove me to the 8 houses I wanted to see. When I liked 2 very similar houses in the same development, she pointed out the differences that really mattered. While it is possible to use a different agent in different towns, it is not very practical. If 3 agents have places to show at the same time or if their areas overlap and they bring the same property, things can get messy.

In the UK it seems things are a little more difficult. Generally the estate agent represents the seller. He can offer services to the buyer but you are not his client. The buyer can hire an agent and pay them a finder’s fee in much the same way you do with a rental agent. It is a fixed amount and not a % to be negotiated. I would expect the same difficulties of hiring multiple reps since it is unlikely they are confined to one town or area. The site below has a lot of good information and is about England, not just Scotland.

DarlingRhadamanthus's avatar

Thank you everyone for your response,you’ve been most generous….here are some thoughts….

I am (hopefully) buying in the States. Most of the towns are one to two hours to three hours away from each other totally——which is why I would ask a different agent for each area.. These aren’t suburbs, they are separate small towns. I think I would feel worse having one agent schlepp all over the place and then show properties in towns they are not familiar with. (Please correct me if I am wrong…I’m open to hearing views on I don’t want to be rude to an agent.)

In most of these small towns, there are usually only one or two agents who have the prime properties. (Or so I’ve found.) In this case, should I find another person other than the seller’s agent to represent me?

I don’t think the areas will overlap…and I agree, I don’t want to sign with another agent after an agent has shown us a house. I wouldn’t buy a house with an agent who did not show it to me….basically. So, if an Agent Drucker shows me a house in Hooterville, I will sign with Mr Drucker. If I find a house in Springfield that Mr Simpson shows me, then I will ask Mr Simpson to represent me. I thought that under the circumstances, this would be ethical. These are mostly “mom and pop” agents in theise small towns, not the slick, big-time agents of the large city. For this reason, and in this economy, I want to do the right thing….

It’s been a long time since I have purchased a property in the US. In the UK, you see, you call the agency that lists the property. There is no MLS. If the Broome Agency has a house listed, then you have to go to their office. If the Rutland Agency has another house, you have to call them. It’s cumbersome….you have to engage a different agent for each house that you like (if they are not listed with the same agency.) Agents can only sell the properties that are listed with their own office.

I thank you again….and hope that someone can answer the above questions…as I am still confused.

I just am exhausted….and that’s because I haven’t started the footwork yet…just the research. :)

Judi's avatar

The agent will tell you if they participate in the other areas. If they do, you really would be better to stick with one. It’s OK to ask them. Realtors have one of the strictest ethics standards around. It is the result of a bad rap they got in the 50’s and 60’s and they are trying hard to overcome the stigma.
s a buyer you don’t have to “sign” wih anyone. The only one obligated to stick with an agent is the seller.

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