Every so often I get a call from a home seller asking me a variation of this question:
What will the commission be if I find my own buyer?
It could be a seller client or someone considering listing their home with my company. Typically, the discussion that follows reveals that the questioner
- either wants a complete exemption from commission because it is "their" buyer or:
- a steep discount because they think most of the work is now done.
This shows a fundamental lack of understanding of the role their broker plays in the sale of their home.
To backtrack: In 2004, a person could make an offer on a home, get it accepted, and get a mortgage in 30-40 days without much effort or hand holding from their agent. I know this firsthand; I was a loan officer from 2001 until about 2005 when I started my company. It was so easy to get a mortgage back then that it was almost scary- there were no income loans, no documentation loans, and all sort of other programs that required a pulse and little else. If a person liked a home and wanted it, you sent them to the mortgage broker down at the corner, left them alone, and they moved in 60 days later. All that was needed for a house to sell was a person that liked the place.
Since the housing downturn, the pendulum has swung the other way. Banks are so cautious and strict in their underwriting that even seemingly well qualified people have a hard time getting to the closing table. The scrutiny from bank underwriters not only borders on suspicion, sometimes it feels like they are looking for an excuse to avoid lending the money.
In this climate, finding the buyer is just the beginning of the work. Not only are the banks more cautious, buyers also proceed with far more trepidation and hesitation than they ever did in years past. Even when people simply love a house, I have seen deals implode over draconian underwriting or buyers who have gotten spooked over a seemingly easy to fix problem on the seller's side, such as an open permit or high radon reading.
Today, an accepted offer is anti climactic. Once a buyer makes an offer, we have to navigate an obstacle course of home inspections, attorney haggling over contract verbiage (which can drag on for weeks here is lawyer happy New York), appraisal issues, title concerns, commitment conditions, challenges to get a clear to close and a ton of other possible "gotchas" that we often doubt a closing will happen until all parties show up.
No sane person dislikes saving money. I sure don't. But if a seller has a cousin or a neighbor they run into at the store who expresses an interest in their home, they should immediately refer them to their agent and ensure that the deal has the best chance of closing. You never as a seller want to compete with your own agent. It is tempting for some to think that they can "save" by bargaining their agent to a lower (or no) commission by procuring their own buyer. But the skill set that it takes to carry that buyer over the finish line is far more than most regular folks possess.
There are rare cases when a seller might have a solid buyer lined up where an exclusion could be negotiated for a reduced commission IF the buyer is a quick knockout punch. But the sort of prospect who can truly close quickly with no time on market or the associated expenses is rare. Often the the seller is seduced by mere interest, as if it were 2004 again and all they need do is send their prospect down the street. In this day and age, that doesn't occur much. In a transaction the magnitude of selling a home, the best thing to do is have your professional do the job, and rest assured that you are getting what you paid for.
If you want a do it yourself project, build a go-cart. For real estate, use your broker no matter where the buyer might come from.