Hey I read in “Building Wealth” by Russ Whitney that in the US at least at the time of writing, if you held a real estate licence and bought a property, you were entitled to half the commission (ie. 50/50 split between the seller’s agent and the buyer’s agent (you). So you were both the buyer and your own agent.
Is this the same case here in Australia? If so you could obtain free money by getting 100% fianancing from the bank, because you’d get your commission after fianancing.
Any wisdom shared on this would be helpful. Cheers.
Nothing is impossible, just implausible
That’s interesting, but I’m pretty sure it’s not the case in Australia.
My dad’s a RE agent & I’ve never heard anything about it…
Sure. You could (try to) negotiate that with the selling agent. why not.
Buyers agents do that sometimes. ie they get half of the listing agents commission, and reduce their fee to the buyer accordingly.
Terryw
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North Sydney
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Given a choice between selling to a buyer whereby the agent gets full commission OR selling to a buyer who had negotiated a conjunction deal with that agent AND given identical offers to buy which buyer do you think the selling agent will steer the vendor to ?
Pisces
I understand that in the US, real estate agents act for both the vendor and buyer. They basically work for who ever comes into their office. If a seller comes in they try to sell for the best price.
If a buyer comes in and says I want a 3 bed home, near schools, etc etc, they find the home and I understand its normal practice in the US to share the commission between the buying and selling agent.
Here in Australia Real Estate Agents basically ignore a buyer and only offer them what stock they have. In the US a real estate agent will endeavour to find what a buyer really wants.
I reckon our system stinks. How many times have you as a buyer been shown a property that has nothing to do with what you wanted.
If Agents in Australia made money out of buyers too (eg. share comm on a purchase) then we would all be looked after.
Agents acting for buyers do the leg work for you and only source properties you want. They are prepared to do it as they earn a half commission on your purchase as the commission is shared with the vendor agent. I suppose agents really will only act on your hehalf if you are really committed to buying a place.
Thats another reason agents in the US dont have the glossy shop fronts that we have here.
One other thing about RE in the states. Commissions there are huge – 6%+. Different ballgame entirely.
That must be why they can share commissions between buying and selling agents.
Well, I think the states of Australia are different again. Nothing unusal for agents in WA to share a commission if one has the house for sale and the other brings through the buyer. I prefer to look at the house with an agent who is not the seller as then they are more impartial, especially if they know you’re going to buy something that they will get part of the commission for, just by showing you through a stack of houses!
Picies has a good point though, not one I’d considered before. Perhaps it comes down to the type of market we’re in as to whether there is likely to be more than one offer, whether you’re chasing an agent to be impartial, whether there’s more available if you lose that one etc. Food for thought!
PK
Fortune Favours the Bold.
Yeah that’s what he suggested in the book – you would probably not be able to get as many houses if u were after a share of the comission. But you’d get more money for each house, so it’s a sort of a trade-off.
It’s all just food for thought though.
“I’ve made every mistake in business, but i’ve only made them once”
– Dick Smithplease note that an agent cannot split commission on a purchase for themselves – is a conflict of interest as they are theoretically acting in the sellers interest yet they are the buyer. if you want to trade property to make a dollar it is probably best that you are not an agent as you are not bound by the quite onerous disclosure, ethical and other legal requirements.
Extensive list of new Perth property available for sale.Alternatively, become a joint venture partner in one of our property development partnerships – contact me to find out why our developments are unique. John – 0419 198 856
A few insights:
1) If an Agent just dismissed a buyer because they didn’t have the ideal property, they could be throwing away oppurtunities, what if that seller came through the door the next day.
2) USA agents get a high commission because they offer a heap other extra services, aus agents don’t offer these.
3) Yes there is a beneficial interest clause in real estate transactions (at least in QLD anyway).Monstango, can you tell us a bit more about your points 2 and 3 ?
Thanks,
Pisces
Yea:
Point 2) i can’t remember right now, it’s at a book at my house… can’t remember which one.. i will find out.3) The following is an extract: “The property Agents and Motor Dealers Act (section 13) requires an agent who wishes to purchase a property on their own behalf to make a Statutory Disclosure to the client (vendor/seller). ……
This Disclosure must be given to the client to sign before a contract is entered into. Beneficial interest also applies to people closely associated with the agent, including employees of the real estate business, immediate relatives, business associates, and shareholders if the beneficially interested buyer is a company.NO COMMISSION IS PAYABLE IN A BENEFICIALLY INTERESTED TRANSACTION.
This is because the agent cannot act in the traditional agency relationship of a three way sale, and all fiduciary obligations are severed.
Beneficial interest does NOT apply if an agent is purchasing through another agent (ie a seperate real estate business)………………”
Hope this helps
Yack, you said : “I reckon our system stinks. How many times have you as a buyer been shown a property that has nothing to do with what you wanted.”
Often the buyers don’t have the foggiest idea what they are after until they have seen some properties.
On the other hand don’t put it beyond the agent to show you some bad places before showing you the property which they think could interest you.
Jusrt a technique to make the better property stand out.
I do think it a little bit unfair though on the owner of the bad house.
I guess it helps the agent in softening up the vendor.
Pisces
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