We worked with an agent to buy a lot that we're building on. She's good and has helped us over the past 2 years pull comps as the market went crazy. Our current home is in a desirable location in SW Austin, so houses that are priced right move quickly without too much effort (i.e. open houses are very rare except when they were trying to create bidding wars 2 yrs ago).

We verbally told her we would list with her, and we may bring a buyer (neighbor and friend of different neighbor are interested) to the table. She has said she'll give us a discount if we bring a buyer. This was 5-6 months ago.

So, in the meantime her national brokerage firm was one in the recent collusion settlement. We're supposed to meet and discuss a listing agreement and I'd like to approach it more as a base commission plus fees for helping an unrepresented buyer, or a reduced buyer's agent commission.

Any ideas on a fair and reasonable approach to listing agent commissions in this type of scenario?

Then offer the house to her for 2-3 percent seller side and nothing buyer side.

In reply to cab559

cab559 said:

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I have no qualms asking for my 3% because I am worth 3 times that.


LOLLLL -

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I you don't think you are worth it, why should anyone else?
That is more a shot at all of the people crying about asking for a representation fee paid by buyer or seller on the front side. I have been having a fee discussion at the initial meeting for 20 years as a LO.

Question…how does anyone know how much work it will be before it's done? And is liability/risk a factor?

In reply to Deats99

Deats99 said:

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Ag_0112358132134 said:

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Deats99 said:

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So you have a multiple year relationship with a professional, verbally discuss one set of terms, now that you see an advantage you want to screw them over. Did I read this correctly. I have no qualms asking for my 3% because I am worth 3 times that.
Now if you think buying and selling a house is only about locating a home or a buyer, then you have probably been lucky and never really needed help at the right time.
Do you bargain bin shop all of the financial professionals that handle what is probably one of your top 2 or 3 assets after they have provided you knowledge and guidance for 2 years?
Sorry been in the game for 20 years and listening to lay people discuss how easy it is makes me laugh.

So your answer is she can't represent your buyer as Texas does not allow dual agency.

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There is no real estate agent worth 9% of anything, or even 3% in my opinion. But I may biased since I am a lawyer with expertise in a subset of real property law. To me, real estate agents are lay people who think they aren't lay people. Maybe in some situations an agent can be worth 3%, but to say you're worth three times that is just laughable. No you're not.

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So you or your firm bills you out at $300 to $500 an hour, or even better 30-55% contingency and you're worth that because you can read books and retain information? Lol I watched Suits also thanks.

Oversimplification is a trip isn't it?

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I don't understand what point you're trying to make. Yes, my clients pay $500+ per hour and sometimes give me a contingent interest in the outcome of their litigation as payment for my services.

When is the last time you were paid a 9% commission on a sale of real estate?

In reply to Know1 In my line of work, we develop scopes and fee estimates based on estimated level of effort (hours + expenses) to get permits from agency staff who we don't control (risk factor). We use assumptions and "optional tasks" to manage risk of the level of effort increases due on factors outside of our control. It is based on professional experience.

We make a reasonable profit. Making sure the client gets a quality outcome and doesn't feel like they were gouged allows for repeat business. Risk is manageable, if understood and it is balanced between all parties.

In reply to tamc91 "Risk is manageable, if understood and it is balanced between all parties."

Tell me you haven't worked in real estate without telling me you haven't worked in real estate. (not intended to sound snarky...just not the world we live in)

I completely agree with your premise. The only problem is that you're giving people way too much credit. I can't count the number of times I get lied to in a month. My target is always moving. Not saying it's not manageable, but we will disagree on the level of tolerance we have.

The general public has a basic disdain for real estate agents because they are lazy and not worth the money (not based on your thread, but what I see often on this board)...yet who keeps hiring these folks? They don't show up at your doorstep and force you to sign. If the general public handles real estate transactions as well as they interview agents then my future is secure.

There are many times we head off trouble before it ever starts. We don't alert the client because it would only stress them out. Net effect is that folks don't know what we do, so it appears that we did nothing. Easy is sometimes the function of having a true professional that brings experience and not necessarily the transaction itself.

I'll never blame someone for trying to save money. They should try. I also tell folks if they can negotiate better than I can they shouldn't hire me. Just be careful who you hire and be honest with yourself about the level of service you'll require and most of the time you'll be fine.

Curious....what is your line of work? Do you bill out as you go (get payments) or do you wait and absorb all costs until the end? Do you get paid if someone else screws up?

ETA...nothing in your OP sounds unreasonable.

Guys I like to poke the bear. The point being, if someone showed up, asked you a crap ton of questions, assumed your years of knowledge and 1000's of transactions taught you nothing, and then offered you 20 cents on the dollar for your knowledge. What would you do?

In reply to tamc91 If you are producing the buyer, come to an agreed price and get a real estate attorney to give legal advice, document the transaction and then get a title company to close the transaction. Depending on the agreed sales price it could save you $10,000.00+.

If your buyer doesn't work out, propose 2% for seller side only. You can be flexible on offering to pay any of a buyer agent's commission.

In reply to Agilaw So who handles the bul$#it when all the feels get involved? Our lawyer friend at $500/hr?

This is a legit question

Ex. The crappy drapes that were included on the listing disappear before closing. What's it going to cost for the lawyer to send an email suggesting they be replaced. Oh wait he is acting as an intermediary not an agent.

It ain't all drapes, there are burst pipes, mover damages, lender issues, natural disasters lololol


You don't know what you don't know. We can't prevent everything, but generally know how to handle it and can advise you as your agent(see intermediary part).

You won't believe it until it happens.

In reply to cab559 So let's cram a microscope of government intervention up your arse. Tell me what you do, and justify your profit margin based on the lazy arseholes you compete with.

In reply to tamc91

tamc91 said:

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We worked with an agent to buy a lot that we're building on. She's good and has helped us over the past 2 years pull comps as the market went crazy. Our current home is in a desirable location in SW Austin, so houses that are priced right move quickly without too much effort (i.e. open houses are very rare except when they were trying to create bidding wars 2 yrs ago).

We verbally told her we would list with her, and we may bring a buyer (neighbor and friend of different neighbor are interested) to the table. She has said she'll give us a discount if we bring a buyer. This was 5-6 months ago.

So, in the meantime her national brokerage firm was one in the recent collusion settlement. We're supposed to meet and discuss a listing agreement and I'd like to approach it more as a base commission plus fees for helping an unrepresented buyer, or a reduced buyer's agent commission.

Any ideas on a fair and reasonable approach to listing agent commissions in this type of scenario?

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I've closed on 6 properties with the seller directly and a real estate attorney.(probably small potatoes to most but I do have some experience.) It's very simple. The key is that both parties were serious and wanted to get the transaction done. I'm not sure its so simple if you're just listing and wanting everyone to come in and bid on it.

I say this, if your buyer is ready and serious then don't even go the RE route. Get an attorney and title company and you're good. If the agent you're talking to still has to perform their duties for every other potential buyer but still might sell to your buyer then I would go with 1.5-2%. If you want her to handle the transaction with just your buyer and no one else then max 1%.

In short

You + buyer = Attorney and title company
You + agent + your buyer = 1%
You + agent + everyone and maybe your buyer = 1.5-2%

In reply to Agilaw

Agilaw said:

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If you are producing the buyer, come to an agreed price and get a real estate attorney to give legal advice, document the transaction and then get a title company to close the transaction. Depending on the agreed sales price it could save you $10,000.00+.

If your buyer doesn't work out, propose 2% for seller side only. You can be flexible on offering to pay any of a buyer agent's commission.

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Not intending to argue with you but I will say this. I've been involved in this business for 45 years primarily in mortgage and construction lending. You mention agree on price, not have a Realtor, hire an attorney and save $10K+. I have had very different experiences.

I have been involved in thousands of residential real estate transactions and I would rank them this way.

1. Realtor assisted (assuming a competent Realtor easily the smoothest, most stress free for the buyer and seller.

2. FSBO almost guaranteed to have issues and watch out for delays. I can't speak for the other mortgage people on this thread but I just won't do them. Quit doing them about the time all the information became so readily available and the buying and selling public decided they knew it all. They somehow think the mortgage guy is their de facto Realtor and we're not. This is also by many, many times the most likely transaction to have an appraised value significantly over the sales price. The seller shows up to the closing and crows about having not paid $12K in commission and the buyer and I look at each other knowing the appraisal came in $40K. He saved that Realtor cost though.

Does that ever happen in Realtor assisted transactions? Of course but it's 10 to 1 FSBO over Realtor assisted.

3. Something else.

4. Something else.

5 or maybe 25 attorney assisted transactions. I don't have a lot of experience with these because I avoid them if at all possible but the only fist fight I ever saw at a closing involved attorneys. I saw it with my own eyes or I wouldn't have believed it.

Everyone needs to do what they feel they need to do to protect their own interests and be satisfied they made their best deal but to think Realtors can't bring value is not true in my opinion. I think there are some really good ones on this board and I don't say that because I work with any of them because I don't.

Focusing on one line item on your closing statement rather than the bottom line is a mistake in my opinion.

In reply to jja79 Bottom line is important to many people when dealing with a real estate transaction. This board has discussed these scenarios on many different occasions with different opinions. Real Estate agents often defend their turf and the way it has been done for decades (disclosure - I'm a real estate broker and an attorney). The general public and non-agent posters on this forum will often push back on paying around 6% in realtor fees (not counting other fees involved in a sale) to sell a property. I'm for the real estate industry and the general public. In many, if not most instances, a 6% fee to sale a property really isn't justified and I think the public will be pushing hard against that moving forward. I have had back and forth with Red Pear on these types of topics in the past - but they and other brokerages have a business plan in place that reflects this change and they are having success with those plans. On the other hand, there are many scenarios where an attorney/title company is a great option to handle a real estate transaction. I've been involved with them for well over twenty years with no issues and those sellers did indeed save a substantial amount on the transaction - and they got the added bonus of receiving legal advice as a part of the transaction. I'm in no way against real estate agents. They are in my family line. I'm all for competent/professional agents being very successful in this profession. I'm also for the general public getting charged a reasonable/fair fee for the work being performed on a real estate transaction, knowing it's likely one of the biggest transactions of their lives.

In reply to jja79

jja79 said:

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Agilaw said:

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If you are producing the buyer, come to an agreed price and get a real estate attorney to give legal advice, document the transaction and then get a title company to close the transaction. Depending on the agreed sales price it could save you $10,000.00+.

If your buyer doesn't work out, propose 2% for seller side only. You can be flexible on offering to pay any of a buyer agent's commission.

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Not intending to argue with you but I will say this. I've been involved in this business for 45 years primarily in mortgage and construction lending. You mention agree on price, not have a Realtor, hire an attorney and save $10K+. I have had very different experiences.

I have been involved in thousands of residential real estate transactions and I would rank them this way.

1. Realtor assisted (assuming a competent Realtor easily the smoothest, most stress free for the buyer and seller.

2. FSBO almost guaranteed to have issues and watch out for delays. I can't speak for the other mortgage people on this thread but I just won't do them. Quit doing them about the time all the information became so readily available and the buying and selling public decided they knew it all. They somehow think the mortgage guy is their de facto Realtor and we're not. This is also by many, many times the most likely transaction to have an appraised value significantly over the sales price. The seller shows up to the closing and crows about having not paid $12K in commission and the buyer and I look at each other knowing the appraisal came in $40K. He saved that Realtor cost though.

Does that ever happen in Realtor assisted transactions? Of course but it's 10 to 1 FSBO over Realtor assisted.

3. Something else.

4. Something else.

5 or maybe 25 attorney assisted transactions. I don't have a lot of experience with these because I avoid them if at all possible but the only fist fight I ever saw at a closing involved attorneys. I saw it with my own eyes or I wouldn't have believed it.

Everyone needs to do what they feel they need to do to protect their own interests and be satisfied they made their best deal but to think Realtors can't bring value is not true in my opinion. I think there are some really good ones on this board and I don't say that because I work with any of them because I don't.

Focusing on one line item on your closing statement rather than the bottom line is a mistake in my opinion.

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My boy Jed here and I have butted heads on mortgage stuff for 15+ years here on TexAgs, but he speaks more truth in the statements than you can imagine. Ask 20 LOs if they use realtors and I bet 18 say yes.

Lots of silliness on this thread. Some seem to be debating whether a realtor is paid for paperwork or whole facilitation of the buy / sell business. From now until the end of time, buying and selling a house will require dozens of hours of work and preparation. For this thread, I've seen several decide that a ALL transactions are closed and only need legal advice to close (like in the OP.) I don't think i've seen any stay on task well enough to claim otherwise.


I am sure the value proposition of an attorney in a transaction is much less than we are being led to believe here today. At 250 per hour, I would guess a perfect transaction would include the following: 5 hours of getting acquainted and signing an agreement, 10 hours of showing and tire kicking, 2 hours of paperwork, and 1 hour of closing. So 18 hours or 4500 dollars of billable time. Now imagine the transaction is canceled b/c someone died and the deal is off...the buyer just wasted 4500 dollars. With a realtor, the buyer wasted zero.

And it is not worth debating the 5 hours of closing the deal or 10 hours of showing b/c it has to be done in majority of transactions.


I'd wager that 90% of realtors wouldn't pass my intelligence test, but reality is that most people aren't paying for their knowledge of home construction or terms and conditions. They are paying b/c they need busy work done over the period of weeks / months and need help getting into a title company ... that hires attorneys to handle the closing (i.e. a completely separately business than marketing and getting people to agree on values.)


In brief, I dont see a world where all transactions are completed via attorneys for less than the 6% everyone is worried about. To argue otherwise would include the assumption that an attorney is willing to do marketing, business development and administration for free ... just so they can fill out some forms.

In reply to Deats99

Deats99 said:

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Guys I like to poke the bear. The point being, if someone showed up, asked you a crap ton of questions, assumed your years of knowledge and 10000's of patient interactions taught you nothing, and then offered you 20 cents on the dollar for your knowledge. What would you do?

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You must be a doctor.

If you look at RE agents as a whole, most are not making a killing. If you look at their work as a whole, they don't make that much per hr. If you look at each listing on its own, then you can see why many non RE people think they are over priced.

I just purchased a 1M property, had one showing, and i handled the inspection/mortgage/closing by myself. This is how I like to buy/sell.

My RE saw me at showing for 15 minutes and never saw him after. I didn't even contact my agent for prob 3 years since my last purchase b/c I know what I want and don't like to waste mine/their time. I find my own properties on MLS. I have closed on around 20 properties in my lifetime and this is the process I like. Getting a mortgage is never a problem b/c I work with the same broker for the past 10 years.

So is my 1M transaction worth paying 30K to my RE agent? I like them and but that would be like billing me at 3k/hr.

But I understand they have to make a living and they spent countless hours dealing with deadbeat buyers who have little intentions to buy but just enjoy filling their weekends looking at homes. Dealing with buyer/sellers who want even the most irrelevant issues fixed/explained to their likings.

This is the disconnect. People who complain that they make too much just look at the smooth transaction they were involved in. They don't look at the unpaid work they do or the crazy personalities in this world.

It is just like a doctor. When you see my $1500 bill for about 10 minutes of work, then you think doctors all are making millions a year. But you don't realize that $1500 bill is cut down to $300 by good insurance carriers which are maybe 40%. Then its cut down to $100 by decent payers. Then cut down to $50 by the government insurance. Then cut down to $0 by the uninsured which along with the gov insurance can be 50%+.

Then tack on 10% for the billing side. Then add on the administrative, staff, EMR, supplies, etc.

The high paying carriers (RE deals) are paying for all the other poor Pts (RE transactions).

If you really want things to be fair, then it should be fee for service like most other field. But I doubt this will happen because what are the "disenfranchised" who can't afford to hire a RE do?

In reply to Deats99 March 31 is my last day. I'm going to let you boys take this into the future. I'll be checking in on the board for entertainment purposes only between rounds of golf and living with no morning alarm set.

In reply to jja79

jja79 said:

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March 31 is my last day. I'm going to let you boys take this into the future. I'll be checking in on the board for entertainment purposes only between rounds of golf and living with no morning alarm set.

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Enjoy it! How's your boy doing?

In reply to jja79 Good luck in retirement. I am right behind you.

In reply to Medaggie

Medaggie said:

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Deats99 said:

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Guys I like to poke the bear. The point being, if someone showed up, asked you a crap ton of questions, assumed your years of knowledge and 10000's of patient interactions taught you nothing, and then offered you 20 cents on the dollar for your knowledge. What would you do?

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You must be a doctor.

If you look at RE agents as a whole, most are not making a killing. If you look at their work as a whole, they don't make that much per hr. If you look at each listing on its own, then you can see why many non RE people think they are over priced.

I just purchased a 1M property, had one showing, and i handled the inspection/mortgage/closing by myself. This is how I like to buy/sell.

My RE saw me at showing for 15 minutes and never saw him after. I didn't even contact my agent for prob 3 years since my last purchase b/c I know what I want and don't like to waste mine/their time. I find my own properties on MLS. I have closed on around 20 properties in my lifetime and this is the process I like. Getting a mortgage is never a problem b/c I work with the same broker for the past 10 years.

So is my 1M transaction worth paying 30K to my RE agent? I like them and but that would be like billing me at 3k/hr.

But I understand they have to make a living and they spent countless hours dealing with deadbeat buyers who have little intentions to buy but just enjoy filling their weekends looking at homes. Dealing with buyer/sellers who want even the most irrelevant issues fixed/explained to their likings.

This is the disconnect. People who complain that they make too much just look at the smooth transaction they were involved in. They don't look at the unpaid work they do or the crazy personalities in this world.

It is just like a doctor. When you see my $1500 bill for about 10 minutes of work, then you think doctors all are making millions a year. But you don't realize that $1500 bill is cut down to $300 by good insurance carriers which are maybe 40%. Then its cut down to $100 by decent payers. Then cut down to $50 by the government insurance. Then cut down to $0 by the uninsured which along with the gov insurance can be 50%+.

Then tack on 10% for the billing side. Then add on the administrative, staff, EMR, supplies, etc.

The high paying carriers (RE deals) are paying for all the other poor Pts (RE transactions).

If you really want things to be fair, then it should be fee for service like most other field. But I doubt this will happen because what are the "disenfranchised" who can't afford to hire a RE do?

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I see what you did there. I wasn't exactly sure on the numbers so I sacrificed a zero but it's enraging to have some yahoo tell you that your intelligence gained over 20 years is not worth anything when they don't know what it really cost or for that matter what it really pays.
Example. I am fat. I choose to give myself my own shots of munjaro If I was smart, I would pay a Dr or a nurse 30 bucks to do it but I'm cheap arse so I save that and give them to myself. Is risking my life and health were really worth $30 . I am probably being stupid

What happened on this thread? Hah, every one just do you and whatever you feel comfortable with. Carry on.

In reply to Red Pear Felipe

Red Pear Felipe said:

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Or you could list it with Red Pear Realty for 1.5% and bring your buyer. This is assuming you haven't signed any listing agreement with her. What part of SW Austin are you in? I have a listing in Western Oaks and we got an offer on the first day.

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Discount brokerage…….you get what you pay for.

In reply to Red Pear Realty

Red Pear Realty said:

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OutdoorAg said:

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Discount brokerage…….you get what you pay for.

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You mean three of the five realtors in Texas that I know of who hold Master of Real Estate degrees from TAMU, a top 5 global program for real estate? Or are you talking about how we do about seven to ten times more deals in a given year than the average agent? Or the fact that we saved our clients about half a million dollars in 2023? You know we all do this to help our fellow Aggies, right? None of us even need to offer our discounted service to you? That I own another brokerage that charges the full market rate and Red Pear is basically just the Aggie hookup? Felipe was nicer than I will be. Please don't ever call any of us for help.

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Jamie,

Whatever you do, don't tell him about how we as RPR agents make the same per transaction as your average KW realtor except the client benefits because they get back 1/2 of the commission.