Is this a typical real estate cheat?

Question

I'm selling a house and my agent likes me to keep my original asking price, but have ME offer closing costs and possible money down for the buyer. Is this to maximize their commission?

Answer 1

some buyers don't have excess cash down for down payment and associated closing costs.

your agent is encouraging you to structure your listing this way so that any such buyers would have the additional help of you paying some of the closing costs and/or down payment.

this is fairly common.

it can sometimes make a house reachable for a cash strapped buyer.

the agents commision is based on the sale price though...so he will make more than if you sold the house for less and didn't contribute to closing costs.

i'd take each offer individually...if extra help isn't needed by the buyer then sell it for less without the cash back to the buyer! if the offer isn't structured that way to begin with you could always counteroffer that way if the buyer has adequate funds to begin with!

good luck!

Answer 2

NOT AT ALL.  If you pay 3000 in closing, the commission is only 90.  So please . . .

Buyers need cash to purchase and this is what builders do all the time.  

YOU HAVE A SMART AGENT that is actually marketing your home vs just trying to sell it.  They are placing your home in a better position to sell by solving problems for buyers.

Call your agent today and say thank you!!!!!!!!!!!

Answer 3

Actually, it helps the buyer afford a larger house (and yes, it does how the effect of increasing the commission, but unless you are talking knocking a bunch off the price, probably not enough to entice the agent for that reason alone).

Many buyers can afford a good size mortgage, but do not have access to the necessary cash needed to buy a house.  Also, with the recent foreclosures, banks are tightening up the loan requirements, making it harder to borrow without down payments.

By offering help with the closing costs and money down, you reduce the cash-up-front requirement for the buyer and makes it easier for you to sell your house.  A quick example

Assume the buyer needs 5% down and closing costs are say 3%...on a $400,000 that is $32,000 in cash the buyer needs.  Now, say your house isn't selling and you decide to lower the price by $25,000 to $375,000.  The agent's commission would go down $1,500 and the buyer would still have to come up with $30,000.  The agent would probably lose the sale.

Rather, if you kept the price at $400,000, offered $22,000 in closing and down payment help, the agent gets the commission, the buyer only has to come up with $10,000 cash ($32,000 - $22,000) and you actually pocket an extra $1500  (you were going to lower the price $25,000, instead you gave up $22,000 for $3,000 of which $1500 went to the agent in commission difference between 375 and 400K)

A win-win situation for everyone.

Answer 4

You can simply write in any counter offer that the closing cost and any money returned to the buyer is deducted from the  Realtor's commission percentage. So if the house sells for $100,000 and you offer $5,000 in closing costs, the Realtor's commission is based on $95,000.

The idea of paying for the closing cost is to give the buyer the maximum amount of mortgage money.