{"id":1283,"date":"2007-04-09T13:56:36","date_gmt":"2007-04-09T20:56:36","guid":{"rendered":"http:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/?p=1283"},"modified":"2007-07-16T21:01:06","modified_gmt":"2007-07-17T04:01:06","slug":"who-pays-the-buyers-agent-once-weve-divorced-the-commissions-we-can-stop-worrying-about-it","status":"publish","type":"post","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1283\/who-pays-the-buyers-agent-once-weve-divorced-the-commissions-we-can-stop-worrying-about-it\/","title":{"rendered":"Who pays the buyer&#8217;s agent? Once we&#8217;ve divorced the commissions, we can stop worrying about it"},"content":{"rendered":"<blockquote><p><i>Joke Number one:<\/i><br \/>\n<b>Q:<\/b> If you came upon the Buddha in the guise of a hot dog vendor, what should you say?<br \/>\n<b>A:<\/b> Make me one with everything.<\/p>\n<p><i>Joke number two:<\/i><br \/>\n<b>Q:<\/b> Top Drawer Listing Agent, why do you charge a 7% commission to list a home for sale?<br \/>\n<b>A:<\/b> Because the lenders won&#8217;t pay any more than that.<\/p><\/blockquote>\n<p>Jonathan Greene at <a href=\"http:\/\/www.realopinionated.com\/do-buyers-really-get-free-representation\/\" target=\"_blank\">Real Opinionated<\/a> invited me to participate in a debate he is having on the question of who pays the sales commissions in the transfer of residential real estate. Todd Tarson has already weighed in with an argument I consider unassailable, so I would rather veer off in another direction: Divorcing the buyer&#8217;s agent&#8217;s compensation from the listing agent&#8217;s commission.<\/p>\n<p>I have written a ton on this subject, with my views changing over time, so please forgive me for digging into the archives:<\/p>\n<ul>\n<li><a href=\"http:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/?p=487\" target=\"_blank\">Butterflies might be free, but home-buyers pay for real estate advice &#8212; whether they know it or not&#8230;<\/a>\n<\/li>\n<li><a href=\"http:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/?p=301\" target=\"_blank\">Who pays when &#8220;seller pays closing costs&#8221;? The buyer&#8230;<\/a>\n<\/li>\n<li><a href=\"http:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/?p=296\" target=\"_blank\">Securing the home-buyer&#8217;s place at the table: How two simple reforms can finally result in a full, uncompromised form of buyer representation&#8230;<\/a>\n<\/li>\n<li><a href=\"http:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/?p=336\" target=\"_blank\">Ask the Broker: What compensation does a buyer&#8217;s agent have to disclose&#8230;?<\/a>\n<\/li>\n<li><a href=\"http:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/?p=555\" target=\"_blank\">Defining the Divorced Commission: A short-hand term for understanding alternative real estate compensation models&#8230;<\/a><\/li>\n<\/ul>\n<p>There&#8217;s a lot more, but the Cliff&#8217;s Notes version is that I agree with Todd: Except in a Short Sale, the buyer brings every dollar to the closing table, so every disbursement of dollars comes from the buyer. The seller brings the house. The idea that the seller is paying anything is an vestigial artifact of sub-agency, a reflection of the fact that the seller hires the listing agent to market the property, and, therefore, in most cases sets the amount of the buyer&#8217;s agent&#8217;s compensation.<\/p>\n<p>It is plausible to argue that the seller pays the lister and the buyer pays the buyer&#8217;s agent, and, while I don&#8217;t agree with that argument, it&#8217;s not worthwhile quibbling about it.<\/p>\n<p>Instead, it would be much more worthwhile to completely divorce the commissions, so that what should now be true <i>de facto<\/i> will be true <i>de jure:<\/i> The seller would <a href=\"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1283\/who-pays-the-buyers-agent-once-weve-divorced-the-commissions-we-can-stop-worrying-about-it\/#more-1283\" class=\"more-link\">Read more<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Joke Number one: Q: If you came upon the Buddha in the guise of a hot dog vendor, what should you say? A: Make me one with everything. Joke number two: Q: Top Drawer Listing Agent, why do you charge a 7% commission to list a home for sale? A: Because the lenders won&#8217;t pay [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_crdt_document":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,6,5],"tags":[],"class_list":{"0":"post-1283","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"hentry","6":"category-blogging","7":"category-marketing","8":"category-real-estate","10":"no-featured-image"},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":2181,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/2181\/a-consumers-guide-to-the-divorced-real-estate-commission-will-the-negotiating-their-buyers-agents-compensation-make-buyers-more-practical\/","url_meta":{"origin":1283,"position":0},"title":"A consumer&#8217;s guide to the divorced real estate commission: Will the necessity of negotiating their buyer&#8217;s agent&#8217;s compensation make buyers more practical?","author":"Greg Swann","date":"November 8, 2007","format":false,"excerpt":"Part II: How buyers can finally take a seat at the grown-up's table When a potential home-seller calls me to set up a listing appointment, very often the first question I will hear is, \"How much do you charge?\" A motivated seller is done with the house, and now all\u2026","rel":"","context":"In &quot;Marketing&quot;","block_context":{"text":"Marketing","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/marketing\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":2208,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/2208\/a-consumers-guide-to-the-divorced-real-estate-commission-undermining-the-arguments-in-support-of-the-status-quo\/","url_meta":{"origin":1283,"position":1},"title":"A consumer&#8217;s guide to the divorced real estate commission: Undermining the arguments in support of the status quo","author":"Greg Swann","date":"November 11, 2007","format":false,"excerpt":"Part V: Why arguments for the current method of compensating real estate agents and against divorcing the real estate commissions must fail As I write this, the National Association of Realtors is preparing for its annual convention, to be held this year in America's playground, Las Vegas, Nevada. This year\u2026","rel":"","context":"In &quot;Marketing&quot;","block_context":{"text":"Marketing","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/marketing\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":550,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/550\/smashing-the-idols-understanding-market-value-in-full-context\/","url_meta":{"origin":1283,"position":2},"title":"Smashing the idols: Understanding market value in full context . . .","author":"Greg Swann","date":"October 17, 2006","format":false,"excerpt":"Nominate me Ikonoklastes, for I am come to raze this temple of half-baked ideas. I want to come back to the MLS later in the week, and I have a deep need to expose the motivations of brokers, as these are distinguished from the motivations of lesser licensees. But for\u2026","rel":"","context":"In &quot;Blogging&quot;","block_context":{"text":"Blogging","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/blogging\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":144,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/144\/the-buyer-can-and-should-negotiate-the-buyers-agents-compensation\/","url_meta":{"origin":1283,"position":3},"title":"The buyer can &#8212; and should &#8212; negotiate the buyer&#8217;s agent&#8217;s compensation . . .","author":"Greg Swann","date":"July 28, 2006","format":false,"excerpt":"My phone hasn't rung yet, but my ears are already burning. My column in today's Arizona Republic: Buyer should negotiate compensation for agent. (A more-permanent link.) This is Ardell's turf, of course, although my take on The Big Picture is somewhat different. In any case, I expect to have my\u2026","rel":"","context":"In &quot;Marketing&quot;","block_context":{"text":"Marketing","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/marketing\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":236,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/236\/how-to-exterminate-a-cowbird-a-comedy-in-three-acts\/","url_meta":{"origin":1283,"position":4},"title":"How to exterminate a cowbird &#8212; a comedy in three acts . . .","author":"Greg Swann","date":"August 23, 2006","format":false,"excerpt":"Act I -- Why Realtors hate discount listings... People think ordinary on-the-ground Realtors hate discount listings because of the discount. That's may be true of many real estate brokers, but real-life Realtors have two much better reasons to hate discount listings. First, the Buyer's Agent will have to do all\u2026","rel":"","context":"In &quot;Disintermediation&quot;","block_context":{"text":"Disintermediation","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/disintermediation\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":555,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/555\/defining-the-divorced-commission-a-short-hand-term-for-understanding-alternative-real-estate-compensation-models\/","url_meta":{"origin":1283,"position":5},"title":"Defining the Divorced Commission: A short-hand term for understanding alternative real estate compensation models . . .","author":"Greg Swann","date":"October 19, 2006","format":false,"excerpt":"I just spent a very informative hour on the phone with Jeff Brown, and I want to summarize what I took away from our conversation. First, Jeff has a very different understanding of the term \"co-broke\" compared to the way it is used in Arizona. When we went to essentially\u2026","rel":"","context":"In &quot;Blogging&quot;","block_context":{"text":"Blogging","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/blogging\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/1283","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/comments?post=1283"}],"version-history":[{"count":0,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/1283\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/media?parent=1283"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/categories?post=1283"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/tags?post=1283"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}