On a $95k rural house, who writes the check for the buyer agent fee

I still ask for the concession on every offer, because in my market a decent number of listing agents advise their sellers to say yes and I'd be leaving money on the table by not asking. The part that bites is exactly what you said about appraisal. I had a $118k contract where I'd bid up $4k to cover comp and the appraisal landed at $114k, and then the seller and I were arguing about who ate the gap when the gap was a fee I invented. Now I ask, but I don't raise my price to buy the yes.

Dumb question from the trades side. If the seller agrees to contribute, does that money physically go to your agent or does it just reduce what you bring to closing?

@solder it shows up as a credit on the settlement statement and the brokerage gets paid out of the closing proceeds, so functionally the seller's net drops and your cash at close drops. The paperwork varies by state.

@hollow the way I'd model it is net to seller against your total basis and your cash in. Financing the fee through a higher price means you're paying interest on it for as long as you hold, and at $6k on a rural single family that's not nothing over ten years. Paying direct keeps basis lower, which also helps if you're refinancing on a value-add. The case for the concession is purely cash preservation today. If cash today is your binding constraint, ask for it. If it isn't, the direct pay version is cheaper over the hold. Depends which constraint is actually tight for you, and only you know that.

Whatever you pick, the fee owed to her should live in your agreement with her and not depend on what the seller does. I've read a few of these while getting my own paperwork ready and the good ones say the buyer owes X, and any seller contribution is credited against X. The bad ones are vague about who covers the shortfall and that's where fights come from.

Is buyer comp still displayed anywhere in your MLS? Mine took the field out entirely and now it's a phone call to the listing agent every single time, which slows everything down.

The net thinking @hollow described is the whole game with older sellers. I've watched offers with a concession request get rejected in favor of a lower gross number with no strings, because the seller could understand the second one in one sentence.

The clause I'd read three times is the one that says the buyer pays the difference between the agreed fee and whatever the seller contributes. That's the standard and it's fine, but check whether it also says the buyer's obligation survives if you close with a different brokerage's listing, and check the language on properties you find yourself. Have your own attorney look at it, since these forms differ by state.

I pay flat and direct now, always, and I don't put comp in the contract at all. Two reasons. My offers get read faster because there's one number on them, and I don't have a seller's agent doing math on my agent's paycheck in the middle of a negotiation. On a $90k house I'd rather offer $86k clean than $92k with strings.

The $6,000 minimum is the honest price of the work on a house that cheap. Five hours of driving, a contractor walk, comps in a county with maybe nine relevant sales. The buyers who spend a month trying to grind that number down end up getting the leftover attention, which is expensive in a different way.

So if I understand it, the seller doesn't actually care where their money goes, only what lands in their account? Then path one is really just a lower offer wearing a costume.

@compass that's roughly it, except a seller credit interacts with the loan. There are limits on how much of a credit a lender will allow depending on the program and occupancy, so at some point the credit stops being usable and you'd have to confirm the current limit with the lender in writing.

We quote flat on anything under $150k and treat a seller contribution as a discount to the client's out of pocket rather than our compensation source. Two years of that and it's made pricing conversations shorter. The buyers who work with us repeatedly stopped asking after the second deal, because they've seen what the fee bought them. That's the part general buyer agents don't have.

My pre-license course talked about buyer comp like the seller was still paying it by default, which was already out of date when I sat there. @cobalt do you get pushback from listing agents when you ask for a contribution, or are they used to it now?

On raw land the appraisal problem @keystone hit barely exists if you're paying cash, so the concession math is less risky there. Different animal though, my last two looks were unimproved parcels with no financing involved.

@arbor and in my state sale prices aren't public at all, so the comp set is whatever the agent can assemble from her own closings and relationships. That's actually the argument for paying a specialist properly out here. The data doesn't exist for free.

Starting from nothing here, so: if I pay the agent $6k directly at closing, does the lender count that as part of my down payment or is it just extra cash I need?

@ember I asked something similar and was told it's cash you need on top, but confirm it with whoever is writing your loan because the answers I got weren't consistent.

My plan on paper is ask for the contribution, and if it's a no, pay direct and drop the offer by the fee. Which means I need the cash available either way, which is the part I hadn't budgeted for until this thread.

Buying with cash for the first one, so no appraisal and no lender caps. Paying direct seems obviously simpler in that case. I'd rather hand over one check I understand than build a concession into a price I then have to defend.

Went through this twice, the way I usually do. Path one keeps cash in my pocket now and raises what I owe on the house. Path two costs cash now and keeps the purchase price honest. Is there any version where path one is actually cheaper overall, or is it only ever a cash flow choice?

@juniper it's cheaper if the seller genuinely accepts the same gross price with the contribution attached, which happens on stale listings where the agent has already prepped them for it. I've had that go my way twice. I've also had a low appraisal turn a $3,500 contribution into a week of arguing and a $2,000 price cut, so the average is less flattering than the wins.

Direct pay, offer less, done. I don't want a fee structure I have to explain to a stranger mid-negotiation.