On a $95k rural house, who ends up paying the buyer's 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?

@mitchell_ray4 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 the buyer's cash at close drops. The paperwork varies by state. @laurenkim53 the way to model it is net to seller against total basis and cash in. Financing the fee through a higher price means paying interest on it for as long as the property is held, and at 6,000 dollars on a rural single family that's not nothing over ten years. Paying direct keeps basis lower, which also helps on a refinance for a value-add. The case for the concession is purely cash preservation today. If cash today is the binding constraint, ask for it. If it isn't, the direct pay version is cheaper over the hold. It depends which constraint is actually tight, and only the buyer knows that.

Whichever path is chosen, the fee owed to the agent should live in the buyer's agreement with her and not depend on what the seller does. The good versions of that agreement say the buyer owes X, and any seller contribution is credited against X. The vague ones leave open who covers a 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 @laurenkim53 described is the whole game with older sellers. Offers with a concession request routinely get rejected in favor of a lower gross number with no strings, because the seller can understand the second one in one sentence.

The clause worth reading three times is the one that says the buyer pays the difference between the agreed fee and whatever the seller contributes. That's standard and it's fine, but it's worth checking whether the obligation survives closing with a different brokerage's listing, and checking the language on properties found independently. An attorney should look at it locally, 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. Buyers who spend a month trying to grind that number down tend to 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.

@jessreyes12 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.

A flat fee on anything under $150k, treating a seller contribution as a discount to the client's out of pocket cost rather than as the compensation source, tends to shorten pricing conversations over time. Buyers who work with the same agent repeatedly usually stop questioning the fee after the second deal, once they've seen what it bought them. That repeat trust is something a general buyer's agent working one-off deals doesn't build as easily.

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. @angela_burke 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 @samantha_ruiz 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.

@diane_kowalski and in states where sale prices are not public at all, the comp set is whatever the agent can assemble from her own closings and relationships. That is the actual argument for paying a specialist properly in a market like this. The data does not 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?

@bmoreno23 The general answer to that question is that it's cash needed on top, but that should be confirmed with whoever is writing the loan, because answers on this point are inconsistent across lenders.

The workable plan on paper is to ask for the contribution, and if that is a no, pay direct and drop the offer by the fee. Either path means the cash needs to be available, which is the part that is easy to leave out of the budget until it comes up.

If the first one is a cash purchase, there is no appraisal and no lender cap, and paying direct is the obviously simpler route in that case. One check the buyer understands beats a concession built into a price that then has to be defended.

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?

@kevin_lombard it is cheaper when the seller genuinely accepts the same gross price with the contribution attached, which tends to happen on stale listings where the listing agent has already prepared them for it. That outcome is real and it does come up. The other outcome comes up too: a low appraisal turns a $3,500 contribution into a week of arguing and a $2,000 price cut. Average the two cases together and the number is less flattering than the wins.

Pay her directly and reduce the offer to match. A fee structure that has to be explained to a stranger mid negotiation is a liability.