So if you had $200,000 of medical expenses, $50,000 of lost wages, and $400,000 of pain and suffering, and a 40% contingency, the attorney would take $260,000, leaving the client with only $390,000. They would take $80,000 of the $200,000, which is basically similar to what people have happen with mortgages on their homes.

I agree with Craig, but for a different reason. A contingency fee takes a % of what the principal “gets”. In some cases the agents get more than the principal. If a seller has $30,000 of equity and the real estate commission is $30,000, then the seller gets nothing and the agents get it all. An attorney would never take the entire award in a contingency case, based on what I see on TV, anyway

Any time an agent shows a buyer a property, the agent is guaranteed a commission? Maybe agents at Redfin, but it’s called a salary.

An agent, on the other hand, represents the client in a matter where the other party wants essentially the same thing: a closed deal. What are the risks to an agent that the deal will not close? And if not this deal, then the next deal — the client wants to buy or sell, after all, so presumably that will happen eventually. Nobody is actively trying to prevent it. A “contingency fee” does not make any sense in this case — there is no need to reward the agent for assuming the risk of no payday whatsoever.

re your paragraph one above:

1) in our area buyer’s agents make appointments to view the house by calling the seller direct. So we almost always have the opportunity to speak with the seller if the home is occupied.

2) Agents tell other agents things they would never tell an attorney.

As to the buyer agent’s fee, I think nationally you would be correct, but not in my service area. I doubt you would find one person who has ever heard of Redfin (and are there many left who haven’t?) who would not be talking about the buyer agent fee with their agent. Most will pay more for more. Rarely will a buyer these days think the services are free and the cost non-negotiable. I don’t know about Puyallup, Tacoma, Maple Valley and Federal Way (as example), but I do know that in my service area of North Seattle and Eastside, a buyer thinking the seller is paying the commission is rare.

Regardless, you point out some of the advantages of using an agent. Perhaps the service is worth the cost in some instances.

As for the buyer’s fee: correct me if I’m wrong, but isn’t it still the customary practice for buyer’s agents to simply rely on the MLS commission for payment and to not discuss compensation with the buyer? I know that is not how you operate, to your great credit. But that is still how the “system” works by and large, isn’t it? If that is the case, then I can certainly presume to know the buyer’s agent’s fee — it almost certainly ranges from 2.5 to 3%.

Writing the offer has more to do with knowing the seller’s weaknesses than you apparently realize. A collaboration of efforts would likely produce a different offer than one written without seeing the house. You’d be amazed at what you see in the house, like “moving to chicago” highlighted in red on a calendar on the refrigerator. Knowing that the seller will be carrying a vacant property as of X date is important info in negotiations. Knowing that the person in the house is having all of their bills paid by their spouse until the home sells is also important, and rarely is info like this derived by asking direct questions. Sometimes planning a 2nd visit to the home when you know the owner is going to be home is of huge advantage.

As to the rest of your question, you obviously don’t know what my fee is. Why do you imply that you do? Do you really think there is one standard fee for all agents these days? There is not, and all clients do not pay the same fee. Some find the homes themselves, some do not. Some need a lot of assistance with financing issues, some do not. The offering in the mls is only the amount “suggested” by the seller and included in the asking price. The actual fee is determined by the client and their agent, not the seller. The seller is just making sure that the fee can be included in the financing.

As for your inspection anecdote: I take it, then, that you think your fee is merited because in this one instance you saved your clients from buying a house with a defect. How about other thousand or so transactions you handled — did you provide something of comparable value in each instance? Any instance? Anything can be proven anecdotally, Kary — there is always an exceptional story. Can you make the argument that — GENERALY SPEAKING — agents are worth the costs, given that attorneys provide the same essential and mandatory service for much less?

I note that you still have not answered my question: Do the costs of an agent — $12k — outweigh the benefits?