Can You Choose To Take Your Commission or Get a Discount When You Buy For Yourself?

Whenever I’d buy personal properties for me and my wife, we could choose to do one of two things with the buyer’s agent’s commission.

Either we could:

1. Take the commission as a discount, or

2. Be paid the commission when we buy

In our market, it is common for the buyer’s agent’s commission to be about 3% (although it is negotiated).

Discount

If you chose to take the commission as a discount, you’d be effectively buying the property for about 3% less.

For a typical $400K property around here, that might be getting a discount of $12,000.

If we were getting a loan on that, depending on the interest rate, that might save us about $60 per month in payment.

Take Commission

If you chose to be paid the commission, you’d receive the $12,000 as a check at closing.

So, if you put 5% down when you bought the property (that’s about $20,000), you’d be getting back $12,000 of that $20,000.

So, you’re effectively only putting down 2% plus your other closing costs when you buy a property and choose to get paid for it instead of taking the discount.

Buy Again Next Year

To buy another property again the next year, you’d now only need to save up $8,000 or 2% down (instead of $20,000 or a full 5% down).

This is a key benefit in The Ultimate Real Estate Agent Retirement Plan… being able to use your commission to reduce how much you’ll need for down payments.