It's a new trend, and it makes a lot of creepy, but wise sense. The buyer's agent who doesn't want his commission. He'll represent himself and stipulate that the listing agent keep every penny. All six percent (or whatever the listing agreement says.)
The buyer in this situation is an investor. The concept became popular when the sellers market was at its lowest (locally) in 2011. Investment companies use the (we don't want a commission) angle in hopes to shake the listing agents loyalty and fiduciary responsibility. In other words, the listing agent will double their commission if they can convince the seller to take the "deal."
What's the catch?
The simple truth is that the offer sucks. It's laced with ridiculous demands and requests. Here are two examples:
1. Seller to vacate the property 48 hours before closing. (What if the buyer doesn't close?)
2. The Title company will not receive earnest money from the buyer "until the home is approved by the buyer." (Huh?)
And last but not least, the offer is cash, but much lower than fair market value. This morning I received an offer for 157k on my 225k listing. As if giving me extra commission is somehow going to make the deal work.
The investor is hoping that a greedy listing agent will somehow be able to convince their own client to take a garbage deal. I'm just calling it for what it is. If my seller is so desperate to sell then I'm certainly not taking double commission when a buyer agent is foregoing his commission.
Talk about a Code of Ethics hearing waiting to happen!
It is the requirement and responsibility of the listing agent to always put their clients interest above their own. It's never a good business decision to convince your seller to take less than what the market will pay unless your seller is demanding a rapid fire sale.