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- CORONA NICK
- Contributions:2218
Nay... or yea.. only if your not willing to do your own research.
OMG did he just say "free representation." You should be ashamed to write that here on the buyers' board Cliff.
- Ryan Gable, "StartingPoint Realty"
- Contributions:94
Have you bought a home before?
My best advice is to ask friends / colleagues about their experience with a buyer's agent. Did it help them? How? Would they use the agent again? Why? If you have a certain agent in mind, ask for RECENT references. Let your friends / colleagues and an agent's references paint the picture for you.
My best advice is to ask friends / colleagues about their experience with a buyer's agent. Did it help them? How? Would they use the agent again? Why? If you have a certain agent in mind, ask for RECENT references. Let your friends / colleagues and an agent's references paint the picture for you.
- Callista, "warriorprincess"
- Contributions:681
I will use one the first time,..but probably not the second (if there is a second time).
Um ya Cliff - you get paid by the seller from the proceeds of the deal. That means that, when evaluating my offer, the seller has to factor in your 3% - that means that I am paying your fee as part of the purchase price.
Give me a break.
Give me a break.
- Charlotte Patterson (KANSAS), "Charlotte Patterson"
- Contributions:106
It truly is a chicken or egg scenario. The home sales because the buyer is willing to purchase it....thus the seller factors in the commission for the agents involved. There are strong cases for who pays for the agent seller or buyer. Settlement statments show the fees coming from the sellers side. As far as bonuses go, It could be considered "enticement" in my opinion. In the midwest or at least the Wichita, KS area, bonuses are not nearly as prevelant as in other areas. It's a regional thing. Here, they would need to be disclosed. Personally, I would pass the "bonus" amount on to the buyer.
- caliguy
- Contributions:1283
Another option if you're in between is a so-called discount online brokerage...they will more or less take your lead, not give you really anything in the way of input (for some this is a good thing) and then just handle negotiations, but you'll get a rebate on their commission that you could use to reduce the sales price.
"The home sales because the buyer is willing to purchase it....thus the seller factors in the commission for the agents involved."
So Charlotte, I am missing the part where the buyers' agent does something in particular to earn a commission here. I don't care what a settlement statement says - the money is rolled into the buyer's mortgage and will have to be paid (with interest, I might add) by the buyer. It is nothing short of deceitful to try to suggest that a buyers' commission is "free."
So Charlotte, I am missing the part where the buyers' agent does something in particular to earn a commission here. I don't care what a settlement statement says - the money is rolled into the buyer's mortgage and will have to be paid (with interest, I might add) by the buyer. It is nothing short of deceitful to try to suggest that a buyers' commission is "free."
- Tronda Musgrove, "tmusgrove"
- Contributions:1
Most of the time seller has an agreement to pay an agreed upon % of sale price as realtors commision to broker at closing,listing agent then shares that commission with a buyers broker if there isnt a buyers agent than the listing broker for the seller keeps 100%. The listing agent is there to protect the seller and to see to his and/or her interest, A buyers agent represents the buyer and see to the buyers best interest. Assisting said buyer from, showings, to contract thru close and beyond.
My listing agent listed our house for 2.5% with a buyers' side commission of 3% to be paid to a buyers' broker that brought us a buyer. My listing agent agreed to take 3.5% TOTAL if she brought in a buyer on her own.
I had a potential listing agent try to tell us that he would be entitled to 6% if he listed and also found us a seller - by law - due to "automatic dual agency." That was just simply false. Maybe that was how he was looking to set up his contract, but it was certainly not a legally mandated term.
The point here is that all of this is negotiable - but in the end, it is the buyer that shoulders all costs because they are factored into the purchase price. Nothing is "free."
I had a potential listing agent try to tell us that he would be entitled to 6% if he listed and also found us a seller - by law - due to "automatic dual agency." That was just simply false. Maybe that was how he was looking to set up his contract, but it was certainly not a legally mandated term.
The point here is that all of this is negotiable - but in the end, it is the buyer that shoulders all costs because they are factored into the purchase price. Nothing is "free."
- Hamp Yonce, "Zilluminati"
- Contributions:3463
Buyer's Agent, Hell Yeah. Listing agent, not so much. Unless I found one as reasonable as K101's. FSBO, with offer to pay agent with buyer, for me.
My listing agent was great, by the way. If anyone has a need for a realtor in middlesex county MA let me know and I will pass along her info.
- Alan May
- Contributions:4377
>>I had a potential listing agent try to tell us that he would be entitled to 6% if he listed and also found us a seller - by law - due to "automatic dual agency." That was just simply false.<<
ye gods... no wonder we have such a terrible reputation... with leeches like that out in the world.
ye gods... no wonder we have such a terrible reputation... with leeches like that out in the world.
- DONNA M. WHITE, "Donna M. White"
- Contributions:26
I am a certified buyer rep here in New York and I have to put in my two cents. Why would a buyer have a seller's agent show them a house? Doesn't it just make sense to work with someone who is working for you? You, as a buyer, are always paying a commission. If you are buying from a fsbo, is he really giving you a discount or is he trying to keep the commission in his pocket? I think in most instances a decision to become a fsbo is based on the fact that they want to retain as much money from the sale as possible, even though its going to take more work from them. What sense would it make for them to sell the house cheaper and rebate the commission back to the buyer? More work for less money? Lets look at this logically. The buyer is ALWAYS paying the commission, he's the only one with the cash, and he's either paying it to the seller, to a seller's agent or to the buyer's agent. So why not pay for services rendered to YOU, the buyer? I think it only makes sense and if I was looking to buy, I would be looking for a buyer's agent to represent me. What services do they provide? I think the scope of an agent's work is greatly misunderstood...both sellers and buyers agents spend alot of time and do alot of work to sell a house...how much time do you really have to do research on whats for sale, whats been sold, why its been sold (different factors affect selling prices so just looking at a price is not the answer), to physically look around at available properties, to check out websites? If you have time to spare then keep going, but I wouldn't want to spend every weekend of my life looking at houses when I really have no interest in buying more than three quarters (at least) of them. A good buyers agent will do your research, shop around for you, show you what you want to see not just whats for sale, counsel you on a fair and reasonable price to offer based on past and current market data and that can take alot of prep work if you are doing it right
Egads Donna. Another agent that thinks that buyers are inefficient, mindless idiots.
As I just described above, commissions are negotiable. If I am unrepresented and choose to make an offer on a FSBO I will take 3% off the list price out of the box and negotiate from there, since the seller will have to pay out 3% less in doing my deal than one with a represented buyer.
This really only requires grade school math skills........
Good luck to the seller that refuses my offer to try to "keep" the commission for himself. Not in this market....
As I just described above, commissions are negotiable. If I am unrepresented and choose to make an offer on a FSBO I will take 3% off the list price out of the box and negotiate from there, since the seller will have to pay out 3% less in doing my deal than one with a represented buyer.
This really only requires grade school math skills........
Good luck to the seller that refuses my offer to try to "keep" the commission for himself. Not in this market....
Oh look....Cliff deleted his posts. Guess maybe I got through after all.
- Hamp Yonce, "Zilluminati"
- Contributions:3463
In FLA, they don't have the same issues. They can nearly admit the facts, they are working to make a deal happen, to earn a commision. They work for themselves, and try to put like minded buyers and sellers together. Then they get paid when they make a match. Most sensible. I'm generalizing, don't quote me.
- Hamp Yonce, "Zilluminati"
- Contributions:3463
Do feel free to educate me, kindly and gently please!
- Stefanie Willard, "Stefanie Willard"
- Contributions:38
In my area I represent more buyers than sellers. I work on behalf of the buyer, while the listing agent represents the interests of the seller.
I help the buyer in their search for a property based upon their budget, needs, style, preferences, etc. I set them up in my MLS system and email and preview as many properties that fit their profile and give feedback. We or they, go to open houses, and we meet for individual showings. The search sometimes takes months. Once we find a property that they like enough to place an offer, I research the property history, the area comps and seller profile. I give my opinion, and advise. I help them write up the offer based upon our findings and pull together a little presentation package to forward to the listing agent and their seller.
At that point, we start any negotiations with the seller through the selling agent on price and terms. Should we ratified a contract I then become like a "project manager" overseeing the transaction. This includes making sure my client receives all the proper disclosure paperwork, arrange and attend the inspections and sometimes appraisal, follow the loan process, review and consult with title, negotiate credits for property condition or and draw up the contingency releases. There are many steps in this process that can fall though and frequently do, which puts us back to square one. When we finally do close, I get paid from a percentage of the commission as promised and specified in our MLS from the selling proceeds. This is ususally 2.5% and goes first to my broker, who then splits with me. Out of that percentage they deduct insurance, administrative fees, marketing and other misc. My gross before taxes works out to be about 1.25-1.5%. I am then responsible for all the other fees, MLS access, lockbox fees, mandatory association fees etc. I easily put in about 80 hours just during the escrow transaction alone. I love it.
I help the buyer in their search for a property based upon their budget, needs, style, preferences, etc. I set them up in my MLS system and email and preview as many properties that fit their profile and give feedback. We or they, go to open houses, and we meet for individual showings. The search sometimes takes months. Once we find a property that they like enough to place an offer, I research the property history, the area comps and seller profile. I give my opinion, and advise. I help them write up the offer based upon our findings and pull together a little presentation package to forward to the listing agent and their seller.
At that point, we start any negotiations with the seller through the selling agent on price and terms. Should we ratified a contract I then become like a "project manager" overseeing the transaction. This includes making sure my client receives all the proper disclosure paperwork, arrange and attend the inspections and sometimes appraisal, follow the loan process, review and consult with title, negotiate credits for property condition or and draw up the contingency releases. There are many steps in this process that can fall though and frequently do, which puts us back to square one. When we finally do close, I get paid from a percentage of the commission as promised and specified in our MLS from the selling proceeds. This is ususally 2.5% and goes first to my broker, who then splits with me. Out of that percentage they deduct insurance, administrative fees, marketing and other misc. My gross before taxes works out to be about 1.25-1.5%. I am then responsible for all the other fees, MLS access, lockbox fees, mandatory association fees etc. I easily put in about 80 hours just during the escrow transaction alone. I love it.
Hamp, if there is a situation where a buyer's agent is actually contributing toward bringing a willing buyer and a seller together and making the deal happen then they are absolutely entitled to a commission. However, it is misleading - deceitful even - to claim that that buyers' commission will be paid by the seller and is "free" to the buyer.
Sadly, many buyers do pay that extra 3%, unrepresented or not, because they don't understand the mechanics here. I didn't understand them when I bought my first house. It just burns me to hear agents praying on buyers' lack of information/understanding.
Sadly, many buyers do pay that extra 3%, unrepresented or not, because they don't understand the mechanics here. I didn't understand them when I bought my first house. It just burns me to hear agents praying on buyers' lack of information/understanding.
- Kary L. Krismer, "Krismer"
- Contributions:2454
k101 wrote: "Sadly, many buyers do pay that extra 3%, unrepresented or not, because they don't understand the mechanics here. I didn't understand them when I bought my first house. It just burns me to hear agents praying on buyers' lack of information/understanding."
Well first, ethical rules require that a variable commission (lower rate if no buyer agent) be disclosed. That's not something a seller is going to want to do. The better course is the rebate agent, as someone suggested.
Second, if there's going to be a benefit of a lower commission, there's three parties that could get part of it. The seller, the agent and the buyer. The seller and the agent know each other, and have a legal relationship together. I'm not sure why they'd share something with the buyer--a stranger. Also, it does make more work (and more risk) for the listing agent, so a full 3% reduction isn't likely.
That said, it can happen that an agent will cut a commission to put a deal together, but this strategy of going without an agent is just a simplistic scheme that really isn't terribly clever. I've always suspected that it's been something pushed in one of those investment infomercials.
Well first, ethical rules require that a variable commission (lower rate if no buyer agent) be disclosed. That's not something a seller is going to want to do. The better course is the rebate agent, as someone suggested.
Second, if there's going to be a benefit of a lower commission, there's three parties that could get part of it. The seller, the agent and the buyer. The seller and the agent know each other, and have a legal relationship together. I'm not sure why they'd share something with the buyer--a stranger. Also, it does make more work (and more risk) for the listing agent, so a full 3% reduction isn't likely.
That said, it can happen that an agent will cut a commission to put a deal together, but this strategy of going without an agent is just a simplistic scheme that really isn't terribly clever. I've always suspected that it's been something pushed in one of those investment infomercials.
- George Black, "Buyer Advocate"
- Contributions:4
To LinusK,
You bring up some very good points.
CONS—
“SECRET BUYER'S AGENT BONUSES” — any inducement or incentive offered by sellers in excess of a buyer agent’s agreed-upon fee ought to be passed along to his client. Otherwise it becomes a conflict of interest for the agent who presumably has obligated himself to serve his buyer client’s needs before his own.
“ADDITIONAL TRANSACTION COSTS” — most sellers either on their own or through a listing broker offer compensation for an agent bringing a buyer to the transaction. It is true that (as noted by one of the other posters) the buyer is the only one bringing money to the table so in the end she technically pays for her representation. However the settlement statement will normally reveal that the compensation for the buyer’s agent is “charged to” the seller’s revenue.
You could argue that using a buyer’s agent “costs no more” than not using one (for a property represented by a broker) because if the buyer chooses to forego representation, the listing broker will simply keep the portion of the listing commission set aside for the buyer’s agent.
The unrepresented buyer gains nothing financially or otherwise but the listing broker will be happy to pocket the extra cash. The listing broker is not in the position to offer the buyer any meaningful representation—he can only treat the buyer as a customer. His first obligation is to his client, the seller.
“SALES PRESSURE/MISINFORMATION” — see below…
PROS—
“COULD ANSWER QUESTIONS ABOUT THE MARKET” & “COULD PROVIDE COMPS”
A good buyer’s agent ought to do those things and much more.
He should act as his client’s advisor, counselor and advocate during each stage of the buying process: pre-approval, search, evaluation, negotiation and closing. He should be able to produce and help interpret appropriate and unbiased comps and assist his client with offering strategies.
The agent should never cause his client to be faced with the Hobson's
You bring up some very good points.
CONS—
“SECRET BUYER'S AGENT BONUSES” — any inducement or incentive offered by sellers in excess of a buyer agent’s agreed-upon fee ought to be passed along to his client. Otherwise it becomes a conflict of interest for the agent who presumably has obligated himself to serve his buyer client’s needs before his own.
“ADDITIONAL TRANSACTION COSTS” — most sellers either on their own or through a listing broker offer compensation for an agent bringing a buyer to the transaction. It is true that (as noted by one of the other posters) the buyer is the only one bringing money to the table so in the end she technically pays for her representation. However the settlement statement will normally reveal that the compensation for the buyer’s agent is “charged to” the seller’s revenue.
You could argue that using a buyer’s agent “costs no more” than not using one (for a property represented by a broker) because if the buyer chooses to forego representation, the listing broker will simply keep the portion of the listing commission set aside for the buyer’s agent.
The unrepresented buyer gains nothing financially or otherwise but the listing broker will be happy to pocket the extra cash. The listing broker is not in the position to offer the buyer any meaningful representation—he can only treat the buyer as a customer. His first obligation is to his client, the seller.
“SALES PRESSURE/MISINFORMATION” — see below…
PROS—
“COULD ANSWER QUESTIONS ABOUT THE MARKET” & “COULD PROVIDE COMPS”
A good buyer’s agent ought to do those things and much more.
He should act as his client’s advisor, counselor and advocate during each stage of the buying process: pre-approval, search, evaluation, negotiation and closing. He should be able to produce and help interpret appropriate and unbiased comps and assist his client with offering strategies.
The agent should never cause his client to be faced with the Hobson's
- George Black, "Buyer Advocate"
- Contributions:4
(sorry--the last portion of my answwer was dropped off. Here it is...)
The agent should never cause his client to be faced with the Hobson's choice of accepting a lesser degree of representation because of his (or his broker’s) prior obligation to a seller.
Unfortunately buyer agents representing traditional real estate brokers (brokers that represent both sellers and buyers—the vast majority) are subject to fundamental conflicts of interest that tend to manifest themselves midway or later in the purchase process—when the buyer becomes serious about a property.
That is obviously a very inconvenient time to consider changing to a new agent/broker.
In Ohio, the buyer must then choose to accept a reduced level of representation (either “designated agency” or even worse “dual agency”) or seek another agent/broker to represent her. (These options are not available in all states.)
“HOW MUCH OF A DISCOUNT IS REASONABLE, IF A BUYER IS WILLING TO PAY PART OF THE FEE UP FRONT?”
Fees are negotiable. Some brokers will adjust their fees based upon the level of service requested by the client.
I should say that I am an exclusive buyer’s agent (meaning I work for a brokerage that represents only buyers). Our firm neither seeks nor accepts listings—we never represent sellers. I have addressed your questions from that perspective.
The agent should never cause his client to be faced with the Hobson's choice of accepting a lesser degree of representation because of his (or his broker’s) prior obligation to a seller.
Unfortunately buyer agents representing traditional real estate brokers (brokers that represent both sellers and buyers—the vast majority) are subject to fundamental conflicts of interest that tend to manifest themselves midway or later in the purchase process—when the buyer becomes serious about a property.
That is obviously a very inconvenient time to consider changing to a new agent/broker.
In Ohio, the buyer must then choose to accept a reduced level of representation (either “designated agency” or even worse “dual agency”) or seek another agent/broker to represent her. (These options are not available in all states.)
“HOW MUCH OF A DISCOUNT IS REASONABLE, IF A BUYER IS WILLING TO PAY PART OF THE FEE UP FRONT?”
Fees are negotiable. Some brokers will adjust their fees based upon the level of service requested by the client.
I should say that I am an exclusive buyer’s agent (meaning I work for a brokerage that represents only buyers). Our firm neither seeks nor accepts listings—we never represent sellers. I have addressed your questions from that perspective.
Well Kary,
It so happens that I have all day to research the MLS and find listings that might suit me. I know how to dial a telephone and schedule a showing. I own a car that I can drive to the showing. I am not afraid to have the seller's agent open the lockbox for me....I think I can find my way around a house all on my onesie. If I choose to make an offer - I think I can fill out the form myself - actually, I have done that before. I also drafted my own P&S. I think I can figure out how to find a reliable home inspector. Hmmm, what else was there. Oh yeah - financing. Have that covered as well.
So.... why exactly should I be tagged with paying an extra 3% commission? The listing agent is not doing any more work in dealing with me. If the greedy broker and listing agent want to pass up my cash deal by trying to keep those funds to themselves then they are idiots. They would be paying them out to another buyer's agent anyway if they weren't dealing with me.
It is this kind of crap that gives realtors a bad name.
It so happens that I have all day to research the MLS and find listings that might suit me. I know how to dial a telephone and schedule a showing. I own a car that I can drive to the showing. I am not afraid to have the seller's agent open the lockbox for me....I think I can find my way around a house all on my onesie. If I choose to make an offer - I think I can fill out the form myself - actually, I have done that before. I also drafted my own P&S. I think I can figure out how to find a reliable home inspector. Hmmm, what else was there. Oh yeah - financing. Have that covered as well.
So.... why exactly should I be tagged with paying an extra 3% commission? The listing agent is not doing any more work in dealing with me. If the greedy broker and listing agent want to pass up my cash deal by trying to keep those funds to themselves then they are idiots. They would be paying them out to another buyer's agent anyway if they weren't dealing with me.
It is this kind of crap that gives realtors a bad name.
- . . .
- Contributions:3384
When I bought, I selected an agent to help me with the legal process, to make sure all the legal items had the loopholes properly closed, to schedule the visits, to contact the inspector for inspections, to help with interpretation of the inspection report, to make sure sufficient contingencies were in the offer in case it was necessary to back out due to problems, to make sure things were moving forward in a timely manner, to have access to the multiple listings, and to have access to the lockbox for access to see the homes.
I backed out of two offers due to problems found in the inspections. The realtor had to show me close to 40 houses.
Probably the realtor wouldn't have needed to spend so much time if I made it clearer what I wanted; but the realtor was prejudice against certain groups of people and was aware of some hidden "redlining" of areas that I had no idea existed.
I also expected the realtor to help negotiate necessary corrections. I was mistaken here; the realtor was more concerned with closing quickly and had no skills to make sure corrections were done properly.
Fortunately, California requires termite inspection reports to be filed with the state, and correction work to have some warranty. After I moved in, I discovered that the work written in the report wasn't done (as I did my own inspection of the work). It took 13 completion reports before the work was really done, and still two areas were not done properly and I had to redo them myself. Fortunately most of my house is redwood heart. Still this didn't help much with the dryrot areas and the earth contact.
If I was selecting a realtor now, the basis of selection would be entirely different than before. And I would make it clear upfront that I don't want the realtor pre-screening anything for me; I'll screen it myself thank-you. Just tell me what is in my price range within the search radius and give me access to all the data, especially foreclosures.
I backed out of two offers due to problems found in the inspections. The realtor had to show me close to 40 houses.
Probably the realtor wouldn't have needed to spend so much time if I made it clearer what I wanted; but the realtor was prejudice against certain groups of people and was aware of some hidden "redlining" of areas that I had no idea existed.
I also expected the realtor to help negotiate necessary corrections. I was mistaken here; the realtor was more concerned with closing quickly and had no skills to make sure corrections were done properly.
Fortunately, California requires termite inspection reports to be filed with the state, and correction work to have some warranty. After I moved in, I discovered that the work written in the report wasn't done (as I did my own inspection of the work). It took 13 completion reports before the work was really done, and still two areas were not done properly and I had to redo them myself. Fortunately most of my house is redwood heart. Still this didn't help much with the dryrot areas and the earth contact.
If I was selecting a realtor now, the basis of selection would be entirely different than before. And I would make it clear upfront that I don't want the realtor pre-screening anything for me; I'll screen it myself thank-you. Just tell me what is in my price range within the search radius and give me access to all the data, especially foreclosures.
- Hamp Yonce, "Zilluminati"
- Contributions:3463
K101 Did I say the offensive deceitful part? I didn't mean to.
If I find Joe Doe who is looking for a home, and I take him to see Krismers listing, and do the offer, and all the other things a good agent should, am I deserving of half the commision?
I think you might be fired up about what I call "quasi buyers agents" who are just butting in and trying to get paid. Lending Tree type krap. Am I correct?
If I find Joe Doe who is looking for a home, and I take him to see Krismers listing, and do the offer, and all the other things a good agent should, am I deserving of half the commision?
I think you might be fired up about what I call "quasi buyers agents" who are just butting in and trying to get paid. Lending Tree type krap. Am I correct?
- Kary L. Krismer, "Krismer"
- Contributions:2454
K101 wrote: It so happens that I have all day to research the MLS and find listings that might suit me. I know how to dial a telephone and schedule a showing. I own a car that I can drive to the showing. I am not afraid to have the seller's agent open the lockbox for me....I think I can find my way around a house all on my onesie. If I choose to make an offer - I think I can fill out the form myself - actually, I have done that before. I also drafted my own P&S. I think I can figure out how to find a reliable home inspector. Hmmm, what else was there. Oh yeah - financing. Have that covered as well."
Did you miss that I suggested using a rebate agent? That way you'll be certain of getting some discount. The way you're doing it you might get nothing!
K101 wrote: "It is this kind of crap that gives realtors a bad name."
I'd say what you wrote is the type of crap that gives anonymous posters a bad name. You totally missed the point of what I wrote and continue to support your simplistic scheme that might not get you any benefit at all.
Did you miss that I suggested using a rebate agent? That way you'll be certain of getting some discount. The way you're doing it you might get nothing!
K101 wrote: "It is this kind of crap that gives realtors a bad name."
I'd say what you wrote is the type of crap that gives anonymous posters a bad name. You totally missed the point of what I wrote and continue to support your simplistic scheme that might not get you any benefit at all.
No, no Hamp. I was not reacting to you. Some drive-by dufus named Cliff something claimed early in this thread that buyers' brokers' commissions were "free" to the buyer. The fact is that, when there is a buyers' broker involved, the commissions are higher and that gets built into the price that the buyer pays.
I agree that a buyers' broker is entitled to a commission in your scenario.
I agree that a buyers' broker is entitled to a commission in your scenario.
- Kary L. Krismer, "Krismer"
- Contributions:2454
K101, by the way, you might have missed my post in the Seller's forum today, but there I said I'm not an agent that says all sellers need an agent (that no one can do FSBOs). The same is true of buyers. Not everyone needs a full service agent. It's just that the scheme you're promoting might not get you anything.
Why are you calling it a "scheme" Kary? It seems pretty straightforward to me. I think you agents have had it too easy for too long.
Buyer's agent; yea or nay?
additional transaction costs
sales pressure/misinformation
Pro: Could answer questions about the market
Could provide comps
Thoughts?
How much of a discount is reasonable, if a buyer is willing to pay part of the fee up front?
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