Zillow Advice: Buying Process - Foregoing a buyers agent

The listing agent will consider ...

Thu, 09 Apr 2009 19:38:00 GMT

The listing agent will consider that an in-house sale.  That is her windfall, not yours.    She has has contract that says she gets that money.

Finding the house is only an aspect of what a buyer agent does for their client. The homes are all over the web.   Protecting the buyers interests ....in many ways not so obvious.... is a larger role.    Even if the listing agent conceeds a half point to the seller (theoretically reducing the price slightly), chances are greater you will end up giving the difference to the seller or the listing agent in the negotiation, or loose something else...something more...becuase you do not have representation.

So many times I have had buyers come to me thinking they "found the house" and the work was done.   Sometimes I discovered aspects that cause them to seriously rethink the house.   Sometimes I can negotiate a price that is better than what they could have.   Sometimes when I make sure they have considered all other options...they end up with a different house. There is little to be gained, and much to be lost by attempting to wear all the hats. Very valuable to have an impartial advocate on your side.    We are dealing with large numbers, so a small benefit to you...derived because you were represented well...can make a large difference.

I work with sometimes very very savvy buyers who purchase monumental homes.    They know they can benefit from help, just like the savvy buyers purchasing starter homes.

Best, John Herman
TheBuyersRepresentative.com    Exclusive Buyer Agents

Would you go to a dog groomer ...

Thu, 09 Apr 2009 19:18:00 GMT

Would you go to a dog groomer to get your hair cut? You are making one of the biggest purchases of your life. It is highly recommended to to find an agent to represent your best interests, one that specializes in the area you are looking in, and one that you personally feel comfortable with. There are plenty of bad agents out there, be sure to find one of the qualified ones. A good agent can save you tons of money now, and insure your profits, when it's time to sell. A good agent will more than pay for the services rendered. A good agent can offer many different negotiating strategies, and also help you jump through the many, many hoops that are required in today's market. Interest rates are historically low, prices are excellent, but getting the deals to actually close is the toughest I have seen in the 15 years I have been a REALTOR. With or without an agent, expect setbacks, headaches, and delays. Really, find a pro to work with.

Better question: In ...

Thu, 09 Apr 2009 17:58:00 GMT

Better question: In the location/neighborhood you are buying, what is the list to contract price %?

If the house is listed for 100k and you get a 3% reduction without an agent, that's 97k or 97% to list price. What if the neighborhood is selling at 90% to list price? Your 3k savings could have been 10k and included a Buyers Agent representing your best interest.

Just some additional thoughts to consider.

Jacksonville Real Estate Agent

I have not had the same experience, ...

Wed, 01 Apr 2009 12:23:00 GMT

I have not had the same experience, Doobie. When I want to see a house, I look up the phone number and name of the listing agent. Then, I call and ask for that person, specifically, and tell them I am interested in seeing the house. They give me a day and time, confirm it with their seller, and then meet me at the house. Usually, the listing agent does not get into details about commission, etc. during that phone call. If they try to, I just confirm that I am unrepresented, and leave it at that. I wait to broach the subject of commissions until I have seen the property and have an interest in possibly placing an offer.

However, during the showing, the listing agent inevitably asks about my representation. Sometimes, they share that they will "work with me" since I do not have another agent in tow (aka - they will reduce their commission). Other times, they want me to sign off on dual representation (aka - they want to keep all 6% for themselves). Almost always, they want to try to tell me about other listings (aka - they want to act as my buyers agent concerning another property). I am always quite clear that I am capable of doing my own research and am not interested in buyers' agency.

You can do or ask anything ...

Wed, 01 Apr 2009 12:22:00 GMT

You can do or ask anything you want. You may or may not get the house, but do what you want. I might suggest the following.

Call an agent, offer them $100 to show you the house with a written offer to pay them $1000 if you buy. Let them know that you are reducing your offer or asking for seller closing contributions in lieu of the buyer side commission. The agent gets the $100 no matter what and the $1000 if you buy. For 5 hours of work that's $200/hour. Pretty good jack if you ask me. Of course that would require, watch for it, the buyer making an initial investment, thereby eliminating the risk/reward argument. I'd do it.

so, if a person sees some ...

Wed, 01 Apr 2009 11:31:00 GMT

so, if a person sees some thing on mls they want to look at, how can you get in?. if you call the listing agent, the first question is "are you represented by a buyer agent?'
yes?"i can't talk to you" if i say no, but i want to keep 3% they don't want to take there time to show the house.

Yes - you can make your offer ...

Wed, 01 Apr 2009 11:02:00 GMT

Yes - you can make your offer 2-3% lower than "otherwise" and tell the listing agent that your offer takes into consideration the fact that you are unrepresented.

It is possible that the seller's contract with the listing agent provides for a lower commission (like 4%) if the buyer is unrepresented - but, typically, the contract is written such that the listing agent will get all 6% (or whatever). So, unfortunately, in most cases you have to hope that the listing agent will tell their seller that they will voluntarily reduce their commission, or that the seller will be savvy enough to know to request a commission reduction (but, technically, the agent doesn't have to reduce at all).

If you found a particular house you are serious about on your own, going with a reduced-capacity buyers' agent (you can ask any agent to represent you at a reduced rate, say 1.5% with a refund to you of the other half of the total 3% buyers' side commission, for limited assistance with one particular house purchase) is the best way to ensure that you will receive a discount in commissions.

Writing the foregoing reinforces my disdain regarding the way that commissions are handled under the NAR system. There should be a more straightforward mechanism for the unrepresented buyer to obtain access to those buy-side commission dollars.

Most sellers when doing a ...

Wed, 01 Apr 2009 02:00:00 GMT

Most sellers when doing a FSBO are already figuring a commision exclusion.

Foregoing a buyer's agent ...

Wed, 01 Apr 2009 01:42:00 GMT

Foregoing a buyer's agent is a big mistake.

I think the seller would ...

Wed, 01 Apr 2009 01:25:00 GMT

I think the seller would be more flexible with a buyer who does not use an agent who charges 2.5 - 3.0%. I believe the seller takes this into consideration.