Advice

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Bypass the Buyers Agent and Win!!!

Response

07Volvo - I love these discussions...and it's because you don't understand contracts.  The assumption that the agent can cut their commission, while a favorite theory, isn't always true...and isn't always best.  Contracts are with the broker owner, not the agent.  In the case of a listing contract, there isn't written into a contract a commission paid by the seller to a list and buyer's agents.  There is a commission to be paid to the list agent...and then the list agent offers a co-broke to a cooperating agent.  If there is no co-broke, it doesn't mean that there is a commission reduction - the broker owner may not agree to it, so any reduction will come directly from the list agent.  How motivated will that agent be to help out when something goes wrong when you're taking money out of his/her pocket?  The list agent has expenses associated with the sale that a buyer's agent does not - so the commission is generally less with the upside being that additional business is generally generated from the listing itself.You're always free to do as you wish.  Heck, you can repair your own car, do your own dentistry, set your own broken bones, invest your own money.  Does Bill Gates invest his own money, repair his own car, mow his own lawn?  No.  People that understand how business works get it - they know what they know and, more importantly, what they don't know...and when they're not an expert at something, they know enough to hire an expert because it will save them money (and time) in the long run.Successful people get it.Now...this does not in any way, shape, or form belittle your larger point, I believe.  Your larger point (is an agent worth it?) is a valid discussion and one I've brought to my Board of Realtors before...and our board (and the National Association) is our own worst enemy.  Quite frankly, it's too easy to get a license and the dues are too low such that anybody who even considers real estate can get a license.  Take the class, pass the exam, pay the dues.  It's not hard.  A barber must have 1000 hours of class and apprenticeship to get a license.  Real estate - not even close...and we deal with hundreds of thousands (and sometimes millions) of dollars and people that are quick to sue.  As a result, many people, such as yourself, question the need for an agent...and many people question agent ethics, skill, etc.  With higher standards that would go away and the perception would change.  Even within a transaction many attorneys look down on the agents.Until the standards increase, the perception will not change.

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Do I have to make offer through the agent that showed me a property?

Answer

abc1234564,     Great question - and I don't confess to know agency rules in TX.  However, the first question would be whether or not you have a Buyer Agency Agreement in place.  If not, then you're free to move on (and it sounds from the story above that you should if this is the whole story).  If you do have a Buyer Agency agreement in place, I would have a discussion with the agent.  If that is unsatisfactory, then you should speak with the broker owner and he/she can assign another agent to you - one that you choose.     In the end, this is a business transaction and should be treated as such.  If you submitted an offer on a property then it must be presented and either accepted, rejected, or countered.  It's not uncommon for counters to come back verbally...and they definitely would not come back as "if the owners were to make a counter".  That is not a counter and sounds fishy.Best of luck to you in your search,Ryan

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How much money should the deposit be with an offer letter?

Answer

lstjohn331 - Thanks for the question.  There are two stages to an offer in Massachusetts:1. Offer to Purchase - The earnest money deposit, or consideration, is typically between $500 and $1000 to bind the offer.  If the offer is accepted, we go into a "contingency" period.2. Purchase & Sale - This is when the big money goes in.  From a seller's standpoint, you want to see as much money as possible go in at P&S...and from a buyer's standpoint, you want to see as little as possible.The combination of purchase price being offered along with the earnest money deposit is what you should be focused on...along with the dates and any additional terms being offered.  We typically shoot for 5% of the purchase price in at P&S.  For FHA (3.5%) or Mass Housing (3%), I typically want to see the buyer all-in at P&S.  If you're working with an agent, you should go over the terms of the offer and what the terms mean.  If you're selling For Sale By Owner...I guess it's good luck to you.  If you're selling FSBO, you can consult your attorney and most attorneys are not negotiators...they know the law and contracts, not negotiating.Good Luck.Ryan

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I want to fire my real estate agent, how do I do that?

Answer

user9314209 - This happens.  I'd need to know a little bit more about your situation.  If you have never signed a buyer agency contract, then you don't like have any issues with moving on to someone else.  It would be helpful to at least speak with the agent about what you're not happy with.  It could be a very simple fix.If you do have a signed contract, you should still speak with the agent.  In the end, all contracts are with the broker/owner and not the individual agent.  The broker/owner may offer to assign you to another agent or they may simply cancel the contract and allow you to move on.It's not always perfect.  Many buyers and buyer's agent never have a conversation about expectations.  It could just be that the two of you aren't, and never have been, on the same page.Good luck moving forward.Ryan

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Including a bank statement with your offer letter?

Answer

user4173552 - Great question.  Thanks for asking.  I'm in the Boston area and it's probably as competitive as Southern CA right now.  Inventory is WAY down, purchases are WAY up, and it's creating a real dilemma for buyers.  How do you make your offer stand out?  It's not always about the purchase price.  Your broker did the right thing by asking you to provide proof of funds - It doesn't matter how much is in the account (and the account numbers should be blacked out) just that there is enough to cover the funds you say you'll be using.  When a seller is evaluating an offer they should be considering the likelihood of the contract closing - if all offers are very similar it's better to go with the one putting in the most real money (assuming everything else is the same).As an aside, you and your parents should be aware of gifting laws and the tax ramifications.  If you haven't, you should consult a licensed CPA to ensure that neither you nor your parents are going to be hit with any tax "surprises".  There is a limit on monetary gifts before you trip some penalties.Good luck with your purchase.Ryan

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I am a first time home buyer. When should I meet with a real estate agent & loan officer?

Answer

user6721493 - Most agents will probably say that you should see an agent immediately.  I disagree.  Before you see an agent you should see a lending professional.  Be sure to speak with a few of them as they will have access to different lending platforms.  What I like to tell my clients - speak to a regional lender (think TD Bank North), a smaller national lender (like Guaranteed Rate), a mortgage broker (a good one can shop around for the best program for you), and maybe a small local bank (they may be more flexible on the lending guidelines if you have a good Lending Officer).You really want to get an understanding of what you can afford so you know what range you should be looking in.  That would then be a good time to reach out to a real estate professional.  Again, you want to interview the agent to see how qualified he/she is, what type of business he/she has, find out if the agent is in the business full-time, and how the agent is going to help you make a great decision FOR YOU.  Ask for referrals you can call and speak with and have the agent point out the properties he/she helped the person to buy.BTW, if you want a September closing...you're generally looking at approximately 60 days to close from the time you write an offer.  Figure spending 1-2 months looking, so you should probably give yourself 4 months...so you'd start sometime in May.  If you find something earlier, you can always write into an offer your desire for a September closing.Good luck!Ryan

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Want to buy a nice home, will put down 25%, can i negotiate a better price of home?

Answer

user6826900 - this is a great question.  What I will say is "it depends".  There are many things to consider when negotiating a deal outside of price, which is what most buyers don't understand.  Maybe price isn't important to the seller - maybe the seller is more concerned about the date of closing or not having to take care of some item in the house.  If there's only one offer on the table, putting down more money may just mean you're a stronger buyer.  If you're competing against another buyer and you put down more money up front, you may be able to purchase the home for less money than the other party.  This is the fun part about negotiating - trying to craft an offer that compels the seller to act.  To do that, you have to ask the right questions.  Many buyers consider the seller to be the enemy and they prepare to do battle by digging their foxhole (being silent in the home while viewing), throwing grenades (focusing on what's wrong with the home), and charging the hill (writing an offer that's one-sided).  All you'll do is force the seller to dig in their heals!Ask good questions, find out what's most important to the seller, and then craft your offer to make the seller feel like they're winning.  At some point in every transaction each party will need the other to do something and if you've drawn battle lines, good luck if you've stuck it to the seller.One last thing - most people underestimate the value of the word "IF".  It's a tie-in word.  Mr. Seller, I'd be willing to meet your price IF you'll be willing to <something>.  It's a give and take and you need to figure out what you want in return if you have to go up in price.Good Luck!/rc

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Can I cancel a Short Sale Contract, because I found a better home, which is on regular sale?

Answer

Subramaniam - If you hired an attorney to look over the contract, this sounds like a question for your attorney.  I am not a licensed attorney and cannot give legal advice.  When I list a short sale, we have the Buyer sign a 90 day addendum that says they'll stay engaged for 90 days from the signing of Purchase & Sale (P&S).  If the Buyer opts to backout prior to that time, they will forfeit any funds they submitted with the P&S contract.Consult your attorney for legal advice.  If you didn't hire an attorney, then hire one to review the contract for you.  Be sure to qualify whether or not the attorney has a specialty in real estate law.Expect First Class,Ryan

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Signing a buyer's agent representation agreement

Best Answer

jenish1983 - Great question...and surprisingly one that is pretty common.  In all honestly, the paper that the Buyers Representation contract is written on is worth about as much as the paper.  The reality is that if you do sign an agreement, then speak with a builder, you should disclose that you're working with a Realtor(R)...or a licensed agent (not all agents are Realtors(R)).  If you don't and proceed to move forward with the Builder and leave your agent out, not much the agent can do.  The agent could pursue for his/her commission and the truth is that it would probably hurt the agent in the long run.Personally, I'm a realist.  The standard for an agent to be paid is that he/she should be the "procuring cause".  If you met the builder on your own of your own efforts, the agent isn't technically the procuring cause and isn't due any commission.  What I will warn is that builders are very savvy and it can be not in your best interest to walk into an agreement with a builder without at least SOMEBODY being on your team, even if it's a real estate attorney.  If you are working with an agent, get the agent engaged and put him/her to work for you.  Our job, or at least that of a Realtor(R), is to look out for your best interest and assist in the process of buying...according to the National Association of Realtors(R) Code of Ethics.Good luck,/rc

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Do we get rid of a good value accepted offer to wait on a better value pending offer?

Answer

realestate_newbie: Thank you for your question.  This is a classic "bird in the hand is worth two in the bush" scenario.  You have an approval on one and would rather have the other (the townhouse).  You may never get approval on the townhouse, regardless of the fact that it was previously approved at your offer price.  There are no guarantees in negotiating real estate.If you're heart is set on the townhouse, then you should pursue that and live with the consequences.  I'd double check your contract on the condo to ensure you are not penalized for withdrawing your offer.  I'm not a CA Realtor(R), so I don't know the rules out there.  In some states (like MA), the Offer to Purchase is a legally binding document and withdrawing just because you like something else COULD open you to a breach of contract suit.  Check with your attorney on any legal ramifications.Good luck,Ryan

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