Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 11-13-2016, 03:14 PM   #21
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,379
Quote:
Originally Posted by travelover View Post
Seriously, the agent saved you 25%? If so, I'd be happy, too.
Seriously, yes. And that's why I went with this agent. He saved me a bundle on my last house, too, in comparison with how I would have done on my own or with a novice agent. He is a real wizard with local real estate and twice now, he has done a great job for me. Unfortunately, he's almost 80 so I'm going to be up a tree if I ever have to move again. I'll have to start from scratch looking for an agent. Oh well, I don't plan to ever move again so hopefully this will not be a future problem for me.
__________________

__________________
Always be yourself, express yourself, have faith in yourself; do not go out and look for a successful personality and duplicate it.

― B. Lee








W2R is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 11-13-2016, 05:00 PM   #22
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
travelover's Avatar
 
Join Date: Mar 2007
Posts: 9,743
Quote:
Originally Posted by W2R View Post
Seriously, yes. And that's why I went with this agent. He saved me a bundle on my last house, too, in comparison with how I would have done on my own or with a novice agent. He is a real wizard with local real estate and twice now, he has done a great job for me. Unfortunately, he's almost 80 so I'm going to be up a tree if I ever have to move again. I'll have to start from scratch looking for an agent. Oh well, I don't plan to ever move again so hopefully this will not be a future problem for me.
In my neck of the woods, SE Michigan, houses tend to sell at about 2 to 3% below asking price, unless they are poorly priced initially. So 25% would be huge.
__________________

__________________
Yes, I have achieved work / life balance.
travelover is offline   Reply With Quote
Old 11-13-2016, 05:33 PM   #23
Recycles dryer sheets
 
Join Date: Oct 2016
Posts: 122
If you're savvy enough to manage the process yourself (I'm guessing you are, if you're on this forum) then avoid the buyer's agent. As others have said, they are all working in their own best interest (not yours), regardless of what their contract states. And when it comes time to negotiating price, you will get more wiggle room from a seller's agent who is looking at a 6-7% chunk of the pie all to himself, than from an agent who is only looking at half of that.
__________________
Curmudgeon is offline   Reply With Quote
Old 11-13-2016, 07:03 PM   #24
Dryer sheet aficionado
 
Join Date: May 2016
Posts: 49
In California's Silicon Valley the seller's market is so hot that multiple offers are standard. There's no way to save 25% there, since you're just going to be ignored in favor of the other buyers making offers.

The motivation of real estate agent's is getting their commissions. I say commissions, because if you have friends, they want to keep your good opinion and get another client in the deal. But excepting that, they want the deal to close - even if working for the buyers. Just keep in mind the buyer's agent gets paid $0 when you don't buy a house.

You might also look for home inspectors now. Your real estate agent will spot some problems on sight, but a good home inspector will give you the most detailed evaluation of the house. If you don't look for a home inspector, you're more likely to pick whoever your real estate agent recommends - and you might regret that. Because again, a home inspector who spoils too many deals doesn't get repeat business from a real estate agent.
__________________
OverThinkMuch is offline   Reply With Quote
Old 11-13-2016, 07:51 PM   #25
Full time employment: Posting here.
 
Join Date: Nov 2005
Posts: 805
Quote:
Originally Posted by MJ View Post
Commission wise, is it to my advantage to deal only with a listing agent so that there is more price negotiation leverage since the agent isn't sharing the 6% with another agent.
As a buyer, you are negotiating with the seller via the seller's agent. You and the seller will go through the usual bargaining merry-go-round to reach a mutually agreeable price. I think that it would be bad form during the negotiation phase for the buyer to demand a discount because there's no buyer's agent involved. Instead, if you and the seller reach an impasse during price negotiation, the agent may volunteer to throw in a few thousand (essentially cutting the commission) so the deal goes through. This is what happened on my house purchase last year. It never even occurred to me to ask the seller's agent to cut his commission, and I was surprised when he did.

Quote:
Originally Posted by MJ View Post
If I use the buyer's agent are they really on my side in getting the best price since a lower price will get them a lower commission.
No - follow the money. The so-called buyer's agent is paid by the seller.

Quote:
Originally Posted by MJ View Post
Is it to my advantage to use the listing agent to eliminate delays in getting answers to questions from the seller rather than through the buyer agent.
I was very pleased with how efficient the price negotiation was without a buyer's agent in the communication chain. Buyer-Listing Agent-Seller is more efficient than Buyer-Buyer's Agent-Seller's Agent-Seller.

Note: I did hire a real estate attorney who specializes in closings to handle the paperwork and money. The seller's agent offered to have his company do this, but I wasn't comfortable with that arrangement.

Note: I also purchased a couple of books on buying residential real estate from amazon.com, and was glad I did. Like you, I hadn't bought a house in quite some time, and needed a refresher. The electronic document signing we used to close the deal was very fast and efficient compared to the old-fashioned method of sending paperwork around.

Good luck!
__________________
socca is offline   Reply With Quote
Old 11-13-2016, 08:37 PM   #26
Recycles dryer sheets
 
Join Date: May 2013
Location: Sarasota
Posts: 90
I just bought a house and went thru this exact issue. DW and I debated using an agent or not. We decided to go it alone. We did all the research ourselves on Zillow, Realtor.com etc. We called the listing agents in all cases to see the homes we were interested in. We found the perfect home and learned a lot from all the listing agents in the process. When it came time to make the offer, I told the listing agent that we had done all the leg work on our side and expected her to help by reducing her commission to the sellers to make our offer more appealing. She reduced her commission from 6 to 5 % and when we were still slightly apart on price she kicked in another $3750 as a rebate to me at the close to close the deal. However, this only works, if you are very hands on and understand the market in which you are buying. Good luck. I think it is also important to understand that in a tight market, as a buyer working directly with the listing agent you have the upper hand if there are competing offers as the listing agent will go to bat for you. They want that double commission.
__________________
LiveBelowMeans is offline   Reply With Quote
Old 11-13-2016, 08:59 PM   #27
Thinks s/he gets paid by the post
 
Join Date: Mar 2004
Posts: 2,077
I believe that in my area, because it is a buyer's market, when I make an offer that is much lower than the asking price, I don't really care where the price difference will come from, seller, agent or both.
__________________
I look to the present moment because that's where I live my life.
MJ is offline   Reply With Quote
Old 11-14-2016, 07:39 AM   #28
Confused about dryer sheets
 
Join Date: Oct 2014
Posts: 8
I am a part time real estate agent, mainly got the license because I do real estate investments. I agree a 100% that you need to do some research to find a good agent and also ur own research to learn about the Neighborhood that you will be buying in!!! Agents were created to protect buyers mostly so there are people there to help prevent fraud and discrimination of sorts. And yes, most people depends on this trade as their means of living. If you want to save money on buying houses, look into sweat equity more than savings on commission. Buy a house that needs work so you are in better position to negotiate a deal. And do ask your agent for a refund when possible. However, juts know that experience sellers don't like dual agency.
__________________
AJ520 is offline   Reply With Quote
Seller/Listing agent vs Buyer agent
Old 11-14-2016, 07:44 AM   #29
Confused about dryer sheets
 
Join Date: Oct 2014
Posts: 8
Seller/Listing agent vs Buyer agent

Plus, it is illegal for the sellers agent to hide better offers from the seller over yours, just because the sellers agent want the 5-6% commission. The sellers agent is by law requires to present all offers to seller. Do not get yourself an agent that will be sue for breaking the law because you will be on the hook too!
__________________
AJ520 is offline   Reply With Quote
Old 11-14-2016, 08:18 AM   #30
Recycles dryer sheets
 
Join Date: May 2011
Location: Twin Cities
Posts: 433
I've been a Realtor for 7+ years. Lots of interesting information in this thread.

First off, the prevailing assumption seems to be that we are all unethical and only represent our own interests. I've seen that a couple times but in the vast majority of transactions I've been involved in (100+) this is not the case at all. Do you assume that accountants and lawyers are only representing their own interests? Realtors are subject to the same fiduciary duties & laws as those professions.

"Even if you get your own agent, I think you'll find he's actually working for the seller."

A buyer who has signed a Buyer Representation Agreement has hired a broker/agent who is bound to only represent their interests - not the sellers.

"IMO realtors are a waste of money for anyone local to the sale who has access to the internet and reasonable intelligence"

If you live in a market where there are lots of For Sale by Owner homes go for it. If the house is listed on MLS the compensation to the listing agent has already been determined so there's no reason to not engage an agent. Certainly, the model for whether people should list their homes with agents can be debated as can the compensation model.

"I have used the seller agent to buy a place, and the only advantage to me as a buyer was the agent made double sure to make the sale"

That's not how it's supposed to work (your experience may differ). If an agent is in a dual agency situation they can't negotiate on behalf of either party. In practice that means I present offers to each party and can't provide any other guidance. That's literally how it works. This is why I think having a Buyer's Agent is better as they can actively negotiate on your behalf.

Now you could try to negotiate with the listing agent if they get both sides for a rebate or reduction in commission. You'll have to decide if the negotiation on their commission is worth the full representation and negotiation you'd get if you weren't in dual agency.

"their allegiance is to the seller and they would have a duty to report what you said to the seller."

No - this would be immediate grounds for a lawsuit or, if reported to NAR, a fine or loss of license.

"Now with the internet, sites like Zillow, Realtor.com, Trulia ....not much real value is delivered for the price, IMHO"

First off, I agree that commissions are too high. I normally charge just 4.7%. That said, the statement above is what I find funny.

Without Realtors there's no MLS, no Zillow, no uniform database of real estate values & transactions to base sales prices on. MLS is paid for by Realtors in the form of quarterly fees. It is also policed by Realtors to provide strict rules on providing accurate sales & home details. Zillow (and the others) get all of their data feeds from MLS's and then makes all of their money by selling back buyer leads to these same Realtors. With no Realtors Zillow has no data and no revenue.

It does sound like some have had bad experiences. I do agree with those who have said to do your due diligence and meet with multiple agents. It's interesting to me that so few do that. When we do a large home remodel we always meet with multiple contractors and ask for references. Can't recall anyone asking for references, even for those that don't know me ahead of time.
__________________
Fishingmn is offline   Reply With Quote
Old 11-14-2016, 09:02 AM   #31
Thinks s/he gets paid by the post
zinger1457's Avatar
 
Join Date: Jul 2007
Posts: 1,411
Quote:
Originally Posted by Fishingmn View Post
Without Realtors there's no MLS, no Zillow, no uniform database of real estate values & transactions to base sales prices on. MLS is paid for by Realtors in the form of quarterly fees. It is also policed by Realtors to provide strict rules on providing accurate sales & home details. Zillow (and the others) get all of their data feeds from MLS's and then makes all of their money by selling back buyer leads to these same Realtors. With no Realtors Zillow has no data and no revenue.
That is really the problem, the realtors have too much control over the current house buying/selling system. Don't believe the major issue is realtors being unethical, it's that many of us that have been through the process don't see the value in the fees that we paid. Unfortunately there are few good alternatives available and I'm sure realtors are doing their best to see it stays that way.
__________________
zinger1457 is offline   Reply With Quote
Old 11-14-2016, 09:12 AM   #32
Thinks s/he gets paid by the post
photoguy's Avatar
 
Join Date: Jun 2010
Posts: 2,297
I'm not as experienced home buyer/seller as many on this forum, but I just bought a home (with agent) and here is what I see as the advantages/disadvantages:

Advantages:
1. Guides you through the process
2. Handles paperwork (although maybe you could argue the title company does most of this)
3. Can you have useful local knowledge not available in MLS listing or other online source
4. Makes it easier to actually see the property physically in a timely fashion
5. May be able to find listings before they hit MLS
6. May be good at teasing out information from the other side for negotiation (conversely they may leak information about you)

Disadvantages:

1. Even though an agent may be legally bound to act in a fiduciary manner, in practice this isn't always the case. This is a well studied problem, that the incentives of the principal and agent don't align. The danger is that an agent may encourage you to take a deal now instead of holding out for something better. Even if you are aware of this, it can be difficult to counter act. Do a search for "freakonomics real estate" to find out more. I think cases of outright malpractice (e.g. failing to inform buyer about a material fact like a condo special assessment) are rare (but I don't have any stats on this).

2. The agent adds transactions costs. To some extent these are unavoidable due to the fact that the vast majority of sellers list on MLS. But there may be opportunity to reduce this as per travelover or going with a discount agent that gives a rebate on fees

3. Expanding on point 2, in particular a buyer's agent makes it more expensive to buy FSBO houses which are beoming more common
__________________
photoguy is offline   Reply With Quote
Old 11-14-2016, 11:37 AM   #33
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
travelover's Avatar
 
Join Date: Mar 2007
Posts: 9,743
Quote:
Originally Posted by zinger1457 View Post
That is really the problem, the realtors have too much control over the current house buying/selling system. Don't believe the major issue is realtors being unethical, it's that many of us that have been through the process don't see the value in the fees that we paid. Unfortunately there are few good alternatives available and I'm sure realtors are doing their best to see it stays that way.
Well said. I really object to the commission being a percentage of the sale price. The work involved in selling a $400,000 house is not twice the work to sell a $200,000 house and when you get into the million dollar plus range, it is totally ridiculous, especially in a hot market.
__________________
Yes, I have achieved work / life balance.
travelover is offline   Reply With Quote
Old 11-14-2016, 12:50 PM   #34
Full time employment: Posting here.
exnavynuke's Avatar
 
Join Date: Sep 2016
Location: Acworth
Posts: 831
Quote:
Originally Posted by Fishingmn View Post

"IMO realtors are a waste of money for anyone local to the sale who has access to the internet and reasonable intelligence"

If you live in a market where there are lots of For Sale by Owner homes go for it. If the house is listed on MLS the compensation to the listing agent has already been determined so there's no reason to not engage an agent. Certainly, the model for whether people should list their homes with agents can be debated as can the compensation model.
Compensation can be negotiated even after they signed the original agreement (I've known of realtors willing to reduce their commission percentage when presented with a buyer who was representing themselves). Also, more and more agents and other services are listing homes on the MLS for nominal fees and/or providing realtor services for flat fees that are typically much less than the % charges traditional realtors use. In any of those situations, avoiding a buyer's agent (assuming the buyer can negotiate on their own behalf intelligently) can save significant money.

Quote:
Originally Posted by Fishingmn View Post
"Now with the internet, sites like Zillow, Realtor.com, Trulia ....not much real value is delivered for the price, IMHO"

First off, I agree that commissions are too high. I normally charge just 4.7%. That said, the statement above is what I find funny.

Without Realtors there's no MLS, no Zillow, no uniform database of real estate values & transactions to base sales prices on. MLS is paid for by Realtors in the form of quarterly fees. It is also policed by Realtors to provide strict rules on providing accurate sales & home details. Zillow (and the others) get all of their data feeds from MLS's and then makes all of their money by selling back buyer leads to these same Realtors. With no Realtors Zillow has no data and no revenue.

It does sound like some have had bad experiences. I do agree with those who have said to do your due diligence and meet with multiple agents. It's interesting to me that so few do that. When we do a large home remodel we always meet with multiple contractors and ask for references. Can't recall anyone asking for references, even for those that don't know me ahead of time.
I have no problems with realtors in general and believe the stuff mentioned here is worth engaging a realtor. I just don't believe that the pricing structure traditional realtors use is one that people should accept. The person who looks at 4 houses and ends up buying/selling a $500,000 house didn't get "more" or "better" work from their realtor than the person who did the exact same thing while buying/selling a $200,000 house, but they'll pay 2.5 times as much money for that work. That seems like a huge waste of money to many people (myself included).

As far as I'm concerned, the only reason it's accepted (i.e. people are willing to hire them with that pricing structure) is that years back the internet didn't exist and people couldn't do it without them (with any ease anyway) and so that's been the norm so long that people are only slowly pushing back. The rise of the "MLS listing" and "flat fee" realtors is a response to the unwillingness of people to pay more than others for the same thing imo. I think we're maybe 10-15 years away from that pricing structure being completely replaced with "package costs" that change cost only based on additional services (more pictures, more signs, more open houses etc for selling or more negotiations and more showings etc for buying). I hope I'm right, but I could be wrong.
__________________
exnavynuke is online now   Reply With Quote
Old 11-14-2016, 01:05 PM   #35
Recycles dryer sheets
 
Join Date: May 2011
Location: Twin Cities
Posts: 433
Quote:
Originally Posted by exnavynuke View Post
I just don't believe that the pricing structure traditional realtors use is one that people should accept. The person who looks at 4 houses and ends up buying/selling a $500,000 house didn't get "more" or "better" work from their realtor than the person who did the exact same thing while buying/selling a $200,000 house, but they'll pay 2.5 times as much money for that work. That seems like a huge waste of money to many people (myself included).
So you want to move to an hourly model then. Do you think many buyer's would be willing to spend $100-150/hour whether they purchase a home or not? How will that affect entry level home buyer's since I assume you charge the same to all buyer's? Won't that have the affect of having people look at fewer homes and overpaying in an effort to reduce the time required to find a home?

I've had buyer's look at 3 homes and I've had buyer's look at 85 homes. Under the current model they both seemed happy - guessing that the satisfaction of the 2nd client would be impacted when they got my bill. How upset would entry level buyer's be when they lose out on a multiple offer situation. Start all over from scratch with nothing but a $500 invoice?

Here's an actual real estate broker charging an hourly fee which is where I got the numbers from - HOURLY FEE OPTIONS | Real Estate Cafe
__________________
Fishingmn is offline   Reply With Quote
Old 11-14-2016, 01:24 PM   #36
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
travelover's Avatar
 
Join Date: Mar 2007
Posts: 9,743
Quote:
Originally Posted by exnavynuke View Post
Compensation can be negotiated even after they signed the original agreement (I've known of realtors willing to reduce their commission percentage when presented with a buyer who was representing themselves). Also, more and more agents and other services are listing homes on the MLS for nominal fees and/or providing realtor services for flat fees that are typically much less than the % charges traditional realtors use. In any of those situations, avoiding a buyer's agent (assuming the buyer can negotiate on their own behalf intelligently) can save significant money.



I have no problems with realtors in general and believe the stuff mentioned here is worth engaging a realtor. I just don't believe that the pricing structure traditional realtors use is one that people should accept. The person who looks at 4 houses and ends up buying/selling a $500,000 house didn't get "more" or "better" work from their realtor than the person who did the exact same thing while buying/selling a $200,000 house, but they'll pay 2.5 times as much money for that work. That seems like a huge waste of money to many people (myself included).

As far as I'm concerned, the only reason it's accepted (i.e. people are willing to hire them with that pricing structure) is that years back the internet didn't exist and people couldn't do it without them (with any ease anyway) and so that's been the norm so long that people are only slowly pushing back. The rise of the "MLS listing" and "flat fee" realtors is a response to the unwillingness of people to pay more than others for the same thing imo. I think we're maybe 10-15 years away from that pricing structure being completely replaced with "package costs" that change cost only based on additional services (more pictures, more signs, more open houses etc for selling or more negotiations and more showings etc for buying). I hope I'm right, but I could be wrong.
I totally agree. It is only a matter of time before the efficiency of the internet displaces the flat % based compensation of real estate agents. I think it will start on the seller's side as they are the most directly impacted by the current fee structure, though of course, the buyer shares it, too, as it is baked in to every sale. It all comes down to value and on an hourly basis, real estate agents just don't provide value for their fees on moderate to expensive homes.
__________________
Yes, I have achieved work / life balance.
travelover is offline   Reply With Quote
Old 11-14-2016, 02:38 PM   #37
Full time employment: Posting here.
 
Join Date: Nov 2005
Posts: 805
As I've mentioned on this board before, I was handed a Buyer Representation Agreement in Denver and found it ridiculously restrictive. Be careful - read the fine print!!
__________________
socca is offline   Reply With Quote
Old 11-14-2016, 03:34 PM   #38
Recycles dryer sheets
 
Join Date: Jun 2014
Posts: 459
When I'm buying I know I prefer an agent, but I have one I trust. Yes, they get a portion fo the proceeds, but I've yet to see one where you got any less really by NOT having an agent unless you both don't have an agent (ie for sale by owner).

Personally, I like someone following up and doing all the work with the paperwork, sending me info for utilities, who I need to contact, what unique stupid fees/taxes/forms I need to fill out, chase the HOA which won't want to provide you the details you want, etc. My agents have always taken care of absolutely everything and since I was usually working and had a million things at work and well packing to do, an extra hand is useful. Here in NC, they also try to close in 2-3 weeks, they say they can even close in 7 days if you use their people (which I don't). So that's a short time to figure it all out and make sure you don't miss anything. It's not like this is something I do every day.

Though it does depend immensely on the state, in some states the agents do most of the work, in other states, it's the lawyers so it's not a simple one situation fits all. For one thing, I had NO idea what the heck a due diligence fee was and had I made an offer on my own, I would have skipped it and lost the house... as everyone does it here, it's money that ensures they can safely take it off the market and has different rules than escrow money.
__________________
karen1972 is offline   Reply With Quote
Old 11-14-2016, 03:47 PM   #39
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
travelover's Avatar
 
Join Date: Mar 2007
Posts: 9,743
Quote:
Originally Posted by karen1972 View Post
............Personally, I like someone following up and doing all the work with the paperwork, sending me info for utilities, who I need to contact, what unique stupid fees/taxes/forms I need to fill out, chase the HOA which won't want to provide you the details you want, etc. .........
That's fine. Some people like to have a financial advisor take care of every detail, too, and they just gladly pay the cost. I'm not one of them. We all get to choose and I appreciate a forum like this where we can explore all the options and choose what is best for us, personally.
__________________
Yes, I have achieved work / life balance.
travelover is offline   Reply With Quote
Old 11-14-2016, 07:36 PM   #40
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 15,691
Quote:
Originally Posted by Fishingmn View Post
....A buyer who has signed a Buyer Representation Agreement has hired a broker/agent who is bound to only represent their interests - not the sellers. .....

"their allegiance is to the seller and they would have a duty to report what you said to the seller."

No - this would be immediate grounds for a lawsuit or, if reported to NAR, a fine or loss of license. ....
I stand corrected.... that is very different from when I took the real estate exam over 40 years ago... back then, all agents' allegiance was to the seller/client.
__________________

__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
pb4uski is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Sell a batch direct to an ebay seller? ERD50 Other topics 12 03-16-2016 12:20 PM
Seller financing of my investment property. jetpack FIRE and Money 5 08-21-2014 12:12 PM
Seller financing? jIMOh Other topics 4 05-06-2012 01:21 PM
Trying to Understand Seller's Financing (for a house) wilkens21 FIRE and Money 8 06-20-2009 05:36 AM
Durn funny ebay listing cute fuzzy bunny Other topics 5 03-30-2004 09:02 AM

 

 
All times are GMT -6. The time now is 04:52 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.