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Old 09-13-2008, 09:40 AM
Location: Just south of Denver since 1989
10,911 posts, read 29,400,922 times
Reputation: 7144


Colorado is fairly lenient in having brokers share commissions with principles to the transaction.

In Colorado, we are all licensed as brokers.

No such animal as a Licensed Realtor, a Realtor must have a salesman's or broker's license from their state in order to join the local/state/national association and be a member.

In the Denver area MLS - we do not usually put the loan amount currently in place. It is irrelevant compared to fair market value.

Last edited by 2bindenver; 09-13-2008 at 09:42 AM.. Reason: added
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Old 09-14-2008, 01:57 AM
15 posts, read 57,628 times
Reputation: 24
Default We didn't use a buyer's agent

I just went through the process of purchasing a home on my own without a buyer's agent.
As you can see, this is a long post, but this is step by step how we did it without a buyer's agent:
I called the listing agent to open the house for me.
Then we checked out the sales price by looking at the recent sales available online on the county assessor's website (they were only about a month behind). My husband put together a spreadsheet or recent sales and what they had originally sold for, all available online. So it sounds like the original poster educated him/herself about the property as we did.
Anyway, so we came up with a number and went to State of Colorado-Department of Regulatory Agencies - Division of Real Estate
It has all the docs needed to put together a contract. We presented it to the listing agent at a lower price explaining that since we weren't being represented by an agent, we reduced our offer by the 2.8% that would have gone to a buyer's agent.
She came back and explained that the commission agreement is between her and the seller. So whether or not we had an agent didn't matter, because she had an agreement with the seller on how much they would pay her if the buyer didn't have representation.
I asked what extra work she would have to do, and she really didn't have an answer for me.
Anyway, we stood firm in negotiating the number. Plus we proved that we were strong buyers. But it still ended up being significantly less than the list price, and I believe that with representation, we wouldn't have had that negotiating power if the seller had to pay out that 2.8% to a buyer's agent.
We did all the "work" ourselves. I don't consider it extra legwork because it's all stuff that I'd want to be involved in anyway in such a large investment.
I would never buy a house without a professional home inspection. My husband is extremely handy, and even works in the construction business, but I wouldn't trust him to inspect the house that we're so excited about, that we're willing to buy. You need someone who has no emotional attachment that wouldn't be blind to any issues. Plus when you turn in the Notice to Correct, the seller would be more at ease with a professional home inspection than what you came up with on your own.
Also, the appraisal company just contacted the listing agent to schedule the appraisal, the agent doesn't have to be around for that. Someone, and usually the seller himself wants to be around for the appraiser anyway, just opens the door for the appraiser.
Our appraisal came back higher than the sales price, which is very unsual in this market. Most banks are having trouble with low appraisals these days. We thoroughly reviewed the appraisal. It would be obvious if something was off.
Once the offer is accepted and the contract is ratified, the title company handles the legal end and money till closing.
As long as you stay on top of getting the title company the info they need: the signed contract, your lender and personal info, and you get your lender everything they need: loan conditions, contract, etc., then you'll be fine. The buyer's agent is just a middle man who asks you for all that stuff and passes it along. It's probably easier for all parties if they could get what they needed directly from the source, and didn't have to deal with the middle man.
The title company will get you the settlement statement as soon as the lender get them what they need. That's why you need a legit lender so you can review all the numbers well in advance of closing.
Then you close and what I thought was weird in CO is that it's customary for sellers to stay in possession of the property a few days after closing. Anyway, final walk throughs before and after closing. And you're done.
I didn't see why I needed a buyers agent to do any of that.
If you're familiar with the real estate process and you've educated yourself about the property, I really don't see a need for a buyer's agent.
Our transaction was very smooth. We just made sure to stay on top of everything and read absolutely everything you put your signature on. Just stay on top of your deadlines. All the paperwork from the contract to the Notice to Correct after the inspection, to the addenda to change or amend the contract are all online.
But if you're not sure you can handle this simple process, then get a buyer's agent.
I believe that since we didn't hire an agent, we had a huge negotiating tool on the sales price. This is a buyer's market, and that's an extra edge.
In our transaction, I noticed on the HUD-1 that the listing agent still ended up with 4%. So maybe she told the sellers she needed extra commission since we weren't represented. Whatever, she did nothing extra. I made sure that I found my own home inspector, turned in all paperwork by or before the deadlines. So whatever, she got paid what she got paid, but at the end of the day we still got a screaming deal on the house, so I guess everyone was happy. But all this was done without a buyer's agent.
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Old 09-14-2008, 12:59 PM
1,370 posts, read 1,991,695 times
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Not sure about the rules in Colorado but I'd look into the following:

I would suggest you look online for a discount brokerage - we used one and it saved us thousands of dollars. The rebated commission was offset against our closing costs and reflected on our closing statement.

We did all the legwork ourselves - viewed at open houses and directly with the listing agent.

We were constantly pressured to sign up with these agents (of course - they'd earn 6-7% commission!!!!!!!!) but resisted and found a great discount broker in a neighbouring town. He did a great job for us and charged us hardly anything.

We basically only wanted someone to deal with the paperwork for us - as such we felt that our broker did a great job and was remunerated appropriately for the work he did.
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Old 09-22-2008, 09:52 AM
9 posts, read 25,070 times
Reputation: 10
This is a very interesting conversation as a North Carolina Broker considering a move to the Denver metro area and obtaining my license in Colorado.

We do have dual agency here so the arguement of working for both sides of the commission (ie our salaries ) is completely justified. Before I decided to get into real estate I too didn't quite understand the value of a buyers agent. Even with a bachelors and a masters degree, because I had only bought and sold a house 1x, and nothing overly dramatic happened, it seemed like it wasn't rocket science, as one person put it.
However, with the economic climate of today and credit tighter than ever, our jobs are more relavant and important than ever. Buyers and sellers in this market run the risk of losing equity or overpaying for their home, they are not on top of what the market is doing (and believe me, it's changing what seems like daily, at least here!).

I find it unfortunate that there are still those out there who have had a less than ideal experience with a buyers agent and thus feel it unncessary to include one in the transaction of a huge investment, one's house.

I actually got into real estate as a result of mistakes I had seen others make and even made myself that I didn't want to see others make.

I only hope that more people will do their part and interview agents just as they would their financial advisor or doctor to see what knowledge, experience and value that person can bring to the home buying process. It's not always what we literally "DO" that is as crutial but many times the steps we take to avoid roadblocks that may literally 'blow up' the deal that is the value we bring to the table.

Ok, I'll get off my realtor soap box now
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Old 09-24-2008, 02:23 PM
Location: Just south of Denver since 1989
10,911 posts, read 29,400,922 times
Reputation: 7144
Originally Posted by Walter Jimenez View Post
If you contact the listing agent, the listing agent becomes a transaction broker.
Not true.

Originally Posted by Walter Jimenez View Post
They are usually open to reducing their commission to 5 %.
Again, not True.

Originally Posted by Walter Jimenez View Post
That's not your problem anyway.
Who's problem would it be?

Last edited by 2bindenver; 09-24-2008 at 02:38 PM..
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