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This NJ based realtor (Realmart realty)offers a 2% buyers rebate. Any thoughts on the credibility & risks of using this service? Want to make sure this is a legitimate service.
I understand that I wont get the full suite of services.
Not only won't you get the full suite of services, you will basically not be able to see any house unless it is having an open house. If they have to show you the house, the rebate drops to 1%. Most listings do not have open houses, and those that do frequently only have 1 - at the beginning of the listing. You also lose all advocacy and without advocacy there is no point in having an agent at all. Contrary to what you think, you are not an expert at pricing, you can't judge condition or locational issues objectively, you will not have seen the interiors of the closed sales, and you will be operating without knowledge but with lots of emotion. And your "buyers agent" will not be able to negotiate home inspection issues or other difficulties, they will make the phone calls and hope you just give up quickly on the important and contentious issues.
Also, since the average co-broke is 2.5%, your rebate at best is 1.5% assuming you get lucky and find an open house you want to buy. Again, if they have to make an appointment to show you the house, the rebate drops.
Of course, since most open houses, if they are held at all, are held at the beginning of the listing period, and most sellers negotiate very little during the first weeks of a listing, you are limiting your universe of homes only to those where you are likely to overpay, erasing the value of your rebate. New listings have more buyers competing for them and you will find yourself outbid more often. And when you don't, the seller is not coming off his list price very much at all at the time he is doing open houses.
Compare that with a home that has been on the market for 3 months and the seller is getting more motivated to make a good deal. But you won't be able to go after that one, because there are no more open houses and if you need an appointment, your rebate gets slashed. And your agent will have no knowledge of recent closed sales - as he doesn't show them or see them. He might give you a list, but you can't and won't know what to do with it since you don't know about interior condition, features, maintenance, or seller motivation.
You better do your research carefully before you waste $15,000 to save $3,000.
Not only won't you get the full suite of services, you will basically not be able to see any house unless it is having an open house. If they have to show you the house, the rebate drops to 1%. Most listings do not have open houses, and those that do frequently only have 1 - at the beginning of the listing. You also lose all advocacy and without advocacy there is no point in having an agent at all. Contrary to what you think, you are not an expert at pricing, you can't judge condition or locational issues objectively, you will not have seen the interiors of the closed sales, and you will be operating without knowledge but with lots of emotion. And your "buyers agent" will not be able to negotiate home inspection issues or other difficulties, they will make the phone calls and hope you just give up quickly on the important and contentious issues.
Also, since the average co-broke is 2.5%, your rebate at best is 1.5% assuming you get lucky and find an open house you want to buy. Again, if they have to make an appointment to show you the house, the rebate drops.
Of course, since most open houses, if they are held at all, are held at the beginning of the listing period, and most sellers negotiate very little during the first weeks of a listing, you are limiting your universe of homes only to those where you are likely to overpay, erasing the value of your rebate. New listings have more buyers competing for them and you will find yourself outbid more often. And when you don't, the seller is not coming off his list price very much at all at the time he is doing open houses.
Compare that with a home that has been on the market for 3 months and the seller is getting more motivated to make a good deal. But you won't be able to go after that one, because there are no more open houses and if you need an appointment, your rebate gets slashed. And your agent will have no knowledge of recent closed sales - as he doesn't show them or see them. He might give you a list, but you can't and won't know what to do with it since you don't know about interior condition, features, maintenance, or seller motivation.
You better do your research carefully before you waste $15,000 to save $3,000.
Interesting - Are open houses are only offered immediately after a house is listed and not again afterwards?
I am starting to look now and didn't know that if it's the case.
Interesting - Are open houses are only offered immediately after a house is listed and not again afterwards?
I am starting to look now and didn't know that if it's the case.
Many houses are not held open at all. There is a school of thought in the industry that they are a waste of time, although not all agents agree with that. Also, a good proportion of sellers do not want open houses. Why? They have dogs, or kids, and it's too much hassle to get everyone out of the house. On my last 3 listings we did no open houses. In one case the seller didn't want nosy neighbors coming through.
So it's hit or miss. But when you are looking for your dream home, you really don't want to miss anything.
Having said that, there are times when a house that has been on the market for a long time gets an open house scheduled. Largely because the agent and seller can't think of anything else to do. Like lowering the price, which is the only thing that will really work. However, self-deception is common in real estate, and some sellers think marketing can overcome their unrealistic price expectations. It can't, but that doesn't stop people from trying.
Marc Paolella thanks for responding. Can the buyer not schedule appointments directly with the sellers realtor? Most sites like zillow list the name of the sellers realtor. Why do you feel that the buyer is restricted to only open houses?
Marc Paolella thanks for responding. Can the buyer not schedule appointments directly with the sellers realtor? Most sites like zillow list the name of the sellers realtor. Why do you feel that the buyer is restricted to only open houses?
Read Realmart's website. They explain it in detail. The seller's realtor is generally not going to show you the house if you are represented by another agent. If they do, they are cutting Realmart out of the commission, and then you lose your rebate. Since you have to sign Realmart's Buyer Agency agreement to get the discount, you are represented by them. They have to show you the property. But if they do, your rebate is slashed. They don't want any part of showing you homes. If they do, they want to get paid. Makes sense, no?
So that leaves you in open house land, as per Realmart's website.
Now if you are not trying to land this rebate, and you are truly not represented by another agent, I will show you the house, but one of two things can happen. I am either the seller's agent and you are not represented. In which case my agency earns the entire commission. Or we can enter a dual agency where my agency agrees to represent both sides, but without advocacy. In which case my agency still earns the entire commission.
Either way, if you are chasing this rebate, you will have to sign an agreement to be represented by Realmart, and they have the responsibility to get you into the house. And if they actually have to do any work by meeting you at the property, they are going to slice your rebate. They profit from doing as little as possible. They want you to go to an open house, love the property, buy the property, and they do next to nothing - simply handling the paperwork and showing up at the closing.
Marc Paolella thanks a ton for your comments. This really helps. I did not know this. I am in a situation where the sellers realtor showed me the house since I didnt have a realtor. But now I want representation when I make an offer. I am okay paying the realtor fee ( no rebate). I dont want the realtor for buyer and seller to be the same. What options do I have now?
Marc Paolella thanks a ton for your comments. This really helps. I did not know this. I am in a situation where the sellers realtor showed me the house since I didnt have a realtor. But now I want representation when I make an offer. I am okay paying the realtor fee ( no rebate). I dont want the realtor for buyer and seller to be the same. What options do I have now?
Do not consent to dual agency. In NJ, you have to sign a written consent to allow the listing agent to act as a dual agent. Call the listing agent and tell him or her that you are sorry that you did things out of order, but you do not want dual agency and will be retaining your own representation.
Nobody can force you into dual agency. If the agent is smart, they will realize that their primary goal is to sell the house and not to double dip the commission.
If the agent is not smart, then contact the broker or manager of the office. Tell him or her the same thing. That you want your own representation and will not consent to dual agency.
You should have been given the Consumer Information Statement when the agent first showed you the home. The CIS explains the various form of agency and is designed to let you know the pitfalls right out of the gate. If that was not given to you, then showing you the home and asking you what are called "qualifying questions", such as what is your job, when do you want to move, etc., is UNETHICAL and the agency could be fined.
Explain to the broker/manager that you were not given the CIS, but you do not want trouble, only to make an offer with an outside agency representing you. Hopefully, they will listen to reason. If not, you may have to play hardball.
YOU SHOULD NOT HAVE TO PAY ANY COMMISSION OUT OF YOUR OWN POCKET. If the broker and agent for the seller have half a brain, they should relent, give up the double commission, and process the transaction normally, paying the cobroke to your buyer's agent. If they don't have any brains, you might have to threaten them with contacting the real estate commission. THEY WILL NOT WANT THIS.
There is more hardball you can play, but I won't get into it here in too much detail. Things like contacting the seller and telling them you want to buy their house, but the listing agent is GETTING IN THE WAY in an effort to double dip. THAT will really get their attention. But I would be shocked if you have to go this far. As soon as they hear the words "real estate commission", you should be good to go.
My pleasure. Good luck with your negotiation and hopefully enjoy moving into your new digs!
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