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Sooo...Let's say Buyer's agents require a downpayment/fee. I am not yet sure which part of the city to live in (I need to visit homes to be able to reach a decision!), and am considering neighborhoods quite far apart. Of course, I would not want to pay thousands of dollars to different buyer's agents.
So I am left to call Seller's agents directly to see homes. I decide on the neighborhood and home. To negotiate, I want a Buyer's agent on my side - but the Seller's agent won't be willing to split the commission.
Heck, what is the buyer to do in such a scenario?
Most buyer's agent are not going to charge their client. Obviously some do, so just ask up front if there will be a charge to you.
You are right, dealing directly with the Seller's agent compromises your negotiation potential. Most agents I know would love to work with you and not charge you a dime - you're a ready, willing, and able buyer! We don't have too many of you good folks in this slow market.
Evidently some agents feel that it might be a waste of their time and gasoline to work with someone who may or may not purchase a home. There are different "takes" on that theory as you can see from some of the other posts.
If you want to move to my town, I'd be happy to represent you free of charge!
Were you typically having people do that? I'm sure you interview the prospective buyers first to weed out the ones that just want a tour guide for the weekend.
While I've gotten burned a time or two, I basically choose whether or not I will work with a prospective buyer, rather than the other way around. And not everybody I put in my car is going to buy immediately, and some of them never do. However, several of the "non-buyers" are my best sources of referrals, and some of the "down the road" buyers do buy, and use me as their agent when they're ready.
It is a judgment call, and you have to be able to read people and ask the type of questions that will let you know what their intentions are. Usually those that aren't immediate buyers that I choose to work with are very cognizant of my time and gas.
I know some agents that will only show 5 houses, and they tell their clients this at the outset. I guess some folks are okay with that. If I were the buyer I'd tell them . . . Thanks, but no thanks. I guess I'm trying to be the kind of agent that I would want to work with.
Gretchen, I agree, you should be the kind of agent you'd want to work with. In addition to charging a retainer, I also set a limit on the number of houses I'll show. I feel that if a client has to see house after house after house, I haven't done a sufficient job of understanding their needs. There are literally thousands of homes available in this area. In this area, buyers are like kids in a candy shop...if you do your consultation, print out what meets a buyers needs, and don't set realistic expectations, they will ask to see every house. My time is just as valuable as the next person's. I have bills to pay and a family to care for just like everyone else. If I'm spending hours on end taking one client to see 20 homes, am I really making the smartest use of my time? When I break my commission down on an hourly rate, are all those hours I spend really worth it? What am I supposed to do next month for income when I have worked on nothing else but taking one client from house to house the month before? I'm sure my personal needs vastly differ from yours. For me, it's a business decision.
Last edited by Tish Thompson; 07-23-2007 at 11:28 PM..
Reason: clarification
Tish - totally agree with you about showing many houses. You had mentioned the 15 to 20 houses in your earlier post, and I was wondering if you really do show that many. Glad to hear not! I think we're definitely in agreement on that one. We (meaning my buyers and me) usually spend a few hours looking at several homes that might be possibilities (about 4 or 5). I get alot of input from them as we tour these, so that I can get a real feel for what's going to be that "perfect" house. Then the following day, we've usually got another 4 or 5, of which 1 or 2 will probably be their top picks to make an offer on.
For me, I'm always looking to the future, and not just the present "deal" (or non-deal). It's just that a couple of referrals from a non-deal that result in a full commission beats the $300 - $1000 that I'd take from them now for my retainer and never hear from them or their friends again.
I hope I haven't offended you, and I totally respect your position and logic. As you mentioned it's a business decision that works well for you. And I hope my decision, albeit a different one from yours, works well for me. I personally really enjoy being a realtor and helping folks. If I start getting too worried about making the "deals" happen instead of focusing on helping people, it takes all the joy out of it for me. If it comes down to that, I'll just get a regular 9 to 5 job and be done with it. At least that way, I'd get to leave the job at the office instead of doing it 24/7.
No disrespect intended, but if I ever get to the point where I get to be a buyer again, I won't be interested in paying for the privilege. I will still be recovering from paying the 40K commission to the realtor who took multiple years to sell my home. Add that to the 10% or more that the value of my home has dropped while I had it on the market. And what's the value for multiple years of having my life on hold and having to live in a model home? No, I won't be wanting to pay on both ends of this nightmare!
Tish - Buckhead Broker says he does not take the commission and the fee is non-refundable. I understand the "retainer" concept, but I don't think that's how Buckhead Broker does it. I was just wondering about having the buyer pay the commission instead of the seller and how that worked.
Not exactly. What I said is that the upfront fee is non-refundable if the clients do not buy a property through my firm during the contract period. I reduce the total commission that would be paid by the amount collected up front.
There are also times when my client pays the entire fee. Our fees for this service run from $40,000 to over $150,000. (Think about it folks, the money has to come from somewhere - either the seller wants a higher price to pay the fee or the buyer wants a lower price and they'll pay it)
Selling it is simple. My clients are looking for properties to build estate homes on. Those types of properties are not typically available. Knowledge of who has properties they might sell comes from living in an area for about 50 years, seeing these people regularly, knowing them or their children well, and being able to handle a sale very discretely without signs, open houses or the typical agent parade. Sellers appreciate this service and buyers will gladly pay to be shown properties that are not "on the market" but let them buy into very established neighborhoods and build new homes.
Last edited by Buckhead_Broker; 07-24-2007 at 06:05 AM..
The funny thing is ..the agent already know up front that I am an able buyer with a LOI from the lender, or preapproval letter on hand and I am getting additional $10k or so from the state. I am very upbeat about using an agent, but if they wanted to charged me some fees and I am not even sure if they gonna do some half ass job or not...why the hell i even use them right? Does it make sense to you guys? They are set to make some commission if I buy, aint that how it works? You gotta spend a little to make some $...
I've been dealing with a little different situation, and I can see times where one could pay a realtor a flat fee or an hourly rate. My dad in law is having me research properties for him because he wants to buy something in an area with cooler weather. We're in Florida, but he's out of state for the summer in Montana. He wants me to search FSBO's only for now, do some preliminary leg work, and let him know what I find. We do expect him to purchase something within six months unless I find something hot.
Most owners are wonderful, up front, and don't mind me talking to them. I'm up front with them as to what I'm doing. I have really run into some "interesting" people, and find that what others have posted about the potential issues with FSBOs to be true (again, most are wonderful--not meant as a slam to anyone selling their home FSBO). To make a long story short, trying to do this long distance without a representative is nearly impossible, and I could see realtors charging an hourly rate as any other professional or a flat fee for a service. I would not ever expect a professional to help me in a situation like this without some remuneration. Finally, I have had to let some properties go for various reasons that I might not have had to let go.
Not exactly. What I said is that the upfront fee is non-refundable if the clients do not buy a property through my firm during the contract period. I reduce the total commission that would be paid by the amount collected up front.
There are also times when my client pays the entire fee. Our fees for this service run from $40,000 to over $150,000. (Think about it folks, the money has to come from somewhere - either the seller wants a higher price to pay the fee or the buyer wants a lower price and they'll pay it)
Selling it is simple. My clients are looking for properties to build estate homes on. Those types of properties are not typically available. Knowledge of who has properties they might sell comes from living in an area for about 50 years, seeing these people regularly, knowing them or their children well, and being able to handle a sale very discretely without signs, open houses or the typical agent parade. Sellers appreciate this service and buyers will gladly pay to be shown properties that are not "on the market" but let them buy into very established neighborhoods and build new homes.
Buckhead, the difference between you and many other agents on this board is that your specialize in extremely high end homes (multi, multi-million dollar homes) correct? The firm I work for (in marketing not as an agent) specializes in high end property (the most expensive being $4M) that we will on occasion adverstise in magazines like Unique Homes but your homes I suspect are even more high end than this.
Not exactly. What I said is that the upfront fee is non-refundable if the clients do not buy a property through my firm during the contract period. I reduce the total commission that would be paid by the amount collected up front.
There are also times when my client pays the entire fee. Our fees for this service run from $40,000 to over $150,000. (Think about it folks, the money has to come from somewhere - either the seller wants a higher price to pay the fee or the buyer wants a lower price and they'll pay it)
Selling it is simple. My clients are looking for properties to build estate homes on. Those types of properties are not typically available. Knowledge of who has properties they might sell comes from living in an area for about 50 years, seeing these people regularly, knowing them or their children well, and being able to handle a sale very discretely without signs, open houses or the typical agent parade. Sellers appreciate this service and buyers will gladly pay to be shown properties that are not "on the market" but let them buy into very established neighborhoods and build new homes.
Ah, I see. Thanks for the clarification. Buckhead Broker, you definitely have a niche and are addressing a unique market there. And you obviously have the inside track on finding properties for your clients that they would be unable to on their own.
Yes, we specialize in a very small geographic area. My sales come from one ZIP code, 30327. My listings run from about $2M to over $10M. There is fierce competition for listings and properties to build homes on. So how do we compete? For the estate lots, we handle them through private sales. Noone other than the seller, the buyer and us know about their availability. The bonus? We get 5% for those sales and don't have to split the fees with anyone.
But look folks, anyone can do this. It takes focus, finding a niche you can serve with the experience you already have - or can build on - and doing it better than anyone else. Too many agents follow the crowd. If you can't differentiate your services or value then all you can compete on is price (fees).
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and not charge you a dime - you're a ready, willing, and able buyer! We don't have too many of you good folks in this slow market.
). It's just that a couple of referrals from a non-deal that result in a full commission beats the $300 - $1000 that I'd take from them now for my retainer and never hear from them or their friends again.
Thanks for the clarification. Buckhead Broker, you definitely have a niche and are addressing a unique market there. And you obviously have the inside track on finding properties for your clients that they would be unable to on their own.
