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I have always been happy with the Realtors that I've worked with when selling/purchasing my homes. That being said, if I had to cover the 3% that my agent is getting with the closing of my home purchase here in Houston, I wouldn't be working with one. I would hire a contract lawyer for $400 per hour and likely be thousands ahead.
Unlikely....I'm sure your attorney, in a world without buyers agents, would increase his fee quite a bit to cover the liability which could be incurred from your transaction.
Unlikely....I'm sure your attorney, in a world without buyers agents, would increase his fee quite a bit to cover the liability which could be incurred from your transaction.
Doesn't most of the liability rest with the title company? I can't understand what major liability the lawyer would be exposed to that a buyer's agent is not?
Doesn't most of the liability rest with the title company? I can't understand what major liability the lawyer would be exposed to that a buyer's agent is not?
ch, the liability of the title company is with the title insurance that they issue.
The liability that's being mentioned is that during a transaction, there are many things that can go wrong. When things go wrong, many times the agent is the first one to be sued.
There are seminars for attorneys on what to watch for in order to sue the agent. They are sued all the time, and there is plenty of case law in every state regarding these suits.
From attorney Michelle Lind's Arizona Real Estate Law book, here are some sources of law suits:
Water issues, availability, water lines, well issues
Permit code zoning issues
termites or termite damage
sewer issues
mold
boundry encroacnments
acreage/square footage
structural condidions cracks etc
Electrical problems
roof leaks,
The law suits, in addition to the factual basis of a claim, may allege:
professional negligence
breach of fiduciary duty
failure to diclose
violation of real estate statutes
innocent misreperesentation
negligent misrepresentation
intentional misrepresentation
fraud
consumer fraud
breach of contrct
The consequenses if the agent loses can be:
forfeiture of commission
actual damages - money to compensate client
punitive damages
SDRE sanction (civil penalties up to loss of license)
association sanction (education requirements and monetary penalties to loss of membership.
criminal penalties
attorneys fees & costs.
..
Try this on for size. Sellers decide to pay their listing agent only. Buyers have to pay theirs out of their own pocket. How does that one sound. I'll bet there aren't many takers.
I agree it won't happen, but I don't think it would matter, at least not in this area. If the buyers needed to start paying a separate realtor fee, it would be reflected in the selling price of the home, so there would be no real (financial) difference, IMO. You often see this in reverse with VA sales, as the buyer's expenses are "capped". From what I have seen, the offer and final sales price is "adjusted" to compensate for this.
The other effect IMO would be a detrimental effect on sales. If the seller "pays" the full commission, the cost is included in the base price thus can be included in the mortgage. If the buyer pays out of pocket, they will need more cash at closing unless the appraisal comes in high enough to cover it, or to keep it from being an out of pocket cost, the seller can always include an allowance of some sort.
No matter what, (IMHO) there would be no net effect to the buyer. And, while you may satisfy some more buyers, my guess is you will begin to have more dissatisfied sellers - kind of an overall "push".
I think a knowledgeable realtor is worth his or her weight in gold - problem is, it is very difficult for an average homeowner to know up front if he or she is hiring a true professional.
Agreed, kdzgon. Buyers wouldn't want to pay these fees out of pocket as well they shouldn't. But, there are too many buyers that think they are entitled to that money. Again, it's not theirs, it's the sellers.
"If wishes were fishes..." The idea that any savings the seller sees by not paying for the buyers agent being reflected in the sale price of the house, is a joke! If a buyer goes to a FSBO, and says, "hey, I don't have an agent with me so how about you sell me the house for that much less", guess what most sellers will say. The seller is out to hold onto as much money as he can and in most cases is not going to hand it over to the buyer. Yes, there are the occasional ones that do, but often the house was overpriced to start with so no savings there.
I, for one, would not want to see the buyers being responsible for our fees. It would increase their out of pocket responsibilities and therefore would lower how much house they could buy. The overall purchase ability, especially for first time buyers, would decrease.
As far as knowing if they are hiring a true professional, that is a problem. I know in some states, if a buyer is dissatisfied with his agent, it can be difficult to get out of the contract with them. I find that amazing. If either of the two sides is not happy with how things are going, it is in everyones best interest to end it and move on. Making them stick it out is not productive, creates distain toward the agent, and often for the industry as a whole. Not a good result for anyone.
Interview, interview, interview. You can often get a "feeling" about someone. Go with your gut. It isn't always the statistics since they can be skewed to fit.
ch, the liability of the title company is with the title insurance that they issue.
The liability that's being mentioned is that during a transaction, there are many things that can go wrong. When things go wrong, many times the agent is the first one to be sued.
There are seminars for attorneys on what to watch for in order to sue the agent. They are sued all the time, and there is plenty of case law in every state regarding these suits.
From attorney Michelle Lind's Arizona Real Estate Law book, here are some sources of law suits:
Water issues, availability, water lines, well issues
Permit code zoning issues
termites or termite damage
sewer issues
mold
boundry encroacnments
acreage/square footage
structural condidions cracks etc
Electrical problems
roof leaks,
The law suits, in addition to the factual basis of a claim, may allege:
professional negligence
breach of fiduciary duty
failure to diclose
violation of real estate statutes
innocent misreperesentation
negligent misrepresentation
intentional misrepresentation
fraud
consumer fraud
breach of contrct
The consequenses if the agent loses can be:
forfeiture of commission
actual damages - money to compensate client
punitive damages
SDRE sanction (civil penalties up to loss of license)
association sanction (education requirements and monetary penalties to loss of membership.
criminal penalties
attorneys fees & costs.
So why can't a lawyer get the same liability insurance that is available to buyer's agent? And I would think people would be less prone to sue a lawyer than a real estate agent, thus reducing the attorney's liability.
And I don't think an attorney would charge anywhere close to 30K on a 1M house. In Canada, when I bought a house with no title insurance (did not exist at that time) the attorney charged me under 2K to close on a house valued at 172K. And he had to do the title search for title and liens etc so had the additional liability of that also.
So why can't a lawyer get the same liability insurance that is available to buyer's agent? And I would think people would be less prone to sue a lawyer than a real estate agent, thus reducing the attorney's liability.
And I don't think an attorney would charge anywhere close to 30K on a 1M house. In Canada, when I bought a house with no title insurance (did not exist at that time) the attorney charged me under 2K to close on a house valued at 172K. And he had to do the title search for title and liens etc so had the additional liability of that also.
Just out of curiosity....How long does it take to sell a million dollar home?
It depends. I sold one for 1.1mill in 3 days. Very, very desireable location, well priced resulted in multiple offers. Got everyone hyped up about it and had over 100 agents, many with their clients, at the first brokers open. Got the full price, no contingencies.
That is not the norm by any stretch. Also, since this is going to raise the attorney question, they are not involved in real estate transactions in PA. The Realtor does all of the work.
It depends. I sold one for 1.1mill in 3 days. Very, very desireable location, well priced resulted in multiple offers. Got everyone hyped up about it and had over 100 agents, many with their clients, at the first brokers open. Got the full price, no contingencies.
That is not the norm by any stretch. Also, since this is going to raise the attorney question, they are not involved in real estate transactions in PA. The Realtor does all of the work.
I only ask because many do not understand, or refuse to understand marketing costs on a million dollar listing. So I wondered what the poster would consider a 'reasonable' amount of time to sell one. I have a 9M listing I would love to sell, it costs more to market and takes longer to sell.
Many folks have posted that an attorney can do it all for them, I'm curious how many have asked an attorney to do just that. I've had this conversation with attorneys and their advice is to hire a RE Broker.
9 million is going to take some time to sell. You are going to appeal to a very small market of buyers who can and would want to spend that.
I would suggest marketing internationally. There are web sites that will do it for free and you can even search for other Realtors who have web sites and see if they will let you put it on their sites sort of as a reciprocal link. This should cost you little or no money.
I hope the listing contract is for a substantial amount of time. You will need the extra time to sell that kind of house and not be eliminated from the process should the contract run out.
I haven't checked in a while, but there was one here for 23M but from what I understand, it had a 3 year listing contract.
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