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Old 03-28-2009, 12:29 PM
 
18 posts, read 51,099 times
Reputation: 12

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What do you think about this? I've searched the internet for over a week for a good bank owned deal. I created a list of homes I had an interest in, did research on the areas crime rates etc, then contacted a realtor I met a couple of years ago.

I picked one of these places to make an offer on, and while I was signing papers to make the offer, I noticed my realtor was also getting a $3,000 bonus which was nearly 3 times as much as the commission she is already getting. (enough to cover closing costs)

I am a college student who barely keeps any income since it goes to school and books. I don't see why my realtor can't offer to cover the closing costs with the bonus so that I don't risk losing out if another buyer makes a better offer, since I asked the seller to pay for closing.

I am the one who found the place and contacted the realtor.

Do you think it's fair that I may have to pay more money because the realtor that III picked doesn't want to let go of her surprise bonus!?!? This seems unfair to me...

Last edited by peaceandprosperity; 03-28-2009 at 12:30 PM.. Reason: typo
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Old 03-28-2009, 12:52 PM
 
Location: Hernando County, FL
8,488 posts, read 20,557,742 times
Reputation: 5397
On many lower priced homes there is a bonus offered due to the low amount of the commission.
If $3000 is 3 times the commission then we are talking about $1000 commission.
After the Realtors expenses and split with the broker they may be looking at $500-$600 on a $1000 commission.

From what you said, you picked the houses to view and decided on which to purchase so it is not as if the agent pushed that house to get a bonus.
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Old 03-29-2009, 07:04 AM
 
Location: Gilbert - Val Vista Lakes
6,069 posts, read 14,730,418 times
Reputation: 3876
Quote:
Originally Posted by peaceandprosperity View Post
What do you think about this? I've searched the internet for over a week for a good bank owned deal. I created a list of homes I had an interest in, did research on the areas crime rates etc, then contacted a realtor I met a couple of years ago.

I picked one of these places to make an offer on, and while I was signing papers to make the offer, I noticed my realtor was also getting a $3,000 bonus which was nearly 3 times as much as the commission she is already getting. (enough to cover closing costs)

I am a college student who barely keeps any income since it goes to school and books. I don't see why my realtor can't offer to cover the closing costs with the bonus so that I don't risk losing out if another buyer makes a better offer, since I asked the seller to pay for closing.

I am the one who found the place and contacted the realtor.

Do you think it's fair that I may have to pay more money because the realtor that III picked doesn't want to let go of her surprise bonus!?!? This seems unfair to me...
I'm going to tell it to you like it is, and you won't like what you hear. But you need to put yourself in the other person's shoes when you're trying to take money out of their pocket.

First of all, the Realtor has no obligation to use his/her compensation to help you purchase a house and pay your closing costs. That is your responsibility; that is, unless you wish to give the Realtor a proportionate share of ownership of the house.

His/her job is to negotiate the best price for you, and then to work through the closing process and take care of any issues that come up, and to keep you out of legal trouble.

Whatever commission and/or bonus the agent is offered by the listing agent is between the two agents. It is not money that should go to the buyer.

Do you want the Realtor to work hard for you, and negotiate the best price for you? Of course you do!!!

Then make sure s/he gets paid well. She'll probably save you much more than just that bonus money that you're trying to take out of his pocket.

Do you want the Realtor to just coast through; not try hard to negotiate the best price for you, and possibly end up costing you more money by not working hard for you? Of course not!!!

Then try to take part of her compensation, and that's what will happen.

Try to take part of my compensation, and I'll tell you to find yourself another Realtor, because I'll know that you don't understand, and don't have respect for the work that I would do for you. Consequently, you won't be a client that I will want to work hard for. If you've put me in that position where I can't work hard for you, then I won't work for you at all.
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Old 03-29-2009, 11:11 AM
 
18 posts, read 51,099 times
Reputation: 12
Mike, thanks for clearing up why the realtor gets a bonus on lower priced properties. And yes, all she did was show me a couple of properties I had already chosen and did research on. I actually sent her the MLS numbers as well.

Don't get me wrong..I am not upset that she is getting a bonus; I am upset because if there is a counteroffer, I may not be able to get the place unless she is willing to contribute from the bonus..If she wants the bonus that much, I'd even make seperate payments after closing..

I just don't want to lose this opportunity to purchase an affordable home closer to school while I continue my studies. I found this article posted below, where some realtors only accept commission and use the bonus to help their clients, since it's in their clients best interest. Anyway, I just hope it works out. The offer to the bank was a week ago, and no word yet. Seems to be taking a while.

Bill, I can understand what you mean in a normal situation (if you will), but she really didn't have to do anything as far as locating the property I would buy...She is already getting a quick commission..I called her with the MLS numbers , we went to see them the next day, and signed some papers to put in an offer the same day. She actually suggested I offer a slightly higher amount for an "even round number" since it looks better (and just incase there's a higher offer) even though I am asking for closing costs...but without that 3K they offer the buyers agent, I will have to take a different loan with a signifigantly higher intererest rate (2.5% higher) as well, so she isn't saving me any money really. Plus..Bank Owned property transactions are pretty straight forward from what I understand...unlike shortsale negotiations. I am trying my best to see it from your perspective as well though. I guess it's just a waiting game now.

I appreciate everyone's input.

Seller Pay Me More - Buyer Trust Me!

Last edited by peaceandprosperity; 03-29-2009 at 11:40 AM.. Reason: add link
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Old 03-29-2009, 12:44 PM
 
Location: Barrington
63,919 posts, read 46,474,580 times
Reputation: 20674
I am one of those agents who discloses if a property carries a bonus and will kick-in/rebate the bonus, at closing.

( With due respect for some of the other comments, the average price point in my area is in the $600's a different situation than someone working in a more affordable market)

If you wat to see mad, look at a seller at the closing table who realizes the incentive is going into the deal the buyer got. Whew !

Instead of doing the happy dance that he got sold, he's focusing on where the money went.
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Old 03-31-2009, 07:06 AM
 
Location: Gilbert - Val Vista Lakes
6,069 posts, read 14,730,418 times
Reputation: 3876
Quote:
Originally Posted by middle-aged mom View Post
If you wat to see mad, look at a seller at the closing table who realizes the incentive is going into the deal the buyer got. Whew !

Instead of doing the happy dance that he got sold, he's focusing on where the money went.
The OP wasn't discussing disclosure. He is discussing that he feels he is entitled to the bonus because "he found the house". He is one who does not understand the value of a good Realtor, and apparently has no concept of what the Realtor does that can either save or cost him a lot of money. He's just focused on having the Realtor help him pay for his house.

What you seem to be stating is that an agent offers an incentive to the buyers agent without the sellers knowledge.

In AZ the seller contracts with the agent for a total commission. It's up to the agent to determine how to split that commission. The seller gets a copy of the plano which shows the commission the listing agent contracts for with the buyers agent, so there is full disclosure.

Usually it's the seller who actually offers the bonus to the buyers agent, out of his/her pocket in order to "hopefully" get a quicker sale.

In both cases there should be no surprise to anyone.
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Old 04-05-2009, 08:08 PM
 
18 posts, read 51,099 times
Reputation: 12
Quote:
Originally Posted by Captain Bill View Post
The OP wasn't discussing disclosure. He is discussing that he feels he is entitled to the bonus because "he found the house". He is one who does not understand the value of a good Realtor, and apparently has no concept of what the Realtor does that can either save or cost him a lot of money. He's just focused on having the Realtor help him pay for his house.

What you seem to be stating is that an agent offers an incentive to the buyers agent without the sellers knowledge.

In AZ the seller contracts with the agent for a total commission. It's up to the agent to determine how to split that commission. The seller gets a copy of the plano which shows the commission the listing agent contracts for with the buyers agent, so there is full disclosure.

Usually it's the seller who actually offers the bonus to the buyers agent, out of his/her pocket in order to "hopefully" get a quicker sale.

In both cases there should be no surprise to anyone.

There was no need for that insult or condecending tone Bill. YOU don't understand the details of this transaction, so why would you say I have no concept of how the realtor can save me money? This is a bank owned home...pretty straight forward transaction. If you can, do give me one way a realtor can save someone a lot of money on a bank owned property when there's no room for negotiations on an offer. Every situation is unique. The only person that can save me money is a lender in a situation like this. Have a nice day.
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Old 04-05-2009, 08:52 PM
 
Location: Columbia, SC
10,903 posts, read 21,863,511 times
Reputation: 10534
Quote:
Originally Posted by peaceandprosperity View Post
There was no need for that insult or condecending tone Bill. YOU don't understand the details of this transaction, so why would you say I have no concept of how the realtor can save me money? This is a bank owned home...pretty straight forward transaction. If you can, do give me one way a realtor can save someone a lot of money on a bank owned property when there's no room for negotiations on an offer. Every situation is unique. The only person that can save me money is a lender in a situation like this. Have a nice day.
Well, I have one for you. Bank prices are negotiable. There, I just saved you money and I'm a Realtor. No need to get hostile about it. Bill provided an accurate answer even if you didn't like it.

If you want another-earnest money, helping you get the right financing and lender, home warranty, seller paid closing cost, getting the right closing date, helping get competent inspectors...I can keep going but that probably will be enough to suffice. Have a nice day.
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Old 04-05-2009, 09:17 PM
Status: "Made the Retirement Run in under 12 parsecs!!!" (set 16 hours ago)
 
Location: Cary, NC
43,049 posts, read 76,592,428 times
Reputation: 45373
Interesting.
Very interesting.

So when I helped that feller offer $230,000 on a $249,900 list REO house, and we closed at $232,000...

1. There was no room for negotiation?

2. He did not save more than the 3% BA commission?

And when I fixed him up with dependable contractors who estimated the roof replacement at $3600 rather than the $5700 his disappearing GC proposed, and my guys showed up and did a great job, and finished up the other exterior repairs and the extensive interior work, there was no added value in our relationship?

New math, I guess.
I'll stick to my slide rule if that's the way things cypher out today.
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Old 04-06-2009, 10:05 AM
 
Location: Gilbert - Val Vista Lakes
6,069 posts, read 14,730,418 times
Reputation: 3876
Quote:
Originally Posted by peaceandprosperity View Post
There was no need for that insult or condecending tone Bill. YOU don't understand the details of this transaction, so why would you say I have no concept of how the realtor can save me money? This is a bank owned home...pretty straight forward transaction. If you can, do give me one way a realtor can save someone a lot of money on a bank owned property when there's no room for negotiations on an offer. Every situation is unique. The only person that can save me money is a lender in a situation like this. Have a nice day.
My response was not to be condecending nor insulting. It was to be very frank and up front. I apologize if you were offended.

I buy bank owned properties for my own account, to resell at a profit. My business partner and I have bought nine (9) in the past 11 months. We're currently negotiating for the 10th.

We had offered on this one before, and lost it to someone bidding higher, with an FHA loan. Our offer was cash, but much lower than the FHA offer.

Two months later the FHA deal fell apart, and we submitted a lower offer than our previous offer. The bank has countered, and is getting down in our ball park, so we are preparing our next counter.

I've bought 3 bank owned as buyers agent for my clients. I also list and sell bank owned properties. I sold two in the last two months. One sold at about 9% below list. The other sold above list. So I have a very good feel for what banks will accept. As you stated, each situation is unique and the bidding strategy will be different for each property; but the bank prices are not fixed.

All banks will negotiate on the property, and a good Realtor who deals with bank owned homes knows how to negotiate with them, and will have a good idea of what they will accept. S/he will also know if the house is under priced so that the offer will have to be over list because of competition.

To answer your question directly, the agent who understands the market and strategies for negotiating with the banks will save you a lot of money by the negotiating strategy. In some case you may be advised to offer higher (if the house is under priced, and you really want that house).

If your agent has told you that the banks will not negotiate, then you need to get another agent, because that is not correct.

If you would like the name of a lender that I've found has the lowest interest rates and the lowest loan fee, feel free to pm me and I'll give you that information so you can compare.
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