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Old 07-27-2012, 01:48 PM
 
3,913 posts, read 10,068,924 times
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What I was trying unsuccessfully to say was, in a dual agent or variable rate commission agreement, scenario two may not be applicable at all. If you are not represented, this would not be disclosed to you either. See Standard of Practice 3-4 --> NAR: Real Estate Resources: 2012 Code of Ethics and Standards of Practice
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Old 07-27-2012, 02:02 PM
 
Location: Lewistown, MT
5 posts, read 14,002 times
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In my humble opinion (very humble since I'm still fairly new to the real estate world), the financial incentives only go so far. You're considering a lot of "ifs." For instance, what if your offer is the only one on the table? There is not much incentive for the agent. They present the offer as it is, and it's up to the seller whether to accept or counter. In either case, the seller's agent is responsible to get the best and highest price for them. You, however, have no one on your side, and the other agent (regardless of your background) will be more likely to try and give you the short end of the stick.

But beyond that, do you have the experience to do more than just know what the paperwork is saying? Do you know the small details that could come back and bite you? As a new agent, I deal with others in my area trying to give me the runaround and get away with things because they think I won't notice. Most people wouldn't notice, in fact. But it can turn into a big deal if you don't have someone who is familiar not only with the area and real estate and negotiations, but also the most recent laws and the things that need to be done to protect your interests that the other agent won't concern him/herself doing.

It's ultimately up to you, but I would suggest finding a good agent that's more concerned with the client than the dollar sign.

(Oh, and if the seller's agent is being ethical, it doesn't matter what they make. It's their responsibility to take care of the client, regardless of the monetary compensation.)
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Old 07-27-2012, 02:27 PM
 
10 posts, read 12,801 times
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manderly -

sorry - i did not answer your question directly - and perhaps i chose the wrong choice of words when i said brokers might present my offer in the best posible light - what i was trying to say is better articulated in my other replies . . .

i was sort of referring to the fact that if a broker had to present my offer of $700,000 and also had to present another offer for $725,000 - he/she might focus more on the positive attributes of my offer (quick close, no need to sell another house, easy to deal with) and perhaps some of the possible negative aspects of the the other offer

some of these things might could be more objective (financing vs no financing, etc) - some of them might be more subjective (easy to work with, stated intention of desire to close quickly, etc)

my thought was that either consciously or sub consciously - the agent might be inclined to slant things towards the offer that would yield twice the commission

in the best case - it could be unintentional and/or subconscious
in the worst case - this could/would be deliberate (and clearly unethical, if not, illegal)
more likely, it would fall somewhere in between - hopefully much closer to the former, not the latter

regardless, 'present' my offer was probably inaccurate - more just a possible slanting of things
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Old 07-27-2012, 02:42 PM
 
10 posts, read 12,801 times
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tampa -

excellent point - i had not considered the possibility of a variable rate commission agreement - but i probably will in the future : )

i have sold a few houses in the past with the assistance of an agent - (funny how i am more comfortable on that side of the equation) - and i have never seen or been offered a variable rate commission agreement

i also know many people who have sold multiple houses - and i never heard that mentioned from any of them -

back to the second offer in the example - if there was a variable rate contract - i guess any impact would obviously be negated - but i'd never know : )

thanks
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Old 07-27-2012, 02:57 PM
 
10 posts, read 12,801 times
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brandon -

i am fairly conservative, but i am comfortable with risk. the risk in this case might be trying to be too cute and possibly losing an opportunity to buy a property that i am interested in. entering the process with a fixed top price that i would be looking to pay (and hoping that i am the only buyer, or that the broker would slant things my way to ensure a larger commission) ensures that i will not pay more than i am willing (i am willing to take the risk that i do not end up with the property - especially because there are many more on the market that are very similar)

regarding representing myself - in the past, i have had my attorney work with the listing agent - and perhaps fortunately, never had a problem. my lawyer is a local with a small firm and they do several hundred closing per year - i think they know their way around that part of things

i agree that it comes down to weighing the risk against the reward - but i was hoping there might be some feedback - especially from real estate professional - as to how prevalent this type of thing might be. if it occurs infrequently, the possible gains are not enough to offset the risk of not having representation. if it is more prevalent - the opportunity to save $25,000 or $50,000 or more on a $700,000 property would be justified
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Old 07-27-2012, 03:20 PM
 
4,626 posts, read 7,197,499 times
Reputation: 4735
Ex Long Islander here, former realtor - looking to buy again on LI.

I'm using a buyer's agent.

And I'm buying in my old neighborhood and STILL using a Buyer's Agent.

My last offer was not accepted - even though I am a cash buyer, offered about 4% above comp and flexible close. Only contingency was inspection.

Seller accepted a higher offer, needs financing - jumbo loan.. and the deal is going to fall apart in financing unless the buyer can come up with another $200,000 or so cash. Two previous bank appraisals came in way low.

Ask me how I knew??????

My buyer's agent.
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Old 07-27-2012, 03:43 PM
 
Location: NJ
17,579 posts, read 38,295,421 times
Reputation: 16098
Quote:
Originally Posted by trustbutverify View Post
manderly -

sorry - i did not answer your question directly - and perhaps i chose the wrong choice of words when i said brokers might present my offer in the best posible light - what i was trying to say is better articulated in my other replies . . .

i was sort of referring to the fact that if a broker had to present my offer of $700,000 and also had to present another offer for $725,000 - he/she might focus more on the positive attributes of my offer (quick close, no need to sell another house, easy to deal with) and perhaps some of the possible negative aspects of the the other offer

some of these things might could be more objective (financing vs no financing, etc) - some of them might be more subjective (easy to work with, stated intention of desire to close quickly, etc)

my thought was that either consciously or sub consciously - the agent might be inclined to slant things towards the offer that would yield twice the commission

in the best case - it could be unintentional and/or subconscious
in the worst case - this could/would be deliberate (and clearly unethical, if not, illegal)
more likely, it would fall somewhere in between - hopefully much closer to the former, not the latter

regardless, 'present' my offer was probably inaccurate - more just a possible slanting of things
Personally I think you are way underestimating the seller in your example above. Unless the agent is blatantly lying about some part of the offer it is all laid out for the seller. I can't imagine an agent that had any hope of being taken seriously would even attempt to push the lower price offer if there wasn't a real advantage to the other offer and I can't imagine a seller being duped in to the lower offer without that real benefit (whatever it may be).
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Old 07-27-2012, 03:47 PM
 
Location: Lexington, SC
4,281 posts, read 10,286,407 times
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As a seller, I would always use a sellers agent.

As far as a buyers agent, if one knows the area, knows what one is looking for, knows the local market, likes or knows how to negotiate, is not afraid to walk away, has bought/sold a few properties, knows how to read a contract, signs nothing without understanding it, uses legal backup, etc. then I see no need for a buyers agent. They simply add another paid/confusing layer to a business deal.

My bottom line issue is not the money. It is the additional layer taht can actually remove the buyer from having overall control of the deal.

Based on what you say about yourself, I say no need for you to use one.
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Old 07-27-2012, 03:59 PM
 
4,626 posts, read 7,197,499 times
Reputation: 4735
Quote:
Originally Posted by accufitgolf View Post
As a seller, I would always use a sellers agent.

As far as a buyers agent, if one knows the area, knows what one is looking for, knows the local market, likes or knows how to negotiate, is not afraid to walk away, has bought/sold a few properties, knows how to read a contract, signs nothing without understanding it, uses legal backup, etc. then I see no need for a buyers agent. They simply add another paid/confusing layer to a business deal.

My bottom line issue is not the money. It is the additional layer taht can actually remove the buyer from having overall control of the deal.

Based on what you say about yourself, I say no need for you to use one.
Commission is the same whether it is split or not. terms are laid out in the seller's contract with the listing agent.

And I'm sure your closing attorney can get you into new listings before they hit MLS.
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Old 07-27-2012, 06:18 PM
 
Location: Salem, OR
13,741 posts, read 31,556,293 times
Reputation: 12105
TrustbutVerify you have some serious problems with your Ifs. For starters all listing agreements are different. You are basing your actions with the assumption that the listing agent will get all of the money therefore they will be happy to make the deal work and push your deal.

More and more agents are starting to spell out splits in listing agreements, AND some are starting to spell out unrepresented buyers. So, in mine for example I get a certain fee. I get the same fee if there is a buyer agent and I get the same fee if the buyer is unrepresented. If the buyer is unrepresented that money goes back to the seller. So... would the seller have more incentive to take your offer over another? If the net is better sure.

The problem you have is that you don't know what the listing agreement says. So you could be moving forward with false assumptions. Personally I think you are over thinking it. If you don't want representation as you don't see the value, that is totally fine. Represent yourself. Make the offer you are willing to make and let the chips fall where they may. Don't spend mental energy trying to figure out scenarios where you have no information so trying to determine outcomes is a mute point.
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