U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Real Estate
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 08-03-2013, 06:59 AM
 
244 posts, read 336,408 times
Reputation: 617

Advertisements

I've often wondered about the concept of a buyer's agent. In a real estate deal, both sides are incentivized to get the highest possible sales price to generate the highest possible commission. The seller of course wants to sell for the highest possible and a buyer's agent wants a the largest possible commission, so therefore, the highest price is really the goal for both sides.

Any time I see a realtor, hear stories, even watch shows, the "buyer's agent" is always pushing the person into the most expensive home they can, often times pushing them out of their budget, by "stretching" for something "they really want", not need. I have not for the most part seen them encouraging them to buy a home that is comfortably under their budget max, encouraging them to take on less debt, and spending less.

A very infamous commercial from the height of the housing boom from Century 21 Realty showcases the work of a so called "buyer's agent", effectively bullying a guy into buying a house he can't afford because "it's special".

Suzanne Researched this - Remember, she's the "buyer's agent"

Century 21 - The Debate

The Spot: A title card reads "The Debate." We fade in on a couple standing in their kitchen, arguing about whether to buy a new house. The wife is the aggressor; the husband has his doubts, the wife snapping her head back in a contemptuous "What?!?!". "Suzanne researched this!!" says the wife in exasperation, As we're wondering who Suzanne is, the ad cuts to an image of the couple's kitchen telephone. "This listing is special, John," says the voice of their real estate agent over the speakerphone, who has been listening the whole time to what should have been a delicate private conversation. "You guys can do this." The husband caves. "This is awesome," says the wife. We see a picture of the agent's Century 21 business card.

Last edited by Calix; 08-03-2013 at 07:13 AM..
Reply With Quote Quick reply to this message

 
Old 08-03-2013, 07:09 AM
 
Location: Lexington, SC
4,281 posts, read 10,026,918 times
Reputation: 3695
Getting out the popcorn to sit back with and relax while I read the posts.....
Reply With Quote Quick reply to this message
 
Old 08-03-2013, 07:53 AM
 
Location: DFW - Coppell / Las Colinas
28,944 posts, read 33,269,299 times
Reputation: 34240
All I can talk about is me.

When I work with a buyer I'm 100% working in their best interests and I'm very good at what I do.
The money takes care of itself and although important, it is secondary to the client.

That's why I'm a successful Buyers Agent.
Reply With Quote Quick reply to this message
 
Old 08-03-2013, 07:54 AM
 
Location: Fayetteville, NC
1,490 posts, read 4,935,952 times
Reputation: 1593
Quote:
Originally Posted by Calix View Post
I have not for the most part seen them encouraging them to buy a home that is comfortably under their budget max, encouraging them to take on less debt, and spending less.

Yea.... You should get out more and spend less time trolling.

Have you worked with a lot of buyer's agents? Have you been privy to real conversations between agents and buyers, not stupid TV shows?

That little extra amount of commission I could squeeze out of a buyer would not make up for all the lost referrals I would never get by NOT getting my buyers the best house at the best price for them. There is a whole big country out there outside California. Some of us are still honest and have personal integrity.
Reply With Quote Quick reply to this message
 
Old 08-03-2013, 08:22 AM
 
Location: NJ
17,579 posts, read 37,396,785 times
Reputation: 16071
I've never had an agent try to talk me in to buying any house.
Reply With Quote Quick reply to this message
 
Old 08-03-2013, 08:48 AM
 
Location: Newport Coast, California
474 posts, read 462,095 times
Reputation: 1132
Quote:
Originally Posted by manderly6 View Post
I've never had an agent try to talk me in to buying any house.
In fairness to the OP, the commercial shown was actually produced by Century21, and it shows the buyers agent clealy pushing them into buying a house. I wonder why Century21 would pay for a commercial that didn't reflect their values and business practices. Thus I have to conclude this is more the norm than not.. I remember this commercial because I heard a whole segment on this on NPR. Watching it again I do shudder at the exploitation of people's emotions and relationship demonstrated in this ad.
Reply With Quote Quick reply to this message
 
Old 08-03-2013, 08:59 AM
 
Location: Cary, NC
30,602 posts, read 53,571,551 times
Reputation: 28933
Quote:
Originally Posted by GoldenZephyr View Post
In fairness to the OP, the commercial shown was actually produced by Century21, and it shows the buyers agent clealy pushing them into buying a house. I wonder why Century21 would pay for a commercial that didn't reflect their values and business practices. Thus I have to conclude this is more the norm than not.. I remember this commercial because I heard a whole segment on this on NPR. Watching it again I do shudder at the exploitation of people's emotions and relationship demonstrated in this ad.
The commercial is clearly regrettable as it is so wide open to interpretation.
We don't know what information has been shared between the parties to date. Etc. Etc.

I like doing "Ben Franklin" lists with people, where we list positives and negatives, while looking for the deal-breakers which make any list moot.
But, as a buyers' agent, I know that I have to be careful listing positives about a property with some people. Some folks are over-sensitive to feeling "sold" and interpret any positive as a sales close attempt.
And sometimes it is possible to mark off nearly all the items on their wish list, and still the house is not a fit.
It is a good match when the agent can speak openly with the client and not hold back relevant thoughts, and vice-versa. Unfortunately, even after working together for weeks, the good fit is not always there.
Reply With Quote Quick reply to this message
 
Old 08-03-2013, 10:19 AM
 
Location: Central Texas
19,443 posts, read 35,559,812 times
Reputation: 19889
Quote:
Originally Posted by Calix View Post
I've often wondered about the concept of a buyer's agent. In a real estate deal, both sides are incentivized to get the highest possible sales price to generate the highest possible commission. The seller of course wants to sell for the highest possible and a buyer's agent wants a the largest possible commission, so therefore, the highest price is really the goal for both sides.

Any time I see a realtor, hear stories, even watch shows, the "buyer's agent" is always pushing the person into the most expensive home they can, often times pushing them out of their budget, by "stretching" for something "they really want", not need. I have not for the most part seen them encouraging them to buy a home that is comfortably under their budget max, encouraging them to take on less debt, and spending less.

A very infamous commercial from the height of the housing boom from Century 21 Realty showcases the work of a so called "buyer's agent", effectively bullying a guy into buying a house he can't afford because "it's special".

Suzanne Researched this - Remember, she's the "buyer's agent"

Century 21 - The Debate

The Spot: A title card reads "The Debate." We fade in on a couple standing in their kitchen, arguing about whether to buy a new house. The wife is the aggressor; the husband has his doubts, the wife snapping her head back in a contemptuous "What?!?!". "Suzanne researched this!!" says the wife in exasperation, As we're wondering who Suzanne is, the ad cuts to an image of the couple's kitchen telephone. "This listing is special, John," says the voice of their real estate agent over the speakerphone, who has been listening the whole time to what should have been a delicate private conversation. "You guys can do this." The husband caves. "This is awesome," says the wife. We see a picture of the agent's Century 21 business card.
While I would never try to sell a buyer on a house that is more than they can afford (middle of their comfort range is usually the sweet spot for getting as much of their needs and desires at a reasonable price), I note from viewing the video that there are two buyers in that video, that it is one of the buyers (NOT the buyer's agent) trying to convince the other, granted saying that "Suzanne" has researched this (which is part of the job, giving the buyer(s) all the information they need to make an informed decision), and that the actual objection of the husband is never stated (they can be legion and often have nothing to do with money). So there's a WHOLE lot of assumptions going on based on that video and almost none of the information needed to say what's really going on there other than that the wife wants to buy that particular house, the husband isn't sure (sure, THAT never happens in the real world!), and the agent has provided information that the wife believes says that whatever objection the husband has can be overcome in some way.

Add to that that the difference in commission that the agent actually gets if you have a clue about how commission structure works is minimal and the risk is great of losing many times that in future referrals and future deals with those clients.

OP, your prejudice (and lack of real knowledge) is showing.
Reply With Quote Quick reply to this message
 
Old 08-03-2013, 10:22 AM
 
Location: Meggett, SC
9,854 posts, read 8,213,756 times
Reputation: 5502
There are likely to be many, many denials of this happening from the Realtors on this board. However, I have experienced it myself from agents trying to push a more expensive option simply because I qualified for it. I am the stubborn sort, not easily swayed, so it was a moot point. However, there are agents out there that do actually try and steer their buyers towards more expensive homes, even when the lesser expensive homes can and do meet their criteria. I actually had to get onto one of my agents once for showing me listings that were all well outside the range I wanted to spend. He knew how much I was qualified for and instead used that number. I was clear that if he didn't start showing me homes in my desired range, I would find another agent. As an aside, I tend to buy homes for either cash or much, much less than what I qualify for.
Reply With Quote Quick reply to this message
 
Old 08-03-2013, 10:35 AM
 
Location: Wonderland
38,536 posts, read 30,625,568 times
Reputation: 53516
I've never had a realtor try to manipulate me into buying a house that was at the top of my budget. That being said, many buyers have an unrealistic idea of just what their budget will buy. Many come to the table with a list of must-haves that are clearly going to push the outer limits of their budget.

When I was selling real estate, what I'd do is sit down and look over that list and try interject some common sense about the local market into the conversation on the front end, especially when the buyers weren't being realistic about their expectations. I'd determine whether they were looking for the "deal of a lifetime" or if they were simply willing to pay fair market value for a home. I'd also talk about living within their budget. For instance, my husband and I are qualified up to $500,000 - but there is no way we'd feel comfortable buying a home in that price range. We want to stick to under $375,000. When working with a client, I'd be sure I was very aware of their overall financial situation regarding how much they SHOULD be spending on a home in order to reach their overall financial goals.

Then we'd hit the road. And of course the more expensive the home, the more WOW factor it had (generally speaking - I'm excluding overpriced homes in this conversation). Of course my husband and I are more likely to find a home we love in the $500,000 price range vs the $350,000 price range. So when buyers tell an agent what the top of their price range is, and the agent shows them homes that push that limit, it's not just to line the agents' pocket. It's because they're looking for a home that the buyers will fall in love with - and that's more likely the higher the price, especially when there's a long list of "must haves."

Besides that, a few thousand dollars, or even twenty thousand dollars, just doesn't make that much difference when it comes to what the realtor makes. Say it's a split commission - 3 percent to listing agent and 3 percent to selling agent. Say the broker takes 25% of that commission. The amount of money the agents would pocket on a $20,000 difference in price is only $450.
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Real Estate
Follow City-Data.com founder on our Forum or

All times are GMT -6.

2005-2017, Advameg, Inc.

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32 - Top