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We're planning not to work with one for anything that we can get a Redfin notification on,
Like the OP, we are also looking to purchase in the same kind of areas and are struggling to see what value a buyer's agent brings to the equation. We have informally been "working" with an agent (no agreement signed), in that she sends us MLS listings of houses she thinks might suit, but I'm looking at the listings on lots of different sites every night and I've already seen them by the time we get them from her. I've had a few specific questions on some of the places and on different parts of the purchase process (e.g. about some of the zoning regs and the process of getting vacant possession on a property that also had an apartment over the garage) and her response was that she didn't feel qualified to answer those questions. I ended up finding the answers myself. We haven't put an offer in yet on anything, but have come close on a couple and I've felt pressure to offer quite a bit more than we feel it was worth (and more than what they ended up selling for). At this point, I'm scratching my head as to why we would involve a buyer's agent at all.
The one thing I'm not clear on is the offer/contract document itself. I'm assuming you can only get the CAR standard form through a CA REA, but could you get one through the listing agent? 2-3% of a $1.2 mil sale seems like a lot to pay for a standard form. Or would your only alternative be getting a standard form or drafting a custom offer through a real estate attorney? In any event, a real estate attorney still seems like a cheaper option than a buyer's agent.
I'm not trying to have a go at real estate agents, I'm just trying to figure out if you are proactive in your own house search and background research, what more does a buyer's agent bring to the transaction?
Cloud walker
The reason you want YOUR own agent is because a agent in a position of a dual agent where he works for both the buyer and the seller CANNOT be working in both parties best interest. His fiduciary duty at that point is for both buyer and seller. He may be willing to take less commission but the seller is still gonna want the most amount of money from the buyer.
I would never use a dual agent.
Good luck
We're planning not to work with one for anything that we can get a Redfin notification on,
Like the OP, we are also looking to purchase in the same kind of areas and are struggling to see what value a buyer's agent brings to the equation. We have informally been "working" with an agent (no agreement signed), in that she sends us MLS listings of houses she thinks might suit, but I'm looking at the listings on lots of different sites every night and I've already seen them by the time we get them from her. I've had a few specific questions on some of the places and on different parts of the purchase process (e.g. about some of the zoning regs and the process of getting vacant possession on a property that also had an apartment over the garage) and her response was that she didn't feel qualified to answer those questions. I ended up finding the answers myself. We haven't put an offer in yet on anything, but have come close on a couple and I've felt pressure to offer quite a bit more than we feel it was worth (and more than what they ended up selling for). At this point, I'm scratching my head as to why we would involve a buyer's agent at all.
The one thing I'm not clear on is the offer/contract document itself. I'm assuming you can only get the CAR standard form through a CA REA, but could you get one through the listing agent? 2-3% of a $1.2 mil sale seems like a lot to pay for a standard form. Or would your only alternative be getting a standard form or drafting a custom offer through a real estate attorney? In any event, a real estate attorney still seems like a cheaper option than a buyer's agent.
I'm not trying to have a go at real estate agents, I'm just trying to figure out if you are proactive in your own house search and background research, what more does a buyer's agent bring to the transaction?
Sounds like you need a new agent.
Yes consumers are not entitled to CAR forms as those are written by the REALTOR association for their members. You could hire an attorney to write an offer for you. You can also tell the listing agent that you are representing yourself and wondered if they would send you a copy of the form to fill out for an offer.
Obviously the seller's agent won't be working in my interests, but, for a percentage-based commission, isn't it also in the interests of the buyer's agent for the sale price to be as high as possible as well? What I am trying to figure out is if I have found the property, at that point what is it that the buyer's agent does for us that would be difficult for us to do ourselves? We lived and purchased a home in a jurisdiction where there is never a buyers agent, only an agent acting on behalf of the seller, so we are comfortable dealing with the negotiation and inspections process.
The one thing I'm not clear on is the offer/contract document itself. I'm assuming you can only get the CAR standard form through a CA REA, but could you get one through the listing agent? 2-3% of a $1.2 mil sale seems like a lot to pay for a standard form. Or would your only alternative be getting a standard form or drafting a custom offer through a real estate attorney? In any event, a real estate attorney still seems like a cheaper option than a buyer's agent.
Just to clarify, unless you have an agreement that states otherwise, you are not directly responsible for the buyer agent's commission. Hiring a real estate attorney wouldn't be necessary because the listing agent could just provide that paperwork for you.
Quote:
Obviously the seller's agent won't be working in my interests, but, for a percentage-based commission, isn't it also in the interests of the buyer's agent for the sale price to be as high as possible as well? What I am trying to figure out is if I have found the property, at that point what is it that the buyer's agent does for us that would be difficult for us to do ourselves? We lived and purchased a home in a jurisdiction where there is never a buyers agent, only an agent acting on behalf of the seller, so we are comfortable dealing with the negotiation and inspections process.
Most agents would rather do a good job for their clients, and reap the rewards of having a stellar reputation, than make an extra few hundred dollars on a transaction. A benefit of having a buyer's agent on your side would be their knowledge (though it doesn't sound like you're currently benefiting from that)... having access to more accurate and up-to-date information than what is available to your average consumer is also a plus. Additionally, there are a lot of things that could go wrong in escrow, aside from inspections. Getting all of the proper disclosures on time...helping to make sure your deposit is safe in case something goes wrong...etc. There's a lot more to it than that, but those are what immediately came to mind.
There's nothing wrong with doing it on your own, but if your primary reason is the perceived cost, then you may want to rethink it. More likely than not you will be saving money with an agent on your side.
Obviously the seller's agent won't be working in my interests, but, for a percentage-based commission, isn't it also in the interests of the buyer's agent for the sale price to be as high as possible as well? What I am trying to figure out is if I have found the property, at that point what is it that the buyer's agent does for us that would be difficult for us to do ourselves? We lived and purchased a home in a jurisdiction where there is never a buyers agent, only an agent acting on behalf of the seller, so we are comfortable dealing with the negotiation and inspections process.
Part of your biggest hurdle will be the seller. Some sellers will not want to deal with a buyer with no representation. Ok you know the ins and outs of buying a house. So you won't benefit as much from having a agent. Your issue is gonna be finding a seller and agent who is willing to deal direct with the buyer with no representation. I know the basic house purchase steps. I don't claim to be a realtor. But between my 10 hr normal work day, rentals and trying to spend some time in with my family and do all the other things in life that's just another thing on my plate to deal with. And it's a stressful one. If you're willing to keep track of all the correspondence, paperwork, make necessary calls tracking down things, have your own lender approval deal with the appraisal wait for the lender to ok the purchase and all the required steps in a home purchase feel free to DIY. You know all the steps. However don't expect the seller to discount because you don't have representation. Some sellers see it as a bonus in their pocket. Sure all agents want their commission. Yes there are some agents who are in the mindset the commission is foremost. Those guys don't last long.
I'm not defending RE agents. There are good ones and crappy ones.
Okay, the old thing about "it's in the buyer's agent's best interests for the buyer to pay as much as possible" needs to be addressed again.
Say you're looking at a $225,000 house. Solely for the purposes of figuring, let's suppose the buyer's broker (not the agent) gets 3%. That comes to $6750. If the broker is a national franchise, there will be a franchise fee (let's say $250) taken off the top of that, so $6500 is left. Then take out Errors and Omissions Insurance - let's call it $50 for the transaction, leaving us $6450 to work with,. That is divided up between the broker and the agent, with splits varying, so let's call it 50/50 for ease of computation. That leaves the agent getting $3225, out of which comes taxes, MLS fees, Board membership fees, advertising costs for your house, other things the agent spends marketing your house, etc., etc., etc. - all business expenses that the agent pays, in other words.
Now, if the agent talks you into spending $235,000 on the house just for the sake of increasing their commission, they get an additional
That means the agent gets $3375 out of which to pay all of those things (and, hopefully, eat and have a place to live). In other words, an additional $150, and a client who is mad because they think they got maneuvered into paying too much.
Compare that to the possibility of later handling not only another deal for the same client, but the referrals and word of mouth business that can come from doing a good job for you, which can add up to thousands of dollars of future work. That $150 that the buyer's agent doesn't make today by doing the best job possible for their client and NOT getting them to pay more than the house is worth for their dream home is the cheapest advertising that is available anywhere. Why on earth would an agent throw that away? It not only doesn't make sense from an ethical standpoint, it doesn't make sense from a bottom line standpoint!
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