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Likewise, a realtor is not a replacement for a lawyer. If you have legal issues that escalate, you'll be paying your attorney regardless of whether or not you have an agent. It's unethical and perhaps illegal for an agent to suggest that they provide a replacement or alternative to services provided by an attorney. If an agent suggests that their services will decrease your legal bill, run and report. Misleading information.
No, a licensed real estate agent is not a replacement for a lawyer but, in reality, most states allow a real estate agent to perform services which otherwise would be considered the practice of law. It is only in the context of providing real estate brokerage services that agents are allowed to assist others in filling out legal documents for a fee. A few states require real estate lawyers to be a part of a real estate transaction perhaps because they don't want agents crossing that legal line on their own. Unfortunately, there are a number of gray areas in terms of the "legal" services provided by an agent. I think a number of agents cross the line when they are involved in writing contracts for others when the house wasn't first the subject of a listing agreement--but very few agents seem to be taken to task for doing so (and maybe some states actually allow that practice, if a listing agreement is subsequently signed).
Quote:
Originally Posted by just_because
It's a fair point that if you wish to engage buyer's agents, there is a ransom to pay. Even agents will tell you that "bringing buyers" to homes for sale is the smallest part of their job these days.
I don't say that. Granted, there is a lot of work that needs to be done after a contract is executed, but I still think the most important job of an agent is bringing the parties together. And I would not call getting paid for that work as "ransom". It is a valid fee for services that no one is obligated to pay. (By the way, if you didn't realize it, your obvious bias seriously discredits many of your posts.)
Quote:
Originally Posted by just_because
It's unethical and perhaps illegal for an agent to suggest to you that buyers will reduce their offers or be willing to pay 6% less than if agents were involved. It's a very dangerous claim to say that you will get 350k if you use an agent but only $330k if you don't. This is a shameful claim, it's misleading and it's misrepresentation.
It is common knowledge that many Buyers want to save money by buying a FSBO. A friend of mine sold his house FSBO and the first thing that the Buyer asked for was a reduction in price commensurate to the amount of what a commission would have been. My friend agreed to it, but kicked himself afterwards for giving away the "savings". I think that there is a natural inclination for many Buyers to try to get a deal on FSBO properties--how much so is anyone's guess.
No, a licensed real estate agent is not a replacement for a lawyer but, in reality, most states allow a real estate agent to perform services which otherwise would be considered the practice of law. It is only in the context of providing real estate brokerage services that agents are allowed to assist others in filling out legal documents for a fee. A few states require real estate lawyers to be a part of a real estate transaction perhaps because they don't want agents crossing that legal line on their own. Unfortunately, there are a number of gray areas in terms of the "legal" services provided by an agent. I think a number of agents cross the line when they are involved in writing contracts for others when the house wasn't first the subject of a listing agreement--but very few agents seem to be taken to task for doing so (and maybe some states actually allow that practice, if a listing agreement is subsequently signed).
I don't say that. Granted, there is a lot of work that needs to be done after a contract is executed, but I still think the most important job of an agent is bringing the parties together. And I would not call getting paid for that work as "ransom". It is a valid fee for services that no one is obligated to pay. (By the way, if you didn't realize it, your obvious bias seriously discredits many of your posts.)
It is common knowledge that many Buyers want to save money by buying a FSBO. A friend of mine sold his house FSBO and the first thing that the Buyer asked for was a reduction in price commensurate to the amount of what a commission would have been. My friend agreed to it, but kicked himself afterwards for giving away the "savings". I think that there is a natural inclination for many Buyers to try to get a deal on FSBO properties--how much so is anyone's guess.
I agree with most of this.
For the legal point, I still think that it's very dangerous from an ethical perspective to suggest that you save on legal costs when you use an agent. And the post in question went even further by using a scare tactic that if there is a legal issue and you're FSBO, your legal costs can spiral. An agent provides absolutely no protection for avoiding spiraling legal costs due to an unforeseen and significant legal problem. It's an unethical claim and honest agents should react strongly against any such misrepresentation.
I agree with you on my choice of words with regard to 'ransom'. I should not have used that word. Agents for the most part do work hard for their fees. I have no problem with that. In my defense, the context was about accessing buyers. When it feels like a "pay to play" kind of situation (as in the old days when buyers had to go to agents to even know what's for sale) or in markets where buyers are all sitting behind buyer's agents and there is an environment where you do have to "pay to play" or you'll simply have no buyers, i.e. pay for unblocking access. Either way, you're right in that it undermines my points of view and I take your feedback on board.
I have to differ on the money saving point. Of course your agent can get you more money for your house in some cases. In other cases, you can save money and net more by selling it yourself. I would never support a representation that you generally net more $ with FSBO. Likewise, it's simply unethical to REPRESENT agent services as making you more money in the end. Unless there is reliable data to back that up, you simply can't make those kinds of representations. This has been well discussed and the studies comparing sales prices for FSBO vs agents do not support statements that you will net out more with an agent or even that your sales price will be more. Anecdotal cases like your friend's situation do not mean you can REPRESENT agent services as making you more money. You might have a friend whose cancer went away after meditation treatment but this does not mean that people can ethically or legally represent meditation treatment as a cure for cancer. All ethical business people need to understand the gravity of making general claims about their products or services. This poster went even further in quoting specific sales price figures that the OP could expect with an agent vs without one. There is absolutely no basis for those claims. I'm sorry but that's shameful and major misrepresentation if it were an agent making claims like that.
Tried to.... Buts really a dangerous thing to do. There are too many things that can go wrong.
For example my son tried to buy a house with a realtor from a Trust. Turned out that just by dumb luck her paid for a survey of the property, and found that the Trust was selling the driveway in as if it belonged to the house. it is actually owned by the neighbor.
Over the years, I have sold 2 homes without the aid of a real estate agent. Both went pretty well.
You were lucky. If either of the buyers had been dishonest in any way, you could have found yourself up the creek. It costs only just a bit to pay a per diem rate to have a real estate attorney go over the paperwork.
Pay the realtor , don't sell it by owner. The real estate agent will bring a prequalified buyer , can you prequalify someone for 350k? Too much can go wrong. This is exactly why I will never live in an expensive home ever again. I just sold two home in Colorado these past four years and I got quite educated. Every time I see someone buy a 400k home I think my God, it will cost minimum 20k to sell it that's if your lucky . Good luck!
First one, two houses on one lot. Messed around with realtors who pressured us to take lowball offers. Finally sold it ourselves (after the agent contract expired) by putting an ad in the Sunday paper in the nearest large city 75 miles away. Sold both houses at once to one family. Very easy. (long time ago)
Second one, we talked to an agent and she said how much we should ask for it. We decided to try it ourselves and just put an ad on the local listserv. Second person who saw it wanted it and paid full price. When we called the agent to tell her, she said, "Oh, I think I could have got you more." Right, and it would have all gone to her commission.
We used a local small-town lawyer, I believe we paid less than $500. It was a case where we valued selling it quickly over getting top price. It was an unusual property, a very small house on a fantastic large piece of land. Turned out to be just what the buyer wanted.
I'm thinking it would be more beneficial financially when we're ready to sell
We are the first owners and the house will only be about 15 or 16 years old when we sell. I would hire a professional photographer at about $200. Id have a company add my home to the MLS for $100 to $200. Id probably post on Zillow and possibly another real estate site and then I'd hire a real estate attorney for around $500 to 750.
Granted there's nothing wrong with the home and after an inspection it seems like it could be a good decision. I would maybe add a $2000 dollar cash offer to any realtor that brings a buyer.
So if I sold my own home I could probably do it for about $3500.
Better than paying $21,000(6% realtor fee) on a $350,000 sale!
And you need to pay buyers agent commission to hang realtor that may bring a buyer...approx 3 percent.
You also need to stage it, and be present for showings, and advertise it...ie flyers and print media.
In addition, you would want to know how to prequalify buyers, which lenders do "good" preapprovals that help avoid deals falling apart right before closing, understand disclosure laws, and understand fair housing laws. Even making a statement like "we don't have many minorities here" can be a problem.
I've sold a couple of homes on my own in unique situations (neighbor and personal marketing). In a relatively hot market, a knowledgeable seller can do okay with a FSBO. But, there are a lot of RE market dynamics and potential pitfalls that make FSBO sales risky or at least less profitable and more problematic, for less experienced sellers.
I believe the added exposure/traffic, lower aggravation and greater pricing leverage often afforded by a realtor is well worthwhile. One problem with a FSBO is that both the seller and the buyer expect to 'save' the same RE commission!
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