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.
First thing out of the listings agents mouth should have been "are you working with an agent?". Hopefully you didn't give them too much information.
Get a buyers agent and make sure you let them know what the listing agent already knows.
If you've found the house you want, what do you need an agent for? Make no mistake about it, retaining an agent is going to cost you thousands of dollars. Because the seller pays the fees, agents pretend that it doesn't cost the buyer anything to have representation. But there's no reason you can't negotiate to get credit for the 3% of the sale price that your agent will make.
If you want to know whether you're overpaying, you don't have to spend 3% of the purchase price to find out. Appraisers don't cost anywhere near that much, and even a property value assessment from an agent shouldn't be that expensive. Don't fall for the agents' typical BS - that unless you have an agent with access to MLS, you have no idea of what the house you're about to buy should be worth. By having an agent, you're already overpaying by 3%.
If you've found the house you want, what do you need an agent for? Make no mistake about it, retaining an agent is going to cost you thousands of dollars. Because the seller pays the fees, agents pretend that it doesn't cost the buyer anything to have representation. But there's no reason you can't negotiate to get credit for the 3% of the sale price that your agent will make.
If you want to know whether you're overpaying, you don't have to spend 3% of the purchase price to find out. Appraisers don't cost anywhere near that much, and even a property value assessment from an agent shouldn't be that expensive. Don't fall for the agents' typical BS - that unless you have an agent with access to MLS, you have no idea of what the house you're about to buy should be worth. By having an agent, you're already overpaying by 3%.
Well.. I would agree with your statement..but it's hogwash.. and let me explain why.
When a house is listed a commission is agreed upon. For argument sake lets say the commission is 6%. That 6% gets paid when the house sells..NOW... if the house is sold to a customer with a COOPERATING Broker OR a Buyer Broker.. the Listing Broker agrees to split the commission with any Buyer Broker or Cooperating broker and that percentange is whatever the homeowner agrees to in the listing. . So lets say that the listing broker agrees to share 50% of the commission with any outside broker/agent.. so that would be 3%....
That entire 6% comes out of the sale of the home..
A buyer can not walk into a listed home and purchase the house and expect to save that 3% for themselves.. the customer is NOT entitled to any portion of the sales commission (unless the customer buying the home is an agent themselves in that state and is actively working under another broker.. in which case it falls under the listing agreement where Buyer broker gets 50% of the 6% sales commission).
In that case the customer walking into the home and buying the home becomes the customer of the listing agent...
ANd being a "customer" does NOT mean that there is dual agency. There is a difference between Client and Customer distinctions.. the CLIENT has the agents fiduciary responsibility whereas the customer, while being treated fairly as such, does not get the fiduciary duty of the agent. BUT, the agent hears and presents that buyers offer to her seller..
AND .. that listing agent IS negotiating DIRECTLY with the buyer FOR the seller.. in the sellers best interest. The full 6% commission gets paid to the broker (I say not agent because all agents work under their brokers and whatever they get gets split between th agent and the broker).. But basically the agent then has two sides of the transaction.
Its important to note as well. that just becasue an agent shows you houses and takes you to a house they haven't listed or isn't listed by their office, they are STILL working in the best interest of the SELLER UNLESS and UNTIL a BUYER AGENCY agreement is signed...
This is not true in all states.. it's true in NY and probably NJ and some others.. FL is a transactional state.. each state has different agency laws.. BUT regardless ..it should all be explained to you the INSTANT you make contact as a buyer with an agent.
If you've found the house you want, what do you need an agent for? Make no mistake about it, retaining an agent is going to cost you thousands of dollars. Because the seller pays the fees, agents pretend that it doesn't cost the buyer anything to have representation. But there's no reason you can't negotiate to get credit for the 3% of the sale price that your agent will make.
If you want to know whether you're overpaying, you don't have to spend 3% of the purchase price to find out. Appraisers don't cost anywhere near that much, and even a property value assessment from an agent shouldn't be that expensive. Don't fall for the agents' typical BS - that unless you have an agent with access to MLS, you have no idea of what the house you're about to buy should be worth. By having an agent, you're already overpaying by 3%.
Naptowner, please read TristansMommy's post(#13) as she is 100% correct. Your statements are not only incorrect but do a disservice to buyers who are making the biggest investment of their lives, especially if they don't understand the process. There are a small percentage of buyers who have had previous experience buying, understand the process thoroughly, and who may not need representation. However, for the majority of buyers, the risk of not having representation not only is to high but makes no sense.
If you've found the house you want, what do you need an agent for? Make no mistake about it, retaining an agent is going to cost you thousands of dollars. Because the seller pays the fees, agents pretend that it doesn't cost the buyer anything to have representation. But there's no reason you can't negotiate to get credit for the 3% of the sale price that your agent will make.
If you want to know whether you're overpaying, you don't have to spend 3% of the purchase price to find out. Appraisers don't cost anywhere near that much, and even a property value assessment from an agent shouldn't be that expensive. Don't fall for the agents' typical BS - that unless you have an agent with access to MLS, you have no idea of what the house you're about to buy should be worth. By having an agent, you're already overpaying by 3%.
I couldn't agree more....that is how I save my money too.....the b.s. over "the seller is paying"....well every person with a brain knows that the buyer is paying in the end since the money comes from the buyer.
That is just a stupid as thinking that we aren't paying for all the advertising in grocery stores...we the customers are paying that and it is all incl. in the sales price.
If you have no clue what you are doing than take the help of an agent and make sure you have a good one. (interview a couple and don't fall for the hot air), otherwise have a real estate lawyer go over the contract which cost aprox. $ 150.- for having the contract checked out. Save the rest to use for the home inspector......and keep in mind that you are willing to walk away if the price is not what you like or can afford. This morning the numbers showed that more homes came on the market with lower prices
I couldn't agree more....that is how I save my money too.....the b.s. over "the seller is paying"....well every person with a brain knows that the buyer is paying in the end since the money comes from the buyer.
That is just a stupid as thinking that we aren't paying for all the advertising in grocery stores...we the customers are paying that and it is all incl. in the sales price.
If you have no clue what you are doing than take the help of an agent and make sure you have a good one. (interview a couple and don't fall for the hot air), otherwise have a real estate lawyer go over the contract which cost aprox. $ 150.- for having the contract checked out. Save the rest to use for the home inspector......and keep in mind that you are willing to walk away if the price is not what you like or can afford. This morning the numbers showed that more homes came on the market with lower prices
Yes.. in the end the buyer is kidn of paying becaues it is figured into the cost of the house and that house is paid for by funds borrowed by the seller..
The only true way for buyers to "save" money.. or basically save the 6% belowe market value (because all homes that are "market value" are homes that have sold and since most homes are sold thruogh agents iwth commissions paid then it is fair to say that "market value" includes the commission worked in) is to go directly to a FSBO...
Ah.. but then here's the problem.. the FSBO they want to save themselves the commission.. in otherwords.. they want to get full market value for their home and not give the 6% (just a number for example sake) to the agent..
So.. here you have a seller that wants to save themselves the 6% but hte buyer wanting the same thing.. and the numbers don't match..
Most people that buy FSBO are usually seasoned at buying a home (cause they've done it before) and are comfortable negotiating for themselves if they do.. so usually the FSBO buyer probably wins..
Which basically leaves the seller selling for less (and they, on average sell for more than 6% less!! than a listed home) in double the time doing all the work and advertising for themselves..
So... while a lot of people thing of Realtors..well all those negative things they think.. the bottom line is most (yes not all are reputable, etc) are professionals who know what they are doing and whose goal it is to get the BEST results for their client (wether their client is the seller or the buyer). You wouldnt' go to court and plead a case without an attorney,so why go to a Real Estate negotiation without a Realtor .. .. and no, that's not saying that a Realtor is equivelant to an attorney by any means.. but it's simply stating the obvious.. something as important as court needs to be handledby a a good professional (hey there are bad attorneys out there as well.. there are bad doctors, plumbers, carpenteres.. etc.) and so does a Real Estate transaction (including , as we all know now.. the mortgage aspect of the transaction as well!)
Well.. I would agree with your statement..but it's hogwash.. and let me explain why.
When a house is listed a commission is agreed upon. For argument sake lets say the commission is 6%. That 6% gets paid when the house sells..NOW... if the house is sold to a customer with a COOPERATING Broker OR a Buyer Broker.. the Listing Broker agrees to split the commission with any Buyer Broker or Cooperating broker and that percentange is whatever the homeowner agrees to in the listing. . So lets say that the listing broker agrees to share 50% of the commission with any outside broker/agent.. so that would be 3%....
Right, so we're on the same page. 6% or so of the purchase price of the house goes to the listing broker, and if there's a buyer's agent, each agent gets half of it.
Quote:
That entire 6% comes out of the sale of the home..
A buyer can not walk into a listed home and purchase the house and expect to save that 3% for themselves.. the customer is NOT entitled to any portion of the sales commission (unless the customer buying the home is an agent themselves in that state and is actively working under another broker.. in which case it falls under the listing agreement where Buyer broker gets 50% of the 6% sales commission).
Here's where you're completely missing the point. The buyer is not asking for a portion of the sales commission. The buyer is asking for a price reduction due to the fact that there is no buyer's agent to receive the 3% or so of the purchase price.
Quote:
In that case the customer walking into the home and buying the home becomes the customer of the listing agent...
ANd being a "customer" does NOT mean that there is dual agency. There is a difference between Client and Customer distinctions.. the CLIENT has the agents fiduciary responsibility whereas the customer, while being treated fairly as such, does not get the fiduciary duty of the agent. BUT, the agent hears and presents that buyers offer to her seller..
AND .. that listing agent IS negotiating DIRECTLY with the buyer FOR the seller.. in the sellers best interest. The full 6% commission gets paid to the broker (I say not agent because all agents work under their brokers and whatever they get gets split between th agent and the broker).. But basically the agent then has two sides of the transaction.
Sorry, you don't understand the legal concept of agency. That's not how it works. An agent has a principal (what you call a client), in this case the seller for whom the agent is working. The buyer is the PRINCIPAL'S customer, not the agent's. The agent is the one who has to deal with the buyer, but there is nothing about that relationship that creates any duty on the part of the agent to the buyer. The agent may have duties imposed under state law that go hand in hand with his or her licensure (duty of good faith, etc.), but of course there is no fiduciary duty - that's a byproduct of the agency agreement. The agent doesn't have "two sides of the transaction." It has the duty TO THE SELLER to transmit offers made by prospective buyers. There is no reason the buyer should have to pay the seller's agent a cent.
Quote:
Its important to note as well. that just becasue an agent shows you houses and takes you to a house they haven't listed or isn't listed by their office, they are STILL working in the best interest of the SELLER UNLESS and UNTIL a BUYER AGENCY agreement is signed...
This is not true in all states.. it's true in NY and probably NJ and some others.. FL is a transactional state.. each state has different agency laws.. BUT regardless ..it should all be explained to you the INSTANT you make contact as a buyer with an agent.
Which is true, but that doesn't have anything to do with the fact that you can negotiate the purchase price of the house based on the fact you don't have an agent.
Naptowner, please read TristansMommy's post(#13) as she is 100% correct. Your statements are not only incorrect but do a disservice to buyers who are making the biggest investment of their lives, especially if they don't understand the process. There are a small percentage of buyers who have had previous experience buying, understand the process thoroughly, and who may not need representation. However, for the majority of buyers, the risk of not having representation not only is to high but makes no sense.
Actually, I think I'm doing people a big service. I know there are a lot of realtors on the site and you folks don't like it when someone points out the economics involved, but I stand by everything I said. Honestly, can you not see that in the end, the buyer is paying both agents and can legitimately negotiate the purchase price based on the lack of an agent? Are you really claiming agents never agree to concede part of their fee? Everything is negotiable.
Right, so we're on the same page. 6% or so of the purchase price of the house goes to the listing broker, and if there's a buyer's agent, each agent gets half of it.
Here's where you're completely missing the point. The buyer is not asking for a portion of the sales commission. The buyer is asking for a price reduction due to the fact that there is no buyer's agent to receive the 3% or so of the purchase price.
Actually you are missing hte point NO MATTER WHAT THE HOUSE SELLS FOR ..REDUCED, NOT REDUCED.. 6% IS WHAT IS TAKEN OUT. Simply because a buyer walks in without an agent doesn't mean that they are going to get the house for 3% les... because at the 3% less price 6% is still being paid to the listing broker!
It does not work that way.. want to save on market price and pay below that.. then go buy a FSBO listing where there are no commissions paid.. but good luck with that because the FSBO wants to get MARKET VALUE.. which market value already has the commissions worked into the sales price since a majority of the homes sold were sold through listing agents and the MLS.
Sorry, you don't understand the legal concept of agency. That's not how it works. An agent has a principal (what you call a client), in this case the seller for whom the agent is working. The buyer is the PRINCIPAL'S customer, not the agent's. The agent is the one who has to deal with the buyer, but there is nothing about that relationship that creates any duty on the part of the agent to the buyer. The agent may have duties imposed under state law that go hand in hand with his or her licensure (duty of good faith, etc.), but of course there is no fiduciary duty - that's a byproduct of the agency agreement. The agent doesn't have "two sides of the transaction." It has the duty TO THE SELLER to transmit offers made by prospective buyers. There is no reason the buyer should have to pay the seller's agent a cent.
AGain.. YOU are the one not understanding real estate and commissions.. The total commission.. wether there is a cooperating or buyers broker involved is 6%.. end of story.. it's never going to be LESS Than the % written into the listing agreement no matter what..
Yes.. I was speaking from an agetns view of "both sides of the transaction"What I simply meant was that the listing brokers office then gets to keep the full 6% commission rather than having to shrae it with an outside or cooperating broker/buyer agent and so that 6% gets split by the broker and the listing agent (where as if there were an outside broker than 3% would be split between the two). And the compensation aspect of it was "having both sides of th transaction" is what I was referring too. I'm well versed on agency laws and where and with who the fiduciary duties lie with and what the difference is between a client and a customer.
It simply is the commission is what it is! Of course every agent would like to sell their own listing to their own customers so that they get a bigger peice of th ecommssion pie.. but the truth of the matter is most sales are done through cooperating brokerage..that is why the MLS is so effective.. because when you're on the MLS you are not only getting the benefit of the listing agents base of customers, but also another agnets base of customers.
Which is true, but that doesn't have anything to do with the fact that you can negotiate the purchase price of the house based on the fact you don't have an agent.
Of course you can go in without an agent and negotiate..not saying you can't.. BUT it's not going to save you a dime by NOT being represented. Actually you may have better chance of a better negotiationif you ARE represented because the agent representing you(as a buyer broker ONLY) can give you real time sales comps from just last week (and in a fast changing market,yu need that information!). My point is you're not putting yourself in any better a position by not working with an agent as a buyers broker..
And no matter WHAT you do, when you negotiate directly with the listing agent.. you won't be saving yourself any money as you seem to think.. becaues again.. no matter what price is negotatiated 6% (or whatever agreed listing commission was) will come off the top.
My husband and I are looking to purchase our first home in NJ. We looked at a couple properties and have one that we are interested in. When we visited, we went by ourselves and also spoke briefly afterwards to the listing agent about our interest in the property. We didn't bring a broker but were not asked at any point if we were working with one.
If we are interested in getting one now to help us through the negotiation and closing process, can we still bring one in? Or is it too late if you don't bring one with you the first time to see the house?
Thanks in advance
According to the OP, who is a first time buyer, I do recommend some sort of representation. As other posters indicated, once you have experience about how the process works, you can try your hands on negotiating yourself. You definitely want someone with the ability to pull recent comps in this ever changing market and someone with thorough knowledge of the area if you are not from there.
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.
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.
