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But back to my statement, how much could that buyers agent have negotiated in a price reduction?
Real estate agents don't give two scats about negotiation. They just want the deal to happen as fast as possible. If their pay was dependent on how much they save the buyer, or how much extra they net for the seller, it would be a more honest and respectable profession.
The current real estate sales model means successful real estate agents are good networkers. Not good negotiators. Not even good at real estate transactions. It's all about networking. Frat boys and car salesmen are good at networking, too. And they're just about as useful to me in a real estate transaction as a buyer's agent.
Well then Scoop..after reading your ranting on this thread and in the other I just finished watching the same thing from you, I will wave the white flag, ignore your comments and posts, and tell you to have a GREAT DAY.
You pay cash for properties within a bike ride of your house. I would say you may be one of the most knowledgeable buyers out there. 99% of the people can't even compare to what you know about your area. CONGRATULATIONS! Buying your own probably works well. It doesn't for the rest.
Many people are more than happy to have a Realtor that has their best interest in mind.
Well then Scoop..after reading your ranting on this thread and in the other I just finished watching the same thing from you, I will wave the white flag, ignore your comments and posts, and tell you to have a GREAT DAY.
You pay cash for properties within a bike ride of your house. I would say you may be one of the most knowledgeable buyers out there. 99% of the people can't even compare to what you know about your area. CONGRATULATIONS! Buying your own probably works well. It doesn't for the rest.
Many people are more than happy to have a Realtor that has their best interest in mind.
I assume this means you are no longer reading my comments. But for everyone else, just let me say this:
The Realtor generally has the REALTOR'S best interest in mind. The whole game is set up that way. The Realtor wants the buyer or seller to have a good experience, because that's good for networking. But it is counterproductive for a buyer's agent to actually negotiate the lowest price. He or she is paid less. And while the seller's agent is trying to get the highest price possible, getting the deal done fast is more important. Listing is all about volume.
Just about anyone can learn how to buy or sell a house. It's not rocket science, after all. A reasonably bright high school freshman could easily pass the licensing exam. Realtors will tell clients, "I'm here to protect you from making mistakes."
And is there some kind of guarantee if any mistakes are made by the Realtor? If someone buys a house and it falls apart, is the Realtor is going to cut a check for the purchase price? Or, more realistically, if a Realtor is screaming, "Buy! Buy! Buy!" and the housing market falls off a cliff, is the Realtor going to refund the amount the house loses in value?
No. Of course not.
I object to the foundation the whole business is built on. When a lawyer writes a will, he or she doesn't get a 3% cut of the estate. When a doctor saves a life, the patient isn't indebted for 3% of future earnings.
Real Estate should be an hourly profession, like accounting or legal services. The good agents would make just as much as they do now. The fakes, frauds, hucksters, fortune tellers and snake-oil salesmen wouldn't last very long.
So the choice is roll the dice and hope everyone involved in the transaction is ethical, or learn about real estate and avoid being duped.
1. Seller laughs...no they won't accept comp price.
2. Seller laughs.. Not interested
3. Seller requires a buyer to make up difference clause.
4. Seller has fiance who is in LV construction industry and has survived and is armed. .
So you strike out. Not very good at this are you? I will wait a day or so and then tell want happens next.
And seller is quite well willing for buyer to quit at any time. Claims to have more than one cash offer close to list. Probably true.
Gee whiz... I thought some of you RE experts would know just how to handle this...
Our expectations then were a best case 270,000 appraisal. We offered $300,000 with our client putting up the cash to cover the difference between appraisal and price as long as the Appraisal was $270,000 or more.
One point that will become important later. The transaction is still under water. Mortgage payoff and closing costs will run $312,000 or so.
I saw the scenario and then was caught up with the Scoop and reading other threads.
Read your post Scoop, maybe keep reading when you make it more general. What do you do buy the way? My thought is you probably wait for someone to be foreclosed on close to where you live, Scoop in and buy the place, then rent it out to someone for a nice size profit? So, while you don't like Realtors or anything they stand for, you have no problem profiting off the misery of someone else or at the expense of the American taxpayer. Just a thought though. You may actually be a pretty nice guy.
I understand your premise, that an Agent makes more money if the price is higher, because they are paid in commission. While that would be true, don't you think that if it is your job to get the price lower, and you are being paid to do a job, that is what you would do? What about job requirements, ethics, morals, etc...?
You can say what you want about Realtors and people, but I spent the last 26+ years on active duty in the Navy as an Enlisted working man. My word is my bond. If you have dealt with a Navy Chief, I would say you will understand, but I know a lot haven't.
Do I personally like the entire setup, no. I don't that I personally like all of anything. 6% - I am sure it was important in the past before the internet, now I think there are probably room for changes. Good luck with that!
Too bad you just can't buy a Ford, Chevy or Toyota directly from the factory. Too bad you can't buy apples and oranges from the growers, etc... Cut out the middle man in this country and you unemploy millions.
You live in a service industry town. In a way, it's all about Service. If I am hired to get that best deal, that is what I do. Why? Because that is my job, that is the law (FUDICIARY), and it is the right thing to do.
Gee whiz... I thought some of you RE experts would know just how to handle this...
Our expectations then were a best case 270,000 appraisal. We offered $300,000 with our client putting up the cash to cover the difference between appraisal and price as long as the Appraisal was $270,000 or more.
One point that will become important later. The transaction is still under water. Mortgage payoff and closing costs will run $312,000 or so.
So next - Where did the appraisal come in?
Pardon my cynicism but why would anyone offer $30K over comps? Especially in a market that is a total coin flip.
Pardon my cynicism but why would anyone offer $30K over comps? Especially in a market that is a total coin flip.
You are not being cynical. You simply don't understand people or why they buy real estate.
In this particular case they have lusted after that particular model in that particular tract since it was first built. They could not afford it then when it was $550,000. Now they can. This home also happened to be the best of breed with a less than year old $50 grand swimming pool that was also spectacular.
This is a terminal house. They expect to live there until old and grey.
And I don't believe their perception of value was off. I believe the seller could have gotten close to list in cash if her agent had held back a little and not jumped on our financed offering. I also believe it could easily have appraised at close to list if appraisal were done to determine value. The existing rules make an accurate appraisal impossible
I would also note that the seller met with our client and was fond of her. She was not going to make any significant money off the sale and did not really care. She was simultaneously buying a home on the west side at close to a million and was going to rebuild it before moving in...she was not money driven in this value range.
Do you think that Real Estate Broker is making the money they thought they would make on that transaction? Watch this:
Real Estate Broker signs a contract to list a home for sale at 200,000 for a seller for a 7% commission. That broker is looking to make 14000 dollars on this sale, while the seller is looking to get 186,000. The terms are 3% to buyer (6000), 3% to seller (6000) and some transaction fees (MLS -300, E&O 35) etc... This is our basic transaction.
You cut out a buyers agent, now 6% (12000) is sitting there for the Sellers Agent.
Here's the whole problem with your argument.
You start out saying 3% to the seller's agent and 3% to a buyer's agent is a "basic transaction" and all involved are fine with that. But as a buyer, if I happen to choose to not use an agent (which keep in mind is a decision beyond the control of the seller's agent), and essentially act as my own buyer's agent, doing all my own research, traveling on my own from house to house to inspect, etc, and the seller's agent has no more duties than if I had contracted with a buyer's agent of my choosing, you are arguing the seller's agent should now get paid 6% for the same work he was originally fine with getting 3% pay. Why should the seller's agent get paid double for no reason other than I happened to decide to do my own leg work as the buyer? You are arguing the seller's agent should get paid for work that I did.
Quote:
Originally Posted by gulfer
Big question: Let's say you paid selling price of 200,000. Broker still got thier 14,000 from the seller because they have a contract to list the home for 7%. Seller agent received 6,000 in commission, who received that 3% that you didn't pay a buyers agent?
That's easy. It goes to the buyer. He did the leg work for himself that the buyer's agent traditionally would have done for him, and he's thus entitled to the compensation allocated for that work. Suppose a homeowner fixes a plumbing problem himself instead of calling a plumber. Who gets the money that would have gone to pay for the plumber's labor? Same thing. You're simply upset that some people prefer to take a DIY approach and save money instead of hiring you to do the work for them, or are smart enough to prevent you from being paid double as a seller's agent for no additional work or any other valid reason.
Quote:
Originally Posted by gulfer
If you saved money Scoop, I am happy for you. But if that buyers agent could have saved you 5,000 on the purchase price, say you pay 195,000 it could be viewed as the same.
But if you think you saved that 3%, it went to someone unless you made a deal to have them give that directly to you (all legal). Again, I say good for you. But back to my statement, how much could that buyers agent have negotiated in a price reduction?
You present no evidence or valid reason that a RE agent could negotiate a better price than the buyer could get for himself. "What if's" are worthless speculation. I could just as easy argue what if the buyer could get a $5000 better price than an agent in addition to saving commission.
In fact I would argue that the buyer likely would often negotiate a better price than an agent. The agent has a conflict of interest (unless he is working by the hour) because the higher the price, the more he makes. When there is a gap between the bid and offer, the agent has more incentive to try to get the buyer up compared to getting the seller down. There is also often inefficient communication in negotiations when middle men are involved, which could even be intentionally caused by a middleman if it happens to be in his own best. The buyer's agent also has financial incentive to try to smooth over or downplay any defects or problems that might cost the buyer more down the road.
Granted, not everyone is cut out for DIY real estate just as not everyone should attempt DIY plumbing. But there is nothing wrong with it for those qualified and it does save substantial money for those comfortable with it.
This thread is reopened. The discussion in this topic is important, but:
1) stay focused on the topic, which is the Las Vegas real estate market. 2) discuss the topic, not other posters. 3) avoid the sniping back and forth, (with or without pictures for illustration) which would totally frustrate a new person reading the thread actually trying to get information. 4) don't post links, even relevant ones, without some comment about the linked article to further the discussion.
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