Buyer Agent - What true value do they bring? (short sale, apartment)

[maggiekate]

Originally Posted by G-fused

What a sham.

I seem to recall back in the early seventies you could take a course and just get a broker license. I guess later the law got changed. The test also was lots of math and hard questions-

[timberline742]

I have to figure these agents are also doing lots of work they're never paid for. If I don't end up buying a place with the dude I'm working with in Providence after he shows me a half dozen places, that's time not compensated for. That time/cost has to be covered somewhere.

[sal1181]

plus taxes and health insurance which is higher for self employed people

[sal1181]

Originally Posted by timberline742

I have to figure these agents are also doing lots of work they're never paid for. If I don't end up buying a place with the dude I'm working with in Providence after he shows me a half dozen places, that's time not compensated for. That time/cost has to be covered somewhere.

You are correct! I have shown clients 20 plus homes before they have found the one. Also there are times they decide to wait. Just this past Sunday I had 3 showings arranged with a buyer who did not show up because they overslept. No call or text at all. All that time counts.

[boshyd]

Originally Posted by confuseddesi

This. exactly my point.

Also, I mentioned in one of my other replies on this thread.

I could be the agent and the home can be on my wife's name?

Overall, based on the replies so far at least - I haven't seen what a buyer agent does that I cannot do on my own on zillow or redfin.... I still feel that they are overpaid for the few hours they spend on my case. - Almost as costly as lawyers ?!!! (if they don't have to show many houses around)

You can have a relative act as agent but it becomes messy when they have to file taxes on their income while you expect them to part with the commission in cash. Maybe with spouse you can work this out, but others, I don't know.

About your question if it is worth 36K or not...first of all like I said sellers are becoming savvy and negotiating 4-5% these days. If some seller is still stuck at 6%, then it's probably worth 36K for them or are not savvy enough. Upto them.

What some of you are suggesting is that there is a need to bring disruption to the industry to bring the agent % lower because of all the technology advances. I would say this is already happening. Fees are getting lowered from traditional 6% to 4%. Discounted brokerages are in operation, etc. All these things happen gradually. If you are not happy with where the market is at with regards to these things you always have option of trying to find a seller who will work with you directly, but good luck finding them.

[chicagoliz]

Even if you were somehow able to get around the legal/ethical issue that was pointed out upthread, this seems like a tremendous amount of work and effort for relatively little gain. You're not even really seeking to save money, but to get money to which you would not otherwise be entitled. Sellers who have a real estate background sometimes do this - they are actually saving some money. Here, you're the buyer and you're not actually paying anything. You're essentially looking for a kickback. (And if your wife is the buyer, and the sole mortgagor, do you plan to qualify based on her salary alone?)

It is helpful to have an agent as a buyer. The MLS listings are more up to date than those on the regular sites. And, as has been pointed out, agents (good ones, anyway) have a lot more information about the market and the area. They can also do a lot of things that make the closing go more smoothly and quickly. You get all this without paying anything.

People always look at RE agents and think they get too much money. But this is their job -- how they earn a living. They spend a heck of a lot of time doing work for which they are not compensated. Sure, some of them earn a ton of money. But a great many more earn very little.

[confuseddesi]

Originally Posted by chicagoliz

Even if you were somehow able to get around the legal/ethical issue that was pointed out upthread, this seems like a tremendous amount of work and effort for relatively little gain. You're not even really seeking to save money, but to get money to which you would not otherwise be entitled. Sellers who have a real estate background sometimes do this - they are actually saving some money. Here, you're the buyer and you're not actually paying anything. You're essentially looking for a kickback. (And if your wife is the buyer, and the sole mortgagor, do you plan to qualify based on her salary alone?)

It is helpful to have an agent as a buyer. The MLS listings are more up to date than those on the regular sites. And, as has been pointed out, agents (good ones, anyway) have a lot more information about the market and the area. They can also do a lot of things that make the closing go more smoothly and quickly. You get all this without paying anything.

People always look at RE agents and think they get too much money. But this is their job -- how they earn a living. They spend a heck of a lot of time doing work for which they are not compensated. Sure, some of them earn a ton of money. But a great many more earn very little.

While I posted a few posts above that I now understand the work involved.

I do not agree at all with the BOLDED sentences above. It is the industry's way of masking who actually pays the commission. When you say buyer does not pay anything...

Think about it - who is actually paying ALL of the funds here in the transactions? So, please don't bring the - buyer does not pay anything here thought process.

The buyer actually is paying the COST OF THE HOUSE + COMMISSION

All I started the conversation with was why can't I do this -

COST OF THE HOUSE + COMMISSION FOR SELLER + BROKERAGE FEE + BUYER COMMISSION (which would be the buyer himself if licensed)

[Aara5]

Maybe you could try it and let us all know how it goes

[chicagoliz]

Originally Posted by confuseddesi

While I posted a few posts above that I now understand the work involved.

I do not agree at all with the BOLDED sentences above. It is the industry's way of masking who actually pays the commission. When you say buyer does not pay anything...

Think about it - who is actually paying ALL of the funds here in the transactions? So, please don't bring the - buyer does not pay anything here thought process.

The buyer actually is paying the COST OF THE HOUSE + COMMISSION

All I started the conversation with was why can't I do this -

COST OF THE HOUSE + COMMISSION FOR SELLER + BROKERAGE FEE + BUYER COMMISSION (which would be the buyer himself if licensed)

Well, the buyer doesn't. Sellers pay it as the cost of selling a house with a broker. You could find a seller who is not going through a broker. Some people do this. Go through facebook pages in groups affiliated with the towns you're interested in and tell people you know in those towns that you are looking to buy a home there and if anyone they know wants to sell, they could contact you

If you wanted to, you could make an offer that would be whatever you determine the commission would be taken off of the purchase price. The seller might or might not accept it.

Not everything is nefarious.

[MikePRU]

Originally Posted by gf2020

What you are proposing is not allowed by MA law. You can't represent yourself as a real estate salesperson.

254 CMR 3.00: Professional Standards of Practice

(6) Salespersons Cannot Be Self-Employed. A licensed salesperson must be engaged by a licensed broker and a licensed salesperson shall not conduct his own real estate business.

You're misinterpreting what the website says. It's 100% legal for an agent to represent themselves in a real estate transaction. The section you quoted states that someone with a real estate salesperson's license cannot be "self-employed" or cannot "conduct his own real estate business" meaning they cannot open their own brokerage. If you have a salesperson level license then you must "hang" your license with someone who has a broker's license. This is what that section deals with. It has nothing to do with acting as your own real estate agent.

Originally Posted by Boston_Burbs

It is a sham but look at how much crap Redfin has gotten from the realtor association. They are like the tesla of real estate. Much like malls, blockbuster, insurance agents, taxi drivers, car dealers, etc I am sure not going to cry for them when innovation puts them out of business.

I said above that my buyers agent helped me but in real life I negotiate terms much more than my house was for, yet I cannot talk to the other party face to face? Everything is made out to be such a bigger deal and more sensitive than it really is.

I'd love to know what crap Redfin has gotten from NAR.

Also, it's an incredible stretch to call Redfin the Tesla of the real estate industry. They don't do things all that different from anyone else. They offer a lower level of service for a lower commission rate. Not so revolutionary.

Originally Posted by maggiekate

I seem to recall back in the early seventies you could take a course and just get a broker license. I guess later the law got changed. The test also was lots of math and hard questions-

It's definitely not the 70's anymore.

There are two types of license now - Salesperson and Broker. To get a salesperson's license you need to take X number of hours of a pre-licensing course. Then you sit for the test which has some math and some legal questions - nothing earth shattering. After you hang your salesperson's license with a broker for 3 years you can then take the pre-licensing course for a Broker's license and after that sit for the test. If you pass, you have to take out a bond. The big thing with having a broker's license is that you can open up your own shop.

Originally Posted by timberline742

I have to figure these agents are also doing lots of work they're never paid for. If I don't end up buying a place with the dude I'm working with in Providence after he shows me a half dozen places, that's time not compensated for. That time/cost has to be covered somewhere.

That happens. There are countless threads over in the real estate forum about commissions. The system we have is no great, but I'm not sure it will ever change. The consumers like it because they don't have to pay anything unless a transaction occurs.

Originally Posted by sal1181

plus taxes and health insurance which is higher for self employed people

Don't even get me started. Self employment taxes are murder and people on this forum would soil their undies if they knew what I paid for health insurance every month. If you get health insurance from your employer, you should kiss their backside every day and thank them for it.

Originally Posted by boshyd

You can have a relative act as agent but it becomes messy when they have to file taxes on their income while you expect them to part with the commission in cash. Maybe with spouse you can work this out, but others, I don't know.

About your question if it is worth 36K or not...first of all like I said sellers are becoming savvy and negotiating 4-5% these days. If some seller is still stuck at 6%, then it's probably worth 36K for them or are not savvy enough. Upto them.

What some of you are suggesting is that there is a need to bring disruption to the industry to bring the agent % lower because of all the technology advances. I would say this is already happening. Fees are getting lowered from traditional 6% to 4%. Discounted brokerages are in operation, etc. All these things happen gradually. If you are not happy with where the market is at with regards to these things you always have option of trying to find a seller who will work with you directly, but good luck finding them.

First thing . . . commissions are fully negotiable. You don't want to pay what an agent is asking for then negotiate them down or find another agent who will work for less. There are many different agents out there with different service models and different commission structures. Like a lot of things in life, you tend to get what you pay for. Paying a higher commission is no guarantee of getting a better agent but I can guarantee you that paying a lower commission doesn't increase your odds of hiring someone competent. The good news is not everyone needs an agent and not everyone needs a full service, expert agent.