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thanks for all the great info! I think, if this house falls through, I will start working with an agent more local to the area. Ironically, I like the agent on the house I am thinking about buying from, so if things dont pan out, I will have her sign on as our broker.
I've heard procurring cause is a thing of the past and that in commission disputes the board of Realtors has been relying more on the consumer wanting their own representation, rather than being forced into a transaction with someone that unknowingly had show them a house without wanting to purchase from.
I'm assuming the listing agent has already shown you the home, right? If so, then you have established "procuring cause" if you make an offer proximate to your viewing of the home. So, the recommendation to bring in a buyer's agent is incorrect and would confound your deal. There are advantages to have a buyer's agent, but I also understand that some buyers deal directly with the listing agent because there may be more wiggle room in the price if the buyer and seller are close to a deal. In other words, the listing agent who similarly represents the buyer may cut his or her commission to close the deal. I've never done this before because buying brokers work very hard to earn their keep, but some cut throat buyers engage in this practice.
Agree with all the above. I'll also add that in this market when housing supply is very low and most offers in desirable towns are close to, if not above asking price, a few of my coworkers have started making offers on dual agency because according to them, if there's little difference in price, the listing agent will push for your offer to be accepted since he gets the full commission. Worked for a few of them in the past months.
That said, when my father bought his house, he thought he was real smart and went dual agency and I personally thought he got fleeced. Can work both ways.
Agree with all the above. I'll also add that in this market when housing supply is very low and most offers in desirable towns are close to, if not above asking price, a few of my coworkers have started making offers on dual agency because according to them, if there's little difference in price, the listing agent will push for your offer to be accepted since he gets the full commission. Worked for a few of them in the past months.
That said, when my father bought his house, he thought he was real smart and went dual agency and I personally thought he got fleeced. Can work both ways.
It always works one way: One agent is getting 2 commissions to represent both sides of a transaction in which one party wants the highest possible price and best possible terms, and the other party wants the opposite. How can that be good? Oh, the listing agent is going to knock $5,000 off and make $20,000 instead of $25,000? Still making close to double, desperate to close the "big deal", and representing and protecting and advocating for precisely nobody.
It would be the equivalent of Scott Boras representing both Derek Jeter, and the Yankees, in negotiating their next contract. How often do we see that? For you older fans, it would be like an attorney representing both Charles Manson and Sharon Tate.
It seems to be common sense that you would not want your agent to handle both sides of what is usually the largest financial transaction in your life. It seems to be common sense in the 9 or 10 states that have outlawed the practice. It sort of seems like common sense to the State of New Jersey, which has passed laws requiring special discrete disclosures that you have to sign to give special consent to the arrangement. Basically it called the CIS (Consumer Information Statement). It is sort of like your real estate Miranda Warning, and you are supposed to be given a copy right up front when dealing with an agent.
Bottom line is: dual agency is a bad idea, even if you can somehow muddle through it. If you are a buyer, and you call the listing agent to get information on a property, I would advise you to follow this script:
"Good morning. I am calling on your listing at 24 Maple Ave. But first, I want to let you know that I am represented and will be using my own agent. Now, does it have a finished basement?"
Say nothing about your motivation, say nothing about whether you have something to sell first, say nothing about your personal circumstances, say nothing about income, credit, job, or time frames. You are trying to get information on the house, and anything else you say can and will be used against you in a real estate transaction. A seemingly innocent answer to a question can cost you thousands of dollars in the negotiation.
When you go to an open house, the first thing you should say to the agent is this: "Hello, I would like a tour, but I just want to let you know that I am represented and have my own agent."
What if you do not yet have an agent? It doesn't matter. You are not obligated to disclose who the agent is, and you can select him or her later. The statement that you are represented should cut off all further communication regarding your personal circumstances. If it doesn't you are dealing with either an amateur or a barracuda.
1) A typical deposit would be $1,000 with the offer, another 10%-25% or so 10 days after attorney review is complete, and the balance at closing.
$1000 with the offer is fair but 10-25% within 10 days/after attorney review sounds outrageous. Unless it is a all-cash offer or there are multiple bids on the house and the buyer wants to make a very solid statement, there is no reason anyone should put more than 20k before closing on lets say a 500k house.
Ofcourse they won't be...but as a buyer, I want the best for me and won't mind hitting the seller's commission. It really depends on the situation. In some scenarios, the seller's agent would refuse up front and in some cases, the seller's agent will have no choice..so..it really depends..
Why would the seller's agent have no choice when serving a dual agent? They know the only way the buyer can buy that specific house is if they go through them (unless the buyer wants to bring his own realtor and be lawfully willing to pay commission out of their pocket). It is the buyer who doesn't have a choice - not the seller's agent.
The buyer needs to careful about who shows them the house. They unknowingly get in a contract to buy with the realtor who shows them the property.
$1000 with the offer is fair but 10-25% within 10 days/after attorney review sounds outrageous. Unless it is a all-cash offer or there are multiple bids on the house and the buyer wants to make a very solid statement, there is no reason anyone should put more than 20k before closing on lets say a 500k house.
Why would the seller's agent have no choice when serving a dual agent? They know the only way the buyer can buy that specific house is if they go through them (unless the buyer wants to bring his own realtor and be lawfully willing to pay commission out of their pocket). It is the buyer who doesn't have a choice - not the seller's agent.
The buyer needs to careful about who shows them the house. They unknowingly get in a contract to buy with the realtor who shows them the property.
The agent is supposed to give them the CIS right up front. If he did not do that, and most agents do not, it is an ethical breach, and he had better let the buyer have their own agent, and pay that buyer's agent happily and quietly, unless he is interested in an ethics complaint with the state board.
I was sort of in a dual agent situation with my selling agent. She brought a buyer in that ended up putting an offer in on the house. To make sure everything was above board, she arranged for her broker to represent us during the negotiations so she wouldn't be influencing our decision. We had multiple offers and theirs didn't win, but If it did she would have gotten the full commission and everyone's interests were protected. Perhaps you can suggest this in your situation?
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