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Old 12-18-2011, 09:24 PM
 
1,232 posts, read 3,011,172 times
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I'd walk away from any agent with any sort of buyers fees or fees over 3%, personally.

Everyone should read Freakonomics. Real estate agents haven't earned even that since computerized MLS.
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Old 12-18-2011, 09:37 PM
 
Location: Victoria Woods, CA
464 posts, read 796,375 times
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Quote:
Originally Posted by ReadyFreddy View Post
I'd walk away from any agent with any sort of buyers fees or fees over 3%, personally.

Everyone should read Freakonomics. Real estate agents haven't earned even that since computerized MLS.
Oh no, no...she is the SELLER'S agent and is just writing up our offer. We have no agent so she is already dipping into the pot twice.
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Old 12-18-2011, 09:56 PM
 
Location: California
6,273 posts, read 7,084,602 times
Reputation: 13627
Please contact a R/E lawyer who can provide local legal advice!

Some sales people just want to be paid as if they are brain surgeons so stand your ground and please get legal advice. I sold a home in Phoenix a few years ago without a having to pay "commissions" as there are plenty of homes for sale that do not require anything more than the free advice from your local title agent regarding what docs are needed, as well as lawyer for contract review.

Also, always use an independent inspector and appraiser as they don't have a financial interest in the outcome.
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Old 12-18-2011, 10:29 PM
 
10,719 posts, read 19,502,239 times
Reputation: 10015
Quote:
Originally Posted by Heidi60 View Post

Also, always use an independent inspector and appraiser as they don't have a financial interest in the outcome.
I agree. I would never use the inspector and appraiser the real estate agent refers to you. You want someone who works for you not your realtor. The realtor is hoping you use their guys because they are essentially a team and their goal is make sure the deal is closed. An inspector who is referred by a realtor is unlikely to kill a deal by "nitpicking" which is what you want them to do. The inspectors wants continued referrals from their realtor source so guess where their loyalty lays. Unless, it's obvious, they will let a lot of things go and that's been my experience with realtor referred home inspections. And you can never prove that an inspector deliberately missed things and the realtor referred inspector knows it so they are protected more or less. It's always amusing to see the look on a realtor's face when you tell them you are using a different inspector and appraiser; it's this look of awe! They will tell you that it's fine but you can tell they are not comfortable with the idea.

Don't rely compltely on the home inspector. You should inspect the home yourself to the best of your ability and within reason. You would be surprised by how many basic things inspectors miss that you can catch yourself if you do your own walk through and spend time just turning things on. For example, I caught broken glass in the panels of the garage door, and leaks. And for certain items, I think it's wise to hire a separate electrician and HVAC because home inspectors tend to gloss over those items and don't pay attention to those items with the same attention to detail. A lot of inspectors will miss poor electrical wiring that is not up to code because during the bubble, a lot of these homes were put together poorly and in a hurry.

One last piece of advice that will save you a lot of trouble is to check the outdoor things yourself like the sprinkler system, outdoor lighting, swimming pool equipment. Inspectors will often not check the sprinklers, outdoor lighting and things outside of the home itself. You can often catch malfunctioning sprinklers/broken sprinkler heads, underground leaks (mud) where underground piping to the sprinklers are leaking; sprinkler repair looks harmless but its expensive and can cost thousands to fix that. Check to see if the swimming pool light turns on, if there is suction and that pool pump is working properly, water is not leaking around the pump and motor. Does the mister system work? Are there major leaks with the mister system? You can save yourself thousands of dollars by catching these things and having the seller fix it before you move in.

Last edited by azriverfan.; 12-18-2011 at 10:55 PM..
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Old 12-18-2011, 10:49 PM
 
9,892 posts, read 10,803,709 times
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As one that is no longer in the real estate business, I want to say there is no such thing as a standard commission.

Commission amounts are often determined by how difficult and expensive it will be to market a property. I was a commercial real estate broker, and specialized in three things. 1)--Commercial property. 2)--Multiple party exchanges often across several states or even foreign properties as part of the package. 3)--Difficult to sell property (property demanding more effort and more difficult to sell). In 30+ years, I only sold 5 homes for personal use by the buyer. On the other hand, I sold 13 to be built homes, to investors on the telephone in 2 hours to sell out a subdivision (there was a below market price offered) with one buyer taking 5 plus another resale home that morning.

I have charged 3% acting as a buyers agent (paid by the buyer not the seller) with nothing coming my way from the seller which is a true buyers agent. A good agent, can save you more in the negotiation that the 3%, if his/her fiduciary duty (under a buyers broker contract) is to the buyer not the seller on a property listed by another office.

I have charged 6% to 7% for average property.

I have charged 10% many times, for more difficult to handle property, which often had been for sale for a couple of years listed with from 4 to 6 different offices, and I would get them sold.

For commercial property and exchanges, 10% if pretty normal.

An agent is selling their labor, and they expect to get paid for it. It depends on how much labor is required to sell a property, and how much expense it is going to cost the agent/broker, when determining the amount the commission is to be.

Some one above said they don't think that there should be an extra fee, if the agent is negotiating a short sale. Wrong. A short sale, can cost a lot more time to get closed, and the extra time involved deserves a higher fee.
People if they work overtime, want paid time and a half, but think an agent putting in overtime should not be paid for the overtime. In addition an office administrator may be the one putting in the hours to work with the lenders to get the sale closed. It is an expense that is above and beyond the normal sale costs. Someone has to pay that office administrator for their time and labor, and as it is to benefit the buyer it should be paid by the buyer.

If a contract says there should be extra fees at time of closing, I would want a written list of what would be considered extra fees. No surprises. If I don't think it is a justified fee, I would want it stricken from the list and initialed in advance. I would never be willing to pay a fee to any brokerage office, that was not listed and agreed to in advance.
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Old 12-18-2011, 11:34 PM
 
Location: California
6,273 posts, read 7,084,602 times
Reputation: 13627
Quote:
Originally Posted by azriverfan. View Post
I agree. I would never use the inspector and appraiser the real estate agent refers to you. You want someone who works for you not your realtor. The realtor is hoping you use their guys because they are essentially a team and their goal is make sure the deal is closed. An inspector who is referred by a realtor is unlikely to kill a deal by "nitpicking" which is what you want them to do. The inspectors wants continued referrals from their realtor source so guess where their loyalty lays. Unless, it's obvious, they will let a lot of things go and that's been my experience with realtor referred home inspections. And you can never prove that an inspector deliberately missed things and the realtor referred inspector knows it so they are protected more or less. It's always amusing to see the look on a realtor's face when you tell them you are using a different inspector and appraiser; it's this look of awe! They will tell you that it's fine but you can tell they are not comfortable with the idea.

Don't rely compltely on the home inspector. You should inspect the home yourself to the best of your ability and within reason. You would be surprised by how many basic things inspectors miss that you can catch yourself if you do your own walk through and spend time just turning things on. For example, I caught broken glass in the panels of the garage door, and leaks. And for certain items, I think it's wise to hire a separate electrician and HVAC because home inspectors tend to gloss over those items and don't pay attention to those items with the same attention to detail. A lot of inspectors will miss poor electrical wiring that is not up to code because during the bubble, a lot of these homes were put together poorly and in a hurry.

One last piece of advice that will save you a lot of trouble is to check the outdoor things yourself like the sprinkler system, outdoor lighting, swimming pool equipment. Inspectors will often not check the sprinklers, outdoor lighting and things outside of the home itself. You can often catch malfunctioning sprinklers/broken sprinkler heads, underground leaks (mud) where underground piping to the sprinklers are leaking; sprinkler repair looks harmless but its expensive and can cost thousands to fix that. Check to see if the swimming pool light turns on, if there is suction and that pool pump is working properly, water is not leaking around the pump and motor. Does the mister system work? Are there major leaks with the mister system? You can save yourself thousands of dollars by catching these things and having the seller fix it before you move in.
Excellent post and very well said. We've all heard the excuses so this is very refreshing to have some down to earth useful advice and you didn't even charge a commission! Home sales are not rocket science.

There are no super natural skills involved in selling/buying a home so there is no reason to pay high dollar when a lawyer will charge you a fraction of what the sales people do. A fool and his money are easily separated.
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Old 12-19-2011, 03:14 AM
 
Location: Surprise, Arizona
88 posts, read 297,960 times
Reputation: 48
6% is the norm..you pay less you get limited service and your property stays on the market EVEN longer- you pay more..your getting ripped off- there is a typical scam in the rental market too, where the listing agent trys to charge the buyer's client an ADIM fee usually about 200.00 so they make that on top of the 3% of the 6% split. Its greed plain and simple-
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Old 12-19-2011, 03:32 AM
 
Location: Surprise, Arizona
88 posts, read 297,960 times
Reputation: 48
A lawyer charging less than a real estate broker? wow thats a new one- It may be a close call bu Ive known more scandelous lawyers than realtors, and I deal with realtors everyday I also disagree with the realtor referred inspector comment- My inspector is a friend I refer him. His reports have killed a couple of deals but I find him to be the best- It is disappointing at times to lose a deal but we both sleep well at night, and Ive won the respect of my client and we find something else. A fool and his money soon separate, but a man who represents himself has a fool for a client. I guess it all boils down to honesty. I used to think like you, get my license, get my own brokerage, have a nice cushhy job make big bucks...Like you I was sadly mistaken
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Old 12-19-2011, 07:01 AM
 
Location: Gilbert - Val Vista Lakes
6,069 posts, read 14,239,734 times
Reputation: 3874
Quote:
Originally Posted by makeitagreatday View Post
Help!!!! I'm normally on CD alot but have been busy with house hunting and holidays. I just googled 'AZ Broker's Administrative Fees' and came upon this thread. I also came upon an article from Peter G. Miller on Realty Times from December 16, 2011 which clearly states this fee is illegal in Arizona and violates codes of the Department of Arizona Real Estate.
Can you provide a link to that article? I googled Peter G. Miller on Realty Times and this is all I could find. http://realtytimes.com/rtpages/petermiller.htm

I also found this article from HUD HUD lawyer looks at realty 'admin' fees
which indicates that the fees are not illegal.

I can't find anything in my AZ Real Estate Law book that states Administrative Fees are illegal.

In the Buyer Broker Agreement, there is a field for stating the amount (if any) that the Buyer will pay the Buyers Broker, in addition to what the Seller pays. That is usually used if the Buyers Broker requires a minimum fee, because some Sellers Agents may be offering to pay less than the minimum the Buyer Broker will work for. I know you don't have a Buyer Broker Agreement, but I mention that to show that a Buyers agent can charge a fee in addition to what the Seller will pay.

Quote:
...So-o-o-o....we went to make the purchase offer (and this would be our fourth real estate transaction here in AZ so we are not newbies to AZ RE) and after bringing up a few impractical terms on the offer to the agent, she sent us a revised (???--not really) one and threw in an extra couple a pages to sign. One for her as dual representation....although it was already clarified on the purchase offer and apparently not needed at first...and another for the BAC (Broker's Administration Commission), which is only an ESTIMATE at $695, which was also not needed the first time around.

When questioned, she explained that all brokers do this now (not to our knowledge as it was not done in our previous RE transactions as Buyers 2 wks. ago, 1 mo. ago and 1 yr. ago with AZ properties). She said the Seller also will be paying $695 BAC.
I'm a bit confused with the limited information provided. Above you state that she has you sign a Dual Agent form. In a subsequent post you state: "Oh no, no...she is the SELLER'S agent and is just writing up our offer. We have no agent".

The purchase contract has check boxes to show who the agent is representing. A box for representing the Buyer, another if representing the Seller, and another if representing both Buyer and Seller.

If she is not representing you at all, then the box for representing the Seller would be checked. Then you would have to sign an Unrepresented Buyer form.

If she is representing both Buyer and Seller, the box Both Buyer and Seller would be checked, plus both the Buyer and Seller must agree to "Dual Agency" representation, and both buyer and seller must sign the "Consent to Limited Dual Representation" form. That is a legal requirement. Without that the agent cannot act as a dual agent.

Quote:
I do not at all like that she's slipping things in with the revised Purchase Offer and we spoke to her today to change some terms that give the Seller an escape route to breach the contract w/o reason. We would love to continue forward with this deal but dislike the greediness of the agent/broker and flightiness character of the Seller to proceed with the contract and recently added admin. fees to the point that we will walk away if our refusal to pay an estimated (or more if they see fit) $695 fee and change terms so the Seller cannot walk away once under contract w/o good reason is unaaceptable to the agent.
There are very few people on the forum who understand the real estate contracts well enough to provide you with advice, and there is insufficient information for those of us who do understand the contracts to offer advice. In fact there is conflicting information about the representation.

  • Has the offer been submitted to the Seller?
  • Is this a Short Sale? (It's typical in a short sale for the sellers agent to charge an Administrative fee to help pay for the short sale negotiator. That fee is usually disclosed in the Realtor Remarks of the mls listing sheet, or in a separate document under the Document tab of the mls listing sheet.
  • What is the language she's adding that will give the seller an escape route?
  • What does flightiness of the seller mean?

Quote:
Your thoughts, CD people, would be most appreciated ASAP as she's sending another supposedly improved contract over in the morning but holding tight to the $695 or TBD BAC. It just doesn't seem right.
In my personal opinion, buyers and sellers should not agree to Dual Representation, because the agent now must become Neutral and not advocate for either party. There is a conflict of duties at this point.

However, in this instance it is unclear if you are an Unrepresented Buyer or in a Dual Agency situation.

My advice to you at this point would be to contact a Real Estate attorney to go over the contract with you because it's fairly obvious that you do not understand all that is happening with that contract.
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Old 12-19-2011, 08:22 AM
 
Location: Tempe, Arizona
4,511 posts, read 13,098,322 times
Reputation: 2200
Quote:
Originally Posted by Captain Bill View Post
Can you provide a link to that article? I googled Peter G. Miller on Realty Times and this is all I could find. http://realtytimes.com/rtpages/petermiller.htm

I also found this article from HUD HUD lawyer looks at realty 'admin' fees
which indicates that the fees are not illegal.

I can't find anything in my AZ Real Estate Law book that states Administrative Fees are illegal. ...
I agree. As indicated in the HUD article, they are not illegal, but they should be tied to specific services. I don't charge admin fees, but if the seller tries to get my buyer client to pay certain fees, such as for a short sale negotiator, then that would have to be negotiated and may become part of the contract if agreed by both parties.
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