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Old 04-03-2012, 04:04 PM
 
Location: NJ
17,574 posts, read 46,011,716 times
Reputation: 16271

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Quote:
Originally Posted by southernsmoke View Post
What you should do is just offer what you think is fair. In determining what you think is fair, you should feel free to consider that you are not bringing that 3% cost into the transaction. If the seller agreed to pay his agent 6% no matter what, then that is the seller's problem. The seller's agent will be better off taking 4% of 5% of your offer than taking 3% of a competing offer, though, so there is some incentive for the agent to compromise his commission (as a percentage) in order to help get your deal done. You can't expect to realize the full 3% savings necessarily, but as manderly sort of pointed out, it's hard to figure out who really gets how much of the 3% (other than the agent--you will know how much the agent gets) anyway because it's hard to determine what the sales price would have been if you did have an agent. But really, you shouldn't worry about that. If you are comfortable offering $200k if you would get $6k back (for not having an agent), then just offer $194k.
Good post. Offer whatever you think is a fair number that includes whatever calculations and percentages you think it should include. The seller will either accept or not. Why get hung up on discussing the offer + the 3%? It just makes it more complicted.
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Old 04-03-2012, 04:32 PM
 
Location: Lead/Deadwood, SD
948 posts, read 2,782,040 times
Reputation: 872
If you have 2 years then focus on FSBO's and save 6%. Surely in that time you could find something in the classifieds, word of mouth, etc. that will work - heck in that amount of time you could read every real estate law book out their, study all the forms, and just as with any agent that would put that amount in to a single transaction they/you will save/make about 50 cents an hour for your time.

If it's a hobby, then fine, spend 2 years looking, but if your looking to save $, don't forget the cost of the time!
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Old 04-03-2012, 08:39 PM
 
Location: Salem, OR
15,509 posts, read 40,235,609 times
Reputation: 17383
Whether or not you represent yourself completely depends on how analytical and thorough you are. Some home buyers do just fine representing themselves. Some stink at it.

Some agents, like myself, actually address unrepresented buyers in our listing agreements. I have about 1-2 of them a year. The unrepresented buyers typically net my seller more than other offers that came in on the property. It has been my experience that unrepresented buyers, generally, don't negotiate as hard as the agents do. They don't tend to know what are considered "normal and customary" repairs and often fail to ask for very normal and common things.

All the transactions with unrepresented buyers have gone fairly smoothly. I actually find working with unrepresented sellers (ie FSBO's) much more challenging, generally speaking.

Finding a really good buyer agent can be time consuming, so I get that you don't want to take the time to do that. Just know that some brokerages won't drop their fee for an unrepresented buyer so just make the offer you are going to make and let the seller and listing agent hash out the rest.
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Old 04-04-2012, 06:47 AM
 
Location: Columbia, SC
10,907 posts, read 21,874,385 times
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Great comment from Silverfall and pretty much sums up my experience as well.
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Old 04-04-2012, 07:11 AM
 
Location: Madison, AL
3,297 posts, read 6,233,663 times
Reputation: 2678
I'm going to lay it out....as a seller's agent, I LOVE unrepresented buyers. My job, per the laws of the state and the Code of Ethics, is to represent MY client...the seller. Naturally, that means getting that seller the most I can for his property, and that often comes along with a buyer who is not represented by another agent.
As a buyer's agent...I would NEVER allow my client to go in blindly. I do complete market analysis, show them comparables that have recently sold, identify some potential issues, search probate records for deeds/ect that could be potential issues, advice them if I see ANY red flags, point out things with their lender that may not be the best for them, make sure their home inspector is competent and very thorough, verify any and all information for them (AL is a non disclosure/buyer beware state, so that can constitute a good bit of information). My clients have used words like "advocate" to describe me....that's what I want, and what I strive for with ALL my clients, that they are fully informed, protected, and are getting the BEST deal possible.

I have represented BOTH the buyer and the seller (limited consentual dual agency). Not going to lie...it sucks. Like walking a tightrope between the two parties....cannot do anything for one that could be detrimental to the other.

Do you see the difference in "hats" we as agents wear? My BEST advice to you is to ask friends/coworkers for referrals to agents they have used in buying property. Interview those agents...ask questions. And if you don't feel like you are getting EXCELLENT service from them....TALK to your agent about it first, see if things improve....if not, DUMP them. This is the biggest purchase most will make in their lifetime...you deserve an advocate that will work their butt off for you (regardless of your price range).

Oh, and you are always going to get the pushy agent who wants you to buy the first house you see, and lets out that big "SIGH" when you tell them you want to see at least 10 more properties before you can decide....DUMP THEM. We work on the client's time...not ours. Sometimes we find the property early in the process...sometimes it takes time. Its not our money....its YOURS. You should feel like that agent has your best interest at heart, and is working hard for you.

FYI, most real estate attorneys in our area know diddly about actually executing and writing our contract. As a board, the membership writes and amends our own contract docs. I am on our Forms committee, and we are in 3+ hour meetings every month with new issues in regards to contract changes that we debate as our real estate market evolves and the way we do business evolves with it. The attorneys can interpret those contracts, but as far as writing them or including any additional provisions (which may be necessary depending on the property) they are mostly clueless. You are going to let the attorney (who most likely has NEVER seen this property and never will, and may not know, for example, that the home COULD fall in a flood plan and you may not want to proceed with purchase if the flood certification comes back requiring flood insurance, requiring a contingency on the contract) tell you the paperwork looks a-ok?

SO much more to a real estate transaction than people think. GET YOUR OWN AGENT!
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Old 04-04-2012, 07:59 AM
 
455 posts, read 635,717 times
Reputation: 307
Quote:
Originally Posted by LCTMadison View Post
I'm going to lay it out....as a seller's agent, I LOVE unrepresented buyers. My job, per the laws of the state and the Code of Ethics, is to represent MY client...the seller. Naturally, that means getting that seller the most I can for his property, and that often comes along with a buyer who is not represented by another agent.
As a buyer's agent...I would NEVER allow my client to go in blindly. I do complete market analysis, show them comparables that have recently sold, identify some potential issues, search probate records for deeds/ect that could be potential issues, advice them if I see ANY red flags, point out things with their lender that may not be the best for them, make sure their home inspector is competent and very thorough, verify any and all information for them (AL is a non disclosure/buyer beware state, so that can constitute a good bit of information). My clients have used words like "advocate" to describe me....that's what I want, and what I strive for with ALL my clients, that they are fully informed, protected, and are getting the BEST deal possible.

I have represented BOTH the buyer and the seller (limited consentual dual agency). Not going to lie...it sucks. Like walking a tightrope between the two parties....cannot do anything for one that could be detrimental to the other.

Do you see the difference in "hats" we as agents wear? My BEST advice to you is to ask friends/coworkers for referrals to agents they have used in buying property. Interview those agents...ask questions. And if you don't feel like you are getting EXCELLENT service from them....TALK to your agent about it first, see if things improve....if not, DUMP them. This is the biggest purchase most will make in their lifetime...you deserve an advocate that will work their butt off for you (regardless of your price range).

Oh, and you are always going to get the pushy agent who wants you to buy the first house you see, and lets out that big "SIGH" when you tell them you want to see at least 10 more properties before you can decide....DUMP THEM. We work on the client's time...not ours. Sometimes we find the property early in the process...sometimes it takes time. Its not our money....its YOURS. You should feel like that agent has your best interest at heart, and is working hard for you.

FYI, most real estate attorneys in our area know diddly about actually executing and writing our contract. As a board, the membership writes and amends our own contract docs. I am on our Forms committee, and we are in 3+ hour meetings every month with new issues in regards to contract changes that we debate as our real estate market evolves and the way we do business evolves with it. The attorneys can interpret those contracts, but as far as writing them or including any additional provisions (which may be necessary depending on the property) they are mostly clueless. You are going to let the attorney (who most likely has NEVER seen this property and never will, and may not know, for example, that the home COULD fall in a flood plan and you may not want to proceed with purchase if the flood certification comes back requiring flood insurance, requiring a contingency on the contract) tell you the paperwork looks a-ok?

SO much more to a real estate transaction than people think. GET YOUR OWN AGENT!
You have a pretty low view of lawyers. No doubt, some lawyers are bad. But if a buyer deserves a good RE agent, he also deserves a good lawyer. You can't assume that a buyer will get a great RE agent and a crappy lawyer and therefore conclude that a RE agent is valuable and a lawyer is useless.
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Old 04-04-2012, 09:26 AM
 
Location: Raleigh, NC
19,375 posts, read 27,625,045 times
Reputation: 35978
Quote:
Originally Posted by southernsmoke View Post
You have a pretty low view of lawyers. No doubt, some lawyers are bad. But if a buyer deserves a good RE agent, he also deserves a good lawyer. You can't assume that a buyer will get a great RE agent and a crappy lawyer and therefore conclude that a RE agent is valuable and a lawyer is useless.
I don't think that's what she was saying. In some parts of the country (AZ for example) it is extremely uncommon to hire a lawyer from a standard real estate transaction. The sale agreement is standardized and closings are handled by title companies.

When I purchased my first home, my out of state father advised me to hire an attorney to review the contract. I contacted two attorneys - one I knew socially and one I knew professionally - for referral to a RE attorney. Both told me not to waste my money. Dad still objected, got on the phone himself and called some RE attorney in Phoenix, who gently told him the same thing - no need for an attorney in AZ for normal residential RE purchase. But each and every one said one very important thing: get yourself a good buyer's agent and listen to their advice, then decide for yourself.

A good realtor is like a good doctor. They are experts in their field and essential tools for a good result, but ultimately the final outcome is in your hands. When I've had the opportunity to work with a good realtor, I have been well served.

Last edited by Jkgourmet; 04-04-2012 at 09:35 AM..
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Old 04-04-2012, 09:47 AM
 
Location: Martinsville, NJ
6,175 posts, read 12,900,372 times
Reputation: 4019
Quote:
Originally Posted by mumof1 View Post
Thanks to everyone for all the replies. We were thinking of hiring an real estate attorney to look over the papers for us. As of now we just don't want to be hustled into buying the first house that we see. We have given ourselves 2 years to find our second home and feel that until we absolutely love a home we are not gonna think about it. Just don't want a realtor to pressure us in anyway. That is one of the reasons for not wanting a realtor to tag along with us. Also being a second time buyer we can look past the cosmetic beauty of a house and see if the house has any problems, so are comfortable with our first visits without someone pointing over our shoulders.

On another note, wanted to clarify about the 3% thing that I mentioned.
Say for eg, a house is listed at 200K, the seller is gonna pay 6K (3%) to buyers agent. My point was can we ask the seller to instead sell us the house for 194K or a 2nd scenario, sell us at 200k and give us 6K which he would have as it is given to our realtor. As mentioned by some of the realtors in this thread apparently that is not possible as the seller has agreed to pay that money to his realtor. Now my question is are these contracts renegotiable? Does a seller have any leeway at all?
The important part of the scenario, which seems to be left out of the discussion, is the service and benefit you would get for the money. Hiring a real estate agent is a value proposition, just like hiring any service professional. For the fee you pay, you should receive some service & benefit that is worth the fee. If you know what services & benefits are offered, and feel that you would prefer to do without them if you can keep the money instead, then don't hire a real estate agent. My first suggestion is to understand what services & benefits are offered by the agents you might consider. "Tagging along," "pointing over your shoulders," and "hustling you into the first house you see," are not the important parts of any good real estate agent's services.
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Old 04-04-2012, 01:14 PM
 
Location: Madison, AL
3,297 posts, read 6,233,663 times
Reputation: 2678
Quote:
Originally Posted by southernsmoke View Post
You have a pretty low view of lawyers. No doubt, some lawyers are bad. But if a buyer deserves a good RE agent, he also deserves a good lawyer. You can't assume that a buyer will get a great RE agent and a crappy lawyer and therefore conclude that a RE agent is valuable and a lawyer is useless.
I don't have a low view of lawyers, and I did not state anything of the sort. BUT, attorneys often times are not educated enough on the "ins and outs" of real estate transactions to be able to write and advise contracts for those transactions. Thus my example about the flood zone. Just because real estate attorneys are not focused on the details in preparing an offer that provides needed clauses/protections for either party, does not mean they are BAD. That is just not typically their job. They didn't become attorneys to sell houses.

I have had several clients hire their own attorney to come to the closing over the years (because the attorney closing always represents the lender) and not ONE time has any of those attorneys contributed anything valuable to the transaction. I sent them the contracts, they say "looks good", they show up at closing, don't say a word, and collect their payment.

But if it makes you sleep better at night....
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Old 04-04-2012, 01:59 PM
 
Location: Salem, OR
15,509 posts, read 40,235,609 times
Reputation: 17383
Quote:
Originally Posted by Jkgourmet View Post
I don't think that's what she was saying. In some parts of the country (AZ for example) it is extremely uncommon to hire a lawyer from a standard real estate transaction. The sale agreement is standardized and closings are handled by title companies.

When I purchased my first home, my out of state father advised me to hire an attorney to review the contract. I contacted two attorneys - one I knew socially and one I knew professionally - for referral to a RE attorney. Both told me not to waste my money. Dad still objected, got on the phone himself and called some RE attorney in Phoenix, who gently told him the same thing - no need for an attorney in AZ for normal residential RE purchase. But each and every one said one very important thing: get yourself a good buyer's agent and listen to their advice, then decide for yourself.

A good realtor is like a good doctor. They are experts in their field and essential tools for a good result, but ultimately the final outcome is in your hands. When I've had the opportunity to work with a good realtor, I have been well served.
Our local real estate attorney's say the same thing. They get pulled in for more complex things like owner financing transactions, but they stay out of and generally don't want to be involved in normal real estate transactions.

This goes again to knowing local real estate customs. A real estate attorney out here would have no idea of what are normal repair requests. I'm not sure many of them would know to recommend a radon test or not or different kinds of water quality testing.
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