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The thing you are missing is that Attorneys in the west don't do deals. They don't do comps. They don't know what a particular appraisal is likely to be. The way the task is divided the lawyers simply don't get the exposure to the environment that the agent does.
Lawyers as a class are better trained and smarter than the agents. Fact of life. But they do not have the exposure to be good at this sort of thing. Sure you could pay an attorney to get smart. And in a few days or a week he may be up to the level of a good agent. That is 40 hours of lawyering at $150 an hour. Worth $6,000 to get that opinion?
This is simply the sort of thing that gets done by a good agent...and that leaves the not simple problem of finding a good agent to the buyer.
She can have a attorney look at a contract before signing or have it explained to her. She has no agent as of now from what OP states. No agent, no lawyer to at least see the contract makes a bad mix for her. The lawyer would be looking over the contract not doing the actual sale. If she at least gets a agent they can walk her through the contract and process and she can still go to have a lawyer overview the contract. Granted that depends on how much she trusts the agent. If she had a agent that didn't say inspire too much confidence or didn't have a agent at all and was double ending a deal what will it hurt to have a lawyer look at a contract make sure all the i's are dotted and t's are crossed?
A few hundred bucks to have a legal piece of paper explained as to what it all means? The first house I bought 22 years ago I had no clue what I was signing or really doing. I completely trusted my agent that he wouldn't be pulling a fast one. He didn't (and I do t mean this in a disrespectful way) but today not everyone is honest.
If she bought and sold houses and knew her way around a contract and house sale/purchase I would say you need little to no help.
I guess I should clarify that I'm working ALMOST sans agent. I do have a buyer's agent that rebates nearly 70% of his commission. So, for this house, I would get 2.1% of the price back. But, because of this, he doesn't really get involved except signing of papers and basic discussions with the listing agent.
You've just highlighted what can be the biggest problem in working with a discount agent--they may not be looking out for your interests. They justify their small commission by doing as little work as possible. That is by no means good representation. Sure, it may sound nice to get back a small percentage of the purchase price, but that amount could pale in comparison to what you stand to lose otherwise.
If you have an agent who knows the local market and who can really investigate the circumstances of a particular property, they can save you far more on the price than 2%. Or if they can steer you away from a property that has serious defects, or has other aspects that make it undesirable, that alone could be worth far more than the amount of rebate you might receive.
You may have to work to find a good agent, but they are out there. It's important to work with someone who is knowledgable and experienced--and you should try to gain as much knowledge about real estate as you can, too. Even simple things--like knowing who usually pays the transfer tax or title insurance--can save you money. As with most everything, knowledge is key when dealing with real estate. Good luck.
NOTE: Of course, if someone is well versed in real estate transactions, working with a discount agent or with no agent can be just fine. For newcomers, I usually recommend that they work with an experienced agent and/or a qualified real estate attorney.
That's kind of an odd set up. Is the 2.1% back a guarantee? I regularly see commission splits listed anywhere from 1-4% (buyer's agent side split). Does that mean the agent pays you out of pocket if they are given a 2% or lower commission? If so, I would question what kind of an effect that would have on their performance.
Well, it depends on the rate. He kicks back 70% of his commission, which for a 3% sales commission is about 2.1%. If the commission rate is lower, then the kick back is less. And, the higher the sales price of the home, he kicks back even more for the rebate. I think million dollar homes he rebates 75% of his sales commission to the buyer.
Yeah, it definitely does affect their performance, I would guess. I talked to another rebating agent in my area who gives back a little less than this other guy (about a $1000 less for a 3% sales commission on 500k house). He says they do this because instead of hunting for properties for their clientele, showing them the property, etc... he asks that the clients do all of that. When a property is found, he will just sign all of the paperwork, and since he knows the area really well (has done lots of real estating here over the years), he can offer advice on homes in certain areas. For example, areas that have poor well water, etc...
Well, it depends on the rate. He kicks back 70% of his commission, which for a 3% sales commission is about 2.1%. If the commission rate is lower, then the kick back is less. And, the higher the sales price of the home, he kicks back even more for the rebate. I think million dollar homes he rebates 75% of his sales commission to the buyer.
Yeah, it definitely does affect their performance, I would guess. I talked to another rebating agent in my area who gives back a little less than this other guy (about a $1000 less for a 3% sales commission on 500k house). He says they do this because instead of hunting for properties for their clientele, showing them the property, etc... he asks that the clients do all of that. When a property is found, he will just sign all of the paperwork, and since he knows the area really well (has done lots of real estating here over the years), he can offer advice on homes in certain areas. For example, areas that have poor well water, etc...
The problem of course is that you are into a deal where the skill and intelligence of a good agent would be tested to get you a good outcome.
And you do not have one. I would think under that circumstance you must walk. The risks are far greater than 2.1% of the sale price.
You can try a lawyer but this is not lawyer stuff. If you could find a really up to date RE accountant you would be better off...but I doubt such exists.
So you bought a cheap Real Estate Agent and got what you bought.
You have to keep in mind that the Real Estate Agent provides two different things...a set of functional services and experience and wisdom from much exposure to the action. You basically bought a subset of the functional services.
Kudos to the seller for trying to pull a fast (literally and figuratively) one! Create frenzy; make everyone "think" that all hell is about to break loose, and if their buyers don't step up fast this property is going to be sold right before their eyes.
And then the tide went out. Now the seller is screwed. Too many alarms raised; too many 'bend over' contingencies; and now we discover the truth.
The realtor bought the property in spec; it is in a flood zone; they are stuck holding the bag, and have chased off the majority of their potential buyers.
As Warren would say, when the tide goes out, you find out who is swimming naked. In this case, the seller overplayed their hand.
NEVER believe people when they start telling you that they have multiple offers over the asking price on a property which they own as an investment-- and on top of that, they throw in a bunch of ridiculous criteria.
Make the bid with which You are comfortable, and with terms which are satisfactory to YOU. It is YOUR money; the seller be damned if they are going to dictate the terms by which you are going to give them your money!
And now we know the truth about this property: it is encumbered by at least one MAJOR deal killer. The seller knew that, and tried to pull a fast one. You were smart to look under the hood, as people should with EVERY deal. It is amazing what you see when the tide goes out.
^^ Well, I'm still inclined to believe the house will sell. Probably for over asking. But, whoever will buy it is taking on a lot of risk. Flood insurance rates are set to sky rocket. Especially for zone A or V. I'm sure that flood insurance rates on this house is well over $2k/year. And, from what I've been told this morning by NIPF's underwriting dept, they will increase 25% yoy until the full risk is realized. Anyways, thanks for the replies, everyone. It was very helpful.
Kudos to the seller for trying to pull a fast (literally and figuratively) one! Create frenzy; make everyone "think" that all hell is about to break loose, and if their buyers don't step up fast this property is going to be sold right before their eyes.
And then the tide went out. Now the seller is screwed. Too many alarms raised; too many 'bend over' contingencies; and now we discover the truth.
The realtor bought the property in spec; it is in a flood zone; they are stuck holding the bag, and have chased off the majority of their potential buyers.
As Warren would say, when the tide goes out, you find out who is swimming naked. In this case, the seller overplayed their hand.
NEVER believe people when they start telling you that they have multiple offers over the asking price on a property which they own as an investment-- and on top of that, they throw in a bunch of ridiculous criteria.
Make the bid with which You are comfortable, and with terms which are satisfactory to YOU. It is YOUR money; the seller be damned if they are going to dictate the terms by which you are going to give them your money!
And now we know the truth about this property: it is encumbered by at least one MAJOR deal killer. The seller knew that, and tried to pull a fast one. You were smart to look under the hood, as people should with EVERY deal. It is amazing what you see when the tide goes out.
Ahhh nonsense. Virtually any of the near water beach property may be a zone A and still remarkably marketable.
There is nothing that makes a good flip not sell. And there is nothing wrong with buying a flip.
Anytime an agent claims multiple offers you can take it to the bank. That says nothing about the quality of the offers but the ethics code requires that the agent not lie...and they don't. And an agent familiar with an area will pick up the bad vibes off a overstated multiple offer almost instantly.
Virtually all the tactics listed are common in hot western markets. The shopping list was likely overly aggressive but who knows? Nothing made you meet any of them.
Anytime an agent claims multiple offers you can take it to the bank. That says nothing about the quality of the offers but the ethics code requires that the agent not lie...and they don't.
Anytime an agent claims multiple offers you can take it to the bank. That says nothing about the quality of the offers but the ethics code requires that the agent not lie...and they don't.
You actually believe this?
Absolutely. One of the few offenses guaranteed to get an agent in a jam. Requires a deliberate lie that is easy to prove. If I think a guy is pulling that off we go to the RE board.
Dealt a whole lot with multiple offers at various times. I don't think I have ever seen one I thought a lie.
Now I have seen multiple offers listed as multiple offers when the count was 2. and one was junk.
Multiple offer situations are seldom singularities. you either have a lot or none. When you have a lot they are very likely to be true.
Ahhh nonsense. Virtually any of the near water beach property may be a zone A and still remarkably marketable.
There is nothing that makes a good flip not sell. And there is nothing wrong with buying a flip.
Anytime an agent claims multiple offers you can take it to the bank. That says nothing about the quality of the offers but the ethics code requires that the agent not lie...and they don't. And an agent familiar with an area will pick up the bad vibes off a overstated multiple offer almost instantly.
Virtually all the tactics listed are common in hot western markets. The shopping list was likely overly aggressive but who knows? Nothing made you meet any of them.
When a agent/seller gets too tough, demanding and arrogant some buyers tend to take their MONEY and go home. **** people off with demands and they may just keep walking. I know I walked. I got a call back 1.5 months later when three other bids walked with a congratulations you won the bid. Lol really? Gee thanks.
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