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Its not my job as a buyer to make the brokerage rich, if I find a house on my own and buy it I should not be responbile some paying some 3rd party. I would wager that if it turned into a knock down drag out court battle the brokerage would be compelled by the courts to show in detail what they did on the buyers behalf for the specific property in question.
You have no quandary at all. Simply do not hire an agent and do not work with an agent. That way, you will never owe a commission.
He's not going to get $500K on a house with a market value of $350K. Of that $350K, $225k is the market value of the lot!
Some people seem to think it's still 2005/06.
Your family member is likely going to take a wallop, because not only has he lost 4 years of his time and 4 years of lost opportunity, but I see prices either declining at a moderate clip or even outright tanking in most areas nationwide.
The fact of the matter is that almost any property will sell if it is priced correctly, baring it being located in disaster zones like Detroit, Gary, East St. Louis, Sierra Leone, or the Fukushima nuclear reactor meltdown area.
The trick is to understand what "priced correctly" entails given the size and condition of home, the lot, the demographics of the neighborhood, and it's location relative to other venues such as employment centers, schools, or recreational areas.
You have no quandary at all. Simply do not hire an agent and do not work with an agent. That way, you will never owe a commission.
I still don't understand people who come on here ragging on agents commissions.
They absolutely can forgo the services and knowledge of an agent and free to sell their home without paying any commissions.
You have no quandary at all. Simply do not hire an agent and do not work with an agent. That way, you will never owe a commission.
more and more consumers would do this if agents didn't control the buyer pool by locking them into contracts which they really don't understand. more fsbo sales would get done and there would be more "real" competition in the market. any agent arguing against this just has to look to the title of this thread. education is key.
Or except for clients who refuse to sign such non sense. So you are saying that as a buyers agent if I as the buyer go out and find some home driving around and put in an offer all on my own I could be sued by the agent? There are some truely nieve and idiodic people out there if they are willing to sign something like that.
The amazing thing about contacts is that you can agree on lots of different things. How cool is that?
You can tell your buyer agent that you don't want them to search for FSBO's. You can tell your buyer agent to search for FSBO's, but only show you the ones with acceptable compensation to the buyer agent. You can tell the buyer agent that you will pay for any short comings in offers of compensation.
Life is not black and white, nor are contracts. So what I am saying is that the OP is welcome to offer whatever they would like to for a buyer agent compensation. If the buyer agent doesn't like it, then have choices about how to handle that with their client. Just because someone makes a decision that you wouldn't doesn't make them naive or idiotic. It makes them not you.
Why does everyone in the world have to do things your way?
I completely understand some agents not wanting to work for less than the "standard" buyers agent fee - but a buyer should not get locked into a contract saying that they owe a buyer agent a certain fee if they buy that house and have to make up the difference. That should be an alternative but not a requirement.
Many buyers have no idea it works this way and if they did might be more vocal about the process. The vast majority of forms used by agents today are written first to protect the agent (broker) and then the seller or buyer. It's a rigged system.
Of course, a Buyer should not be locked into such a contract--unless they choose to agree to such a contract.
It is never a requirement to sign a contract with those terms. People need to understand that they are free to change the terms of any written contract presented to them. If the other party does not agree to those changes, they can walk away or find another agent who would. There are plenty of agents out there who would not require the above contract provision, myself included. (Heck, I don't require a written contract at all.)
One thing people who object to buyer's representation contracts seem to forget about contracts in general is that they are for the protection of BOTH parties.
Not every broker uses the standard buyer's rep contract that is promulgated by the Texas Real Estate Commission, written by their attorneys, for example. (Since their purpose is to protect the consumer, you can rest assured that it's written as fairly as possible to the consumer.) Some require the buyer come up with any shortfall (and whether or not that provision is enforced in any contract varies - sometimes the broker will not enforce it looking ahead to future deals, for example, but it's the broker, not the agent, who makes that decision because here the contract is with the broker). Others don't, and any buyer who doesn't want their agent to be paid for their work but to do it for free is free to find a broker with such a contract. One does wonder if they, themselves, would work for free and think it is hunky dory - one strongly suspects not.
Buyer's rep contracts (all contracts) spell out the responsibilities of BOTH parties and what they have agreed to do, reducing if not eliminating confusion. That's it in a nutshell. Neither party is forced to sign a contract, and either party has the privilege of walking away if the contract is not acceptable to them. Did you know that agents don't have to work with anyone who asks them to?
For anyone who thinks that all an agent does is open doors, you've just shown that you haven't a clue about how real estate deals work.
For example, take the seller who decides the night before closing the next morning that he's not going to sell the house because of something that was in the contract from the initial offer, that was right by where he put his initials on the contract, that he had every opportunity of objecting to at that time and did not. How do you handle that? Trust me, it takes both agents AND brokers working pretty much nonstop to get such a deal to close without involving the court system.
Take the case where the survey turns up that the house and lot that is being sold includes a 10 foot strip going across the back of the neighbor's property and through their garage, and the neighbor in question is NOT pleasant to deal with on the most mundane of things, to put it mildly. How do you solve that one?
What disclosures are required on houses, on bare land, on farm and ranch, by whom and under what conditions? Who is exempt from providing what disclosures? (We're getting into area that could pop up and bite you as the seller way down the road after the property is closed, if you didn't handle the disclosures properly in the beginning - we're in potential lawsuit territory now.)
Lots more examples come to mind, that's just a sampling.
I've purchased houses both with and without agents involved before ever becoming an agent. The one not involving agents went okay, though there are things I sure wish I'd known at the time (we didn't get an inspection, for one thing, because we were all clueless). The one involving agents went fine, and we bought knowing a heck of a lot more about what we were buying than we did when buying without an agent.
That being said, having been an agent for some years now and seeing the things that CAN and DO go wrong, I would not buy without an agent again, and especially would not buy without an agent in an area with which I am not familiar.
I thought agents didn't care what other agents charge for commissions. Guess that really isn't the case if they are going to blackball sellers who offer less than the standard buyer agent fee in the MLS. Commissions are supposed to be negotiable, but it's clear that such properties aren't going to get equal treatment on the market.
I completely understand some agents not wanting to work for less than the "standard" buyers agent fee - but a buyer should not get locked into a contract saying that they owe a buyer agent a certain fee if they buy that house and have to make up the difference. That should be an alternative but not a requirement.
I'm not aware of any market where that is a requirement. Certainly not in my market. In fact it is very rare for a buyer to sign such an agreement where I work (Florida East Coast).
I'm not aware of any market where that is a requirement. Certainly not in my market. In fact it is very rare for a buyer to sign such an agreement where I work (Florida East Coast).
There are states where a Buyer's Broker Agreement is required. They are optional here (NV) and rarely used. I don't know that the compensation clause is set however...likely negotiable.
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