Making an offer to buy - what is the local practice? (Tampa: comparable sales, short)

[HughMcs]

We are looking to purchase a home in the Pinellas/Pasco area in the near future. The local custom in NY in pricing a home is that the seller and his listing agent will agree on a price that the seller is comfortable with and then raise it by about 10% to cover the cost of the real estate commission (about 6%) and a 4% "bargaining" cushion. Most buyers start with a bid of about 15% less then the asking price just to get their foot in the door to start negotiations, knowing that the bid will be refused but waiting for a counter offer. As a buyer I really don't care to pay for the real estate agents commission because they are rendering a service to the seller and not to me, the buyer.
I would appreciate any advice on the local practice. Thanks in advance

[TampaKaren]

In Florida, the listing agent is typically an exclusive agent for the seller. A buyer's agent represents the buyers. In the case where the buyer wants to make an offer to the seller via the listing agent, the listing agent can transition to a transaction broker and represent both parties. A Transaction Broker has limited confidentiality and limited representation of both parties. Both seller and buyer must agree in writing. Dual agency is illegal in Florida.

It also might help you to know that attorneys are not usually involved in the real estate transactions, but there are some. Most of the time, the transactions are completed by buyers, sellers, real estate agents, title agencies, and where applicable, lenders.

Even though a seller may have a mortgage balance, pricing depends on location, lot, condition, upgrades, and recent comparable sales. In buyer financed transactions, the latter creates the most problems with appraisals.

[Pragmaticus]

Originally Posted by TampaKaren

In Florida, the listing agent is typically an exclusive agent for the seller. A buyer's agent represents the buyers. In the case where the buyer wants to make an offer to the seller via the listing agent, the listing agent can transition to a transaction broker and represent both parties. A Transaction Broker has limited confidentiality and limited representation of both parties. Both seller and buyer must agree in writing. Dual agency is illegal in Florida.

It also might help you to know that attorneys are not usually involved in the real estate transactions, but there are some. Most of the time, the transactions are completed by buyers, sellers, real estate agents, title agencies, and where applicable, lenders.

Even though a seller may have a mortgage balance, pricing depends on location, lot, condition, upgrades, and recent comparable sales. In buyer financed transactions, the latter creates the most problems with appraisals.

Illegal or legal?

[TampaKaren]

One agent/agency cannot have a fiduciary relationship with both sides of the transaction. According to Chapter 475 of the Florida Statutes, dual agency is illegal. See below:


475.272 Purpose.--In order to eliminate confusion and provide for a better understanding on the part of customers in real estate transactions, the Legislature finds that the intent of the Brokerage Relationship Disclosure Act is to provide that:
(1) Disclosed dual agency as an authorized form of representation by a real estate licensee in this state is expressly revoked;
(2) Disclosure requirements for real estate licensees relating to authorized forms of brokerage representation are established;
(3) Single agents may represent either a buyer or a seller, but not both, in a real estate transaction; and
(4) Transaction brokers provide a limited form of nonfiduciary representation to a buyer, a seller, or both in a real estate transaction.

[HughMcs]

I am somewhat confused (which is not difficult at my age). When I am looking to purchase a home, I go on the internet, look at the real estate sites, see what type of home fits the budget and then contact the real estate company to set up an appointment to look at the property. If I like the home I will contact that agent and submit an offer. Why would I need to hire a buyer's agent. What service could I get from him that I won't get from a title search, home inspection and an attorney that would protect my interest.
Secondly my original post concerned the local custom to submit an offer. If the local custom is - there is no bargaining, take the property as is and at the listed price, then I will concentrate on properties that I think I can afford or represent a good value for my family. If the local custom allows for some bargaining wiggle room, then the field of available homes has expanded and I may want to look at a home that is at the very top of my budget and maybe a bit beyond the comfort zone because it has more to offer because I might be able to negotiate to a cost that I can afford. I don't want to waste anyone's time by looking at homes priced just above the higher end of my comfort zone that I have no chance of acquiring if the listed price is a firm sales price.

[TampaKaren]

There is no custom per se in the current market. There's a huge difference in ridiculously low asking prices fabricated to solicit offers and the asking prices priced so far above recent sales that they would never appraise. Both exist simultaneously, sometimes in the same neighborhood. One good thing is that Florida is a disclosure state so anyone can lookup deed and mortgage information and sales data on public records. Based on research gained about a particular house would help guide you toward an offer price. In an area with few sales, you could use the average percentage of list price to sales price and use this number, but I wouldn't recommend it. A gutted foreclosure next door to a well-cared for home in good condition will create a big disparity. You should do as much research as possible to make an offer that makes sense. Of course, some people prefer to shoot fish in a barrel.

[Keeper]

From what I have seen on the LI board most ppl have to deal with a lot more when buying a house, like COA and an attorney. In FL most ppl use a realtor and they setup everything for you. Going directly to a homeowner's realtor is not going to save you any money, at least not from what I have seen

You don't have to have a real estate agent but I would suggest you get one to help you. They will be on your side. You are going to pay for one if you buy a house so you might as well get one to help you. You aren't going to pay anymore than if you try to go it alone.

[Pragmaticus]

Originally Posted by HughMcs

I am somewhat confused (which is not difficult at my age). When I am looking to purchase a home, I go on the internet, look at the real estate sites, see what type of home fits the budget and then contact the real estate company to set up an appointment to look at the property. If I like the home I will contact that agent and submit an offer. Why would I need to hire a buyer's agent. What service could I get from him that I won't get from a title search, home inspection and an attorney that would protect my interest.
Secondly my original post concerned the local custom to submit an offer. If the local custom is - there is no bargaining, take the property as is and at the listed price, then I will concentrate on properties that I think I can afford or represent a good value for my family. If the local custom allows for some bargaining wiggle room, then the field of available homes has expanded and I may want to look at a home that is at the very top of my budget and maybe a bit beyond the comfort zone because it has more to offer because I might be able to negotiate to a cost that I can afford. I don't want to waste anyone's time by looking at homes priced just above the higher end of my comfort zone that I have no chance of acquiring if the listed price is a firm sales price.

Since I passed through this I will throw my $.0002

1) The best advise I can give is study the market for sometime in an area that you want to buy and in no time you will understand which house is overpriced which one is a fire sale. So you can move quick. Houses that are priced well go in fast others, well you know.

2) If you are confident in your offer go for it regardless of what the listing price is. At the begining of my search I never "waste" time on properties that I thought were over priced but I found out they close way below what I could have submitted--I should have thrown my number too.

3) Take your time and don't over rule the short sales and foreclosure (you would need to invetigate a bit on these ones).

Above all, unless you have done this for sometime and are confortable, get a good realtor to help you through the process.

Good luck

[HughMcs]

I'm still confused and could use some advise on real estate agent practice in the area. If the sellers agent lists and shows the property just what does a "buyers agent" do? I'm not trying to sound like a wise guy but I have no idea. If I hire one, what services will be provide and how does he get paid? If I'm buying a home don't I need an attorney to review the deed, the title report and be present at the closing to make sure that all the taxes and utility bills are prorated? I'm not opposed to hiring someone that will "look after my best interests", I just need to know what interests he is protecting.

[Keeper]

In FL normally the title company does the closings and pro-rate the taxes. The utility company reads the meter and sends the former owner the bill once you tell them you need utilities on the house. If you want to pay for an attorney to look over the documents it comes out of your pocket. I have never known anyone to use an attorney unless they are paying cash but you still want a title search on the property.

As I understand a Buyer's agent is one that does not list properties only shows property.. They are paid out of the commission paid to the real estate agents. You are obligated to them. If you go directly to the real estate agent showing the property they work for the seller.

You can use a real estate agent (who also lists property) as a buyer's agent who will search for homes for you. I have always used a real estate agent.

Not sure if this helps.. maybe TampaKaren or another realtor can explain it better