O.K. Here’s the deal. I have found a house that I would like to make on offer on. I have not been working with a Realtor, nor have I even talked to the Realtor of the house I am interested in. So my question is, In an effort to save money, should I just go directly to the listing agent and try to get the best deal alone? Or should I bring in my own Realtor to help ptotect my best interests? I’m guessing if I do the latter, the price will be less negotiable because the commissions for two agents.
Or
Scenario 2. I will be selling a house in order to buy the new house. I am considering bringing in an agent with this proposal. I would hire them to act as my agent on the new purchase, allowing them to make a commission off of an easy, very little work deal, if they would discount the commission on the sale of my house.
Can anyone offer any advice on this situation? I’m not real sure how to best go about this. And for what it’s worth, the purchase is a bit over 200K. I’m not sure if the price effects the commission amount or not.
You could make a “coming and going” deal with either the seller’s agent or another one that you identify- probably save some commission for listing your place and buying another.
Remember that agents always represent the seller, even if you find a different agent they still have fiduciary responsibility to the seller, not to you. You could also pay a “buyer’s agent” who would represent you only.
Buying a house is a big deal. I would be certain you have expert and accountable resources at your disposal who are held fully accountable for the viability of the transaction. Saving a few thousands bucks on the front end is not a good investment if there are legal issues in a year, or ten. I’ve seen it happen.
When I bought my house I had an attorney with me every step of the way. I wouldn’t cut corners here.
A couple of thoughts. Where you live do they truly have “buyers agents” meaning they are working in your best interest or do they also have “transaction brokers” who don’t watch your interest just facilitate a deal. Just be sure you know which you are dealing with.
If you know this is the house you want you may be better off finding an attorney just to review the contract? It would save you money on the purchase if they will drop the price the amount of the coop fee.
One thing to consider also is how fast is the market moving where you live? It may not be reasonable to wait the time it will take to interview for your listing agent before you make your offer?
Maybe make the offer and negotiate the deal you want and have a lawyer review then negotiate your listing commision seperate? You probably have to crunch some numbers and talk to a listing agent to see what makes the most sense. IF the market is good you may consider selling yourself with the help of an attorney?
The seller’s agent works for the seller and may not have you best interest at heart. Their listing agreement is set and there is not much you can do. You should have your own agent in that transaction.
Your scenario 2 is a reasonable and generally acceptable idea.
The price can affect the commission. Generally, high price-lower commish.
using your own Realtor as your own “Buyer’s Agent” is hands down the only way to do it. The listing Realtor has an obligation to act in the seller’s best interests first. The listing Realtor may be a great individual, but his or her level of responsibility is clear and it is to support the seller to get them the best deal they can.
the commission paid by the seller is split between Realtors. You will not be paying more. A listing Realtor will always indicate they can handle the deal entirely on their own, which is true. But you you want your own agent working strictly for you. You can easily tell a listing Realtor too much which could benefit the seller in the negotiations on price, and seller concessions.
which brings up the other potential issue. are you paying cash or are you already approved for a mortgage? loan programs vary in terms of what seller concessions may be allowed to assist with the costs of the transaction. it is always best to know all that ahead of time so when your agent submits your bid, you are asking up front for those known items, if desired or needed, in order to get you the best deal. submitting an offer without those items up front can, in many cases, eliminate your chances of securing those concessions after the fact. plus most purchase agreements now require the submitting buyer to indicate which loan program is being used since sellers have a right to say no to certain programs in certain cases.
and yes you want a Realtor involved in the sale of your home for the same reasons noted above. remember they are commission based professionals.
In the $200K price range, the marginal savings are probably not worth the additional risk assumed. Based on the $200K price, I’m assuming you don’t live in one of the superhot markets like south Florida or coastal California so I’d guess realtors in your area still get the traditional 3% seller’s commission and 3% buyer’s commission (in SoCal, for example, sellers can offer less than 3% to buyer’s agents because the market is so damn hot that they don’t have to worry about losing a couple of potential buyers).
In any case, that means that the additional negotiating room that you gain from going without an agent is the 3% that the seller would otherwise pay your agent (seller pays both commissions; although in a sense you “pay it” in that its factored into the price). So you could go to the seller and offer $194,000 on the premise that the seller will net the same amount of money whether they sell to you at $194,000 or to someone with an Agent at $200,000. However, why should the seller want to give you 100% of the benefit of that savings? It seems to me that any rational seller would say, “ok, let’s split the difference” and give you a maximum discount of 1.5% or $3,000.
Most sellers’s agents, however, aren’t going to want to just step up to represent both sides of the transaction unless they get some kind of taste - even if it’s a few hundred bucks to do the docs for both sides (best case), that further eats into your $3,000.
I realize that $3,000 is a lot of change, but in the grand scheme of probably the most significant purchase you’ll ever make it, it may be a case of being pennywise and pound foolish.
But if you are building a house…you can get a nice break for not bringing in a buying agent, but laws prohibit specific types of commissions split transactions to the consumer.
You must know SOMEONE with a real estate license that will broker the deal for you, no?
Make sure you truly understand this concept: Both realtors have a fiduciary duty to the seller unless a written agreement has been reached and agreed to buy all parties. Period. Contact your attorney before you say or do or talk to anyone else.
Now, every realtor will grant you a ‘discount’ for being involved in the “round trip” (sale and purchase). Make sure you list your home with a reasonable commision so that other realtors will be interested in showing it. MLS services typically split the commission evenly between the listing agent and the one bringing in the buyer. Make sure your discount is coming out of your realtors pocket and not the realtor who will likely bring a buyer to your home. The commission split is the first thing a realtor looks at when deciding whether to show a property.
Don’t do it on your own. I work for a real estate attorney. Chances are the money you save on commission will be spent (and then some) on an attorney if things don’t go as planned (often the case in real estate).
I once bought a house without getting my own realtor first. It was an open house and I decided to buy it. I went to the listing agent and made a take-it-or-leave-it offer. I would pay “x” through him, and he would pay 2 points toward my closing costs (via a “seller’s credit”), or I would go find a realtor of my own and pay “x”. He would then have to give the other realtor 3 points. Guess which one he took?
Life is short. Negotiate well.
I have bought and sold 7 houses. In every single instance, the realtor was a pointless party in the middle of the transaction. Around here, they get $50-60k for listing the house and presenting a few offers. The title company does all the transaction paperwork.
Go to Home Depot and get a FOR SALE BY OWNER sign and stick it on your lawn and sell your house that way, youll save 12,000 dollars in commission by eliminating the realtor, thats money in your pocket not theirs. if your worried then get a realestate attorney to represent you, probably 500 bucks and he takes care of the whole purchase for you.
If your buying and you end up with a realtor then make sure that the seller pays the commission. Do your homework, get comparible prices and know what the market prices are.
You can also go to foresalebyowner websites and list your house in the MLS for a small fee if the sign is not doing the trick, although youll get realtors comming to your house and you have to pay their commission, its all negotiable, dont pay the 6 percent that they ask for, 2 percent is all ive ever paid to a realtor.
You get what you pay for (or don’t). But get the best for your money. Find the best Realtor you can. They’re fees are worth it. Discount brokers are discount for a reason and if things go bad anywhere along the line or afterwards you’ll likely never hear from them again. They are the ones that are in the business only for the money, not the true Realtors.
and…make sure you bone up on contract law, the latest disclosure regs and pray that nothing goes sideways in your deal. If it’s a hot market, you may also avoid running an open house every weekend. Be sure to call an agent of appraiser friend for a free market analysis so you don’t have to pay them either.
All said tongue-in-cheek of course by a real estate professional that gets tired of hearing that the services he provides are fairly meaningless.
I saved thousand’s on the sale of my house just by switching to GEICO, thats money in MY pocket and not in someone else’s. There were no Hickups or worries, just get a REAL ESTATE ATTORNEY, and your set, they act just like a realtor but waaaaaaay cheaper. hehehehheehheheh
It comes down to knowing yourself and how adept you are at handling this sort of thing. If you’ve never bought before and arent’ particularly good with contracts and accounting, you’d probably be best off getting a real-estate attorney looking out for your interests. I have bought/sold 7 houses now and every single time something in the closing documents was done incorrectly and not in my favor…you need to expect that there is a team of professionals working to screw you over as best they can, so if you don’t feel up to handling that yourself get some help. I’ve always gone it alone, but that’s me. I know my wife would have come in and signed all the documents without even reading, and she would have been screwed out of a lot of money. Also, this is a very stressful activity, having some help might take the edge off.
Buyer’s agents are there to help you find the house and negotiate the deal. If you already know what house you want, and you feel capable of reading a contract and estimating what the best deal you can get on the house is, you shouldn’t need one.
As everyone above mentioned, regular agents work for the seller always, even if they are driving you around to look at houses. Be very careful what you tell them…ie you wouldn’t want to say something like “I’d go as high as 200K but let’s start at 190.”
