Buyer Agent Thoughts?

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gore_martin_IHB

New member
I'd like to get everyone's take on the use of a Buyer Agent. Like most people on the forum, I regularly scan the MLS, Zip Reality, Zillow, and other real estate websites.





Of course the first question the listing agent asks me when I walk into an open house is whether I have an agent representing me. I usually dodge this question by saying that I'm just looking. At some point if I find the property of my dreams, I'll want to make a low-ball offer. What are some strategies that you've used? Should I go find a buyer agent? Or is it better to ask the listing agent to also represent me, but ask for part of the commission back?





Finally, is the typical buyer agent 2.5% commission? So given this, maybe I find a friend who has a broker license and tell them they can make a quick 1% if they give me back 1.5%? What are some of the strategies/thoughts that you've used?
 
<p>I have recently come across <a href="http://www.buysiderealty.com">www.buysiderealty.com</a>, an online agent that has an interesting twist on the conventional RE transaction. They rebate you 75% of the commission they earn on the transaction. You can either take this as a credit on escrow, or take it in cash after the transaction closes. The details are on the website, but the point is you do everything yourself, but when it comes to discussing representation, you disclose that buysiderealty.com is your broker (they give you a business card you can print and use as proof of the relationship).</p>

<p>To me, this idea is getting us one step closer to lowering brokerage costs (someone still has to come up with a sell-side version of this, ZipRealty may be a step in that direction- comments?)...</p>

<p>Once (if) I am ready to buy, I will look at buysiderealty more closely...</p>
 
<p>There is another realty called redfin.com which I believe is owned by Microsoft co-founder. They do both buy and sell transactions. It is a little slow but very good interactive graphical representation of properties with all types of filters. It is worth checking out.</p>

<p>When we are ready to buy at the end of this year and if we are not going to builder for new house, we will go with these people. This is like free money to decorate the house you purchased. I believe this concept will become more popular in the future when prices are higher and not too many people need advice in what to buy. If I had listened to a realtor last Novermber, I would have purchased a house for $1.1m (asking price $1.159m). The identical house in same neighborhood with larger homesite is listed for below $1m and there are 3 to chose from...</p>

<p>For some doubters, E-Trade, Ameritrade and other online brokers are doing very well in the space shared by full service brokers such as Meriill Lynch, Smith Barney etc.</p>

<p> </p>
 
Excellent question? I have a realtor friend that I've been asking to submit "low ball offers." However, despite our friendship I get the feeling that she subconsciously pushes me to buy; secondly, b/c she works under a broker the cut that I would get back from her cut would be a lot less than 75%.
 
Last spring, I used e-liststate.com, a flat-fee service to list my home for only $500. By not paying the listing commission, I was able to lower the asking price by 20K and sold my home in a reasonable time frame. I paid 2.5% to the buyer's agent. I found that below 2.5%, most buyer agents won't show your home.


E-liststate also has $2,999 flat fee for buyers. This is even better than buysiderealty.com's 75% rebate for typical OC home prices. You'll also get a free home inspection and up to 2-hr consultation with an attorney if needed. If I were a buyer, I'd use a flat fee broker like e-liststate.





http://www.e-liststate.com/els_buyers.html
 
<p>I am a big fan or Buyside Realty. I've used them to put in 2 offers and the process was great. They are the only broker/agents that I know of that offer 75% of the commission back. Redfin is new and I believe they only offer 66%. Ziprealty comes in at 20%. </p>

<p>Only downside is that the website does not have the most current info. I generally use ziprealty and then head over to buyside. Additionally, you have to visit the houses with the listing agent or the home owner (Buyside makes the appointments for you). I prefer this way, it allows me to get a better insight into the seller's situation.</p>

<p>I've tried using friends of friends to purchase and the most they were willing to part with was 50%.</p>
 
<p>I've just started using <a target="_blank" href="http://www.redfin.com">Redfin</a> links in the blog posts. Their website is much more advanced than <a target="_blank" href="http://www.realtor.com/">Realtor.com</a> and unlike <a target="_blank" href="http://www.ziprealty.com/">ZipRealty</a>, they do NOT require you to register or login before you can use the website. They only recently expanded into Southern California and I'm looking into partnering with them on a few things. I haven't yet checked out <a target="_blank" href="http://www.buysiderealty.com/">BuySide Realty</a> or <a target="_blank" href="http://www.e-liststate.com/">e-ListState</a> but will do so now. </p>

<p>I encourage everyone to continue posting any experiences (good and bad) you have with these and any other companies.</p>
 
<p>brealiving: <em>"I am a big fan or Buyside Realty. I've used them to put in 2 offers and the process was great."</em></p>

<p>Inquiring minds want to know: Did you try lowball offers (more than 5-10% below asking price)? Was there any push back from them, or did they just pass along your offer as a disinterested third party?</p>
 
<p><em>stillConfused: "When we are ready to buy at the end of this year and if we are not going to builder for new house, we will go with these people."</em></p>

<p>Quite a few of the builders in OC offer 3%-5% to agents if you visit the property for the first time with the agent. I wonder if you can use these discount online agents to represent you with a builder.</p>

<p>By the way, this is the reason I never sign the guest card at any of the properties. If I end up buying from a builder who offers the commission, I will go in with an agent friend for the "first" time. </p>
 
<p>Also, buyer's agents seem to be quite desperate. I live in an apartment complex in MV and I have had two random agents in the last week knock on my door to ask me if I was considering buying a house. Not sure how much business they can drum up this way but clearly, their phones aren't ringing. </p>
 
Another approach is to do away with agents completely and deal with the owner directly. Say you found a listing that you may be interested, go to the open house or drive by and ask the owner to see it. If you're still interested then send the owner a letter that says you're interested but you're not willing to pay the commissions and ask the owner to call you if the house isn't sold when the listing expired. With this slow market, there's a good chance that the house would still be available. It takes more work but you'll be able to save all the commissions.
 
<p>ABSOLUTELY - YOUR RIGHT ON TERAGO.</p>

<p>SKIP THE AGENTS COMPLETELY. MY SISTER IS IN ESCROW ON A $979,000 home, which was reduced by $100,000 because she placed a note in the mailbox of the homeowner saying they're willing to enter into escrow asap if they're willing to cut their listing agent loose and mark down the price substantially. The house was on the market for over 120 days even though it was priced comparable to other listings and recent sales. Buyers are just scared right now. Other sellers are just pulling their homes off the market. BUT some DO need to sell because of a relocation or other reasons. My sister truly loves the home but was only willing to buy now if the price was right.</p>

<p>The listing said "SELLER EXTREMELY MOTIVATED." </p>
 
Buster - usually even after the expiration of a listing, the agent retains his rights to a commission up to a certain time period if the house ever gets sold. The seller should check the listing contract. Does it affect the buyer if it is the seller who is paying for the house anyway? Possible ... if the agent finds out, he can sue for the commission earned as "the procuring cause" of a ready, willing and able buyer, files a lis pendens, and ties up the property.
 
All -





A listing agent is the agent of the seller, and all others, including the agents who bring in the buyers (called sub-agents of the listing agent) - that is why you see a split in the commission between the listing agent and the sub-agents at closing and why the seller is the "client "of the listing agent, and the buyer is the "customer" - unless of course there is a buyer's agent. Believe me, some agents don't even grasp the agency concept between the <strong>buying</strong> agent versus the <strong>buyer's </strong>agent. The agency law is quite complicated and you should tread it carefully.





I don't advocate signing an exclusive buyer's agent representation (sometimes the buyer contracts to pay the agent a commission regardless of who actually finds the property, who negotiated the price, etc.), but should look into non exclusive buyer's agency.





<strong></strong>
 
IIIrvine - My sister is an attorney. There was no such provision. The seller just let the agent try and sale the house. When the listing expired, they went the FSBO route.
 
<a href="../../../account/64/">IIIrvine</a>,





<em>"Does it affect the buyer if it is the seller who is paying for the house anyway?"





</em>Where do you think the seller gets the money to pay the agents? ... from the buyer.


An agent would say something like that to lure a naive buyer into signing a contract to represent the buyer.





The listing agent can only sue the seller, not the buyer. Also, the burden of proof is on the agent not to mention the bad press so


the chance of getting sued is pretty slim.





To be safe, if there is a protection period in the listing contract, the parties should wait before entering into a contract or re-list with a flat fee broker.


The protection period doesn't apply if the property is re-listed with another brokerage.
 
<p>crucialtaunt.</p>

<p>Regarding our offers, both were in Yorba Linda. The first house was listed at 649k and dropped to 629k. We put in an offer at 578k. The seller countered with 588k. We didn't counter or accept that offer. She sold it for 598k.</p>

<p>The second house was more recent. Originally listed for 739k dropped to 649k (bought for 640k in 2004). Needed carpet and paint update, everything else was brand new. We offered 610k. Realized it was a short sale and the lender said no. Went to auction and sold for 541k. The new owners listed it for 649k after paint and carpet and sold in 3 days for 649k.</p>

<p>I just looked through Redfin's site and it seems a lot nicer than Buyside. However, only giving 2/3s back is weak and their agent will only come out once for free. Granted, BuySide's agent hasn't come out too often, but they are not a full-service brokerage. </p>
 
brealiving, nice post! we need more posts with examples of specific numbers offered and declined. i'd offer my own, but i've never bidded more than 10k below asking price. (note: my offers occurred in 2004, not nowadays)
 
"Where do you think the seller gets the money to pay the agents? ... from the buyer."





Not always. In a hot market, yes, b/c the seller simply pads up the commission in the listing price. In a slow market, he eats the cost if he wants to market his property competitively, and if he really needs to sell the home.





"The listing agent can only sue the seller, not the buyer. "





I never did say the buyer should be sued, and there is no legal basis for suing the buyer, unless of course, if it is for something stupid, like interference with a contract, or if in a buyer agency situation.





"The burden of proof is on the agent not to mention the bad press so the chance of getting sued is pretty slim."





Absolutely the burden of proof is on the plaintiff (the broker) who has a good chance of winning if the seller is trying to defraud the broker out of his commission. And...it is not the agent that makes the decision, it is the broker. If the amount at stake is small, say commission on a $200,000 home, probably not especially as you've said, bad PR for the company. If it involves a high price property, the commission is substantial. Does it ever make it all the way to court? Probably not, but the threat of a lawsuit and a lis pendens will give the seller who needs to sell his property a lot of incentive to negotiate something.





"My sister is an attorney. There was no such provision. The seller just let the agent try and sale the house. When the listing expired, they went the FSBO route."





The provision is referred to as the "Protection Period." You can always try to FSBO your property. The advent of the Internet is a wonderful tool for buyers and sellers alike, and cut out the middle guys who, IMO, do not deserve the compensation they are being paid, which BTW, is why the NAR cartel is so protective of its industry (topic for another discussion). But, your attorney sister is wrong because the Protection Period provision is regularly negotiated just as you would with commission fees etc when you list your home. Seasoned agents will ask for for 90-day or longer, but as with all contracts, everything is negotiable. The next time you list a home, you should ask the agent to explain it, that is, if you ever decide to use one. If you FSBO, you owe no one a commission if it is through your own marketing efforts that you procure a buyer.
 
Excerpt from For Sale By Owner
















How to prevent paying comimssions after you end a relationship









<p><strong>Q</strong> If a real estate agent shows you a home and the owner subsequently takes it off the market, how long do you have to wait before buying directly from the owner, without incurring a broker’s fee?
















Is it likely that the broker will sue you to get his or her commission?
















- E.W., Waltham
















<strong>A</strong> Most sellers’ contracts specify that if someone buys the home within a stated time after the listing expires (usually 90 days, but sometimes longer), the broker still gets a commission.
















But in the case you describe, the bigger issue is whether you and the seller are trying to deliberately defraud the broker out of his commission.</p>

<p>An agent has a pretty strong argument for being entitled to a commission if he:


















“introduces” you to a property;
















this introduction leads to your decision to buy.
















Based on the circumstances you describe, I’d say there’s a strong possibility that the broker would sue the seller (and possibly you) if he doesn’t get his commission.


</p>

<p><em>Here's a suggestion: If you want to reserve the option to sell on your own after a period of time, when you hire your real estate agent, negotiate his service fees. All fees are negotiable. Ask your agent to strike the 90-day post-listing commission clause unless you sell to someone the agent introduces you too. There is simply no reason you should pay a real estate agent commission for a house you sell to someone who contacts you through a flat fee service after your relationship with the agent ended. Make sure that is stated explicitly in your contract. If your agent has a problem with that, find another agent.</em></p>












http://blog.ihsrealty.com/public/blog/122462?archive=Daily+.2007-01-13
 
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