real estate agents

User Forum Topic
Submitted by fullerjenkins on June 26, 2008 - 11:47am

Why are so many people scared to sell and buy property without a real estate agent by their side? With a cut of about 7% of the home’s selling price, you’d think more people would try to sell on their own.

Let’s do the math in order see how much these people make. House A finds out that its property is worth $300,000. At a 7% commission rate, the agent makes $21,000 on this transaction. Let’s say in order to offset part of the commission rate, House A wants to list their property at $311,000. Now, the seller will lose out on $10,000 of property value (after paying the agent the $21,000) and the buyer will pay an extra $11,000 which goes straight to the agent.

Think about it, the main function of a real estate agent is to introduce the buyer and seller (an introductory service). Last year alone, real estate agents made $63 billion on transactions that could have easily been made without paying these high commission rates.

The FSBO (for sale by owner) sites are a great marketplace where buyers and sellers can meet without the cost of a real estate agent. Conduct a search engine and look for yourself that there is really no need to pay high commission rates for an introductory service that can be done online. You'll find services such as PropertyPig and BuyOwner that have listings nationwide.

‹ What is this called? Condo Association foreclosing on Wells Fargo ›
Having bought and sold dozens
Submitted by EconProf on June 26, 2008 - 1:09pm.

Having bought and sold dozens of properties over many years, both with and without brokers, I can categorically state that almost no one should do it without a carefully-selected broker.
There are so many pitfalls a broker can steer you away from, so many negotiating tactics to alert you to, so much paperwork, and so much market information a good broker can bring to the average buyer or seller, that it is just naive to worry about the 3 - 5% (not 7%) they will cost.

Frankly, the biggest advantage of having an agent for each side is to insulate the buyer and seller from each other. This is a zero-sum game and it is impossible for egos to not get in the way. Good brokers keep everything civil and know how to move the deal along past the landmines.

In today's market, with sellers in denial, the seller's agent can be the best friend the buyer ever had. They can pound some sense into their head and get the sale done.
Admittedly, a lot of agents and brokers are NOT capable, or hard working, or completely honest. But a lot are--your job is to find them.

I am not a Realtor!!! Buying
Submitted by La Jolla Renter on June 26, 2008 - 1:41pm.

I am not a Realtor!!!

Buying without one is much different than selling without one, just from a liability standpoint.

All the studies I have read and just by personal observation, you come out a head with a top notch listing agent.

When you list a house for sale by owner, all the buyers want you to give them the discount. That's what I would be thinking anyway.

I see four groups: 1) Those
Submitted by sdduuuude on June 26, 2008 - 8:33pm.

I see four groups:

1) Those who know what they are doing and believe they know what they are doing. They won't use a realtor and they'll do fine.

2) Those who know what they are doing but don't think they know what they are doing. They will use a realtor and will be wasting the money they pay to the agent.

3) Those who don't know what they are doing but think they do. They will not use a realtor and will get screwed.

4) Those who don't know what they are doing and realize it. They will use a realtor and get good value for what they pay.

Which group are you in?
Maybe we need a poll.

Agreed that selling is much
Submitted by toddt on June 26, 2008 - 8:46pm.

Agreed that selling is much different than buying. Comes down to negotiating skills in my opinion when buying.

As for selling, I like the value a good realtor provides in terms of market knowledge and marketing, especially in this market.