Discount buyer’s agent

[ironman]

Hello,

Regular reader, very rare poster …

Here is my question (would really appreciate any feedback)
Background:
– Looking for a house by myself, well above 500K
– Enough cash for down payment, excellent credit history and paycheck
– Able to research the area, schools, etc (no need for an agent)
– Has a boilerplate offer contract, just fill in the price and make on offer
– Once offer accepted (IF), need somebody to see it done through all formalities (no work beforehand and low risk of falling trough)

Question(s) :
Since it seems rather steep for the buyers side to get paid 3% for this case, can I expect some of that amount back and how much?
Redfin offer around 1% cashback, it that the best out there?
Can real estate attorney do the job and be paid per hour?

Thank you very much

[sdduuuude]

Using an attorney to manage a process that is already spelled out is a bad idea. The attorneys have already done their work in laying out the forms/process.

Having a real agent make an offer is more appealing to the selling agent than a buyer on their own. The agent has no idea what they are dealing with if you go it alone.

I would start calling moderately experienced agents who are independent. Interview them and make offers to the ones you like.

Or, if you go it alone, make use of an experienced escrow agent. They are the ones who really know the process.

[spdrun]

The formalities are mostly the escrow firm’s job. Why hire a broker at all?

[UCGal]

An argument for using a buyers agent:
– some properties are only available for view via lockbox or showings with an agent… you’d cut yourself out of those properties. Open houses are not the entire market.
– buyers agents *might* be privvy to pocket listings that aren’t on the MLS.

Argument against buyers agent:
– if you use the listing agent you might be able to negotiate a kickback, or have them negotiate a lower price, with them kicking in some of the commissions. That seems unusual these days were sales prices are inflated by sellers paying buyers closing costs etc. (Which drives me nuts because the buyer ends up with higher prop taxes, realtors commissions are based on higher sales price, etc.)

[sdsurfer]

Quick disclaimer: I’m still licensed, but primarily work at a tech company these days. I’m only licensed to help my wife out from time to time and because I enjoy the investment side of things.

You would rather work with an attorney than a Realtor? That is crazy in my opinion. At least the Realtor gets paid nothing unless they help to close the deal whereas the attorney bills you hourly regardless.

The commission is always negotiable, but it is typically stipulated in the listing contract with the seller and tends to be between 5 and 6% split evenly (most of the time) between the listing broker and the buyers broker.

You can always ask for a credit from the buyers agent or the sellers agent. It depends on the situation…if it’s a hot property or not so much.

Personally, I’d try to get the best home for my money regardless of how much the people that are helping me do so are getting paid. All that would matter to me is a home I like in an area I like for a price I can afford (translation-as little as possible). If you can find the home yourself then do it and just write your offer through the listing agent and ask them for the credit. The tough part there is that they work for the seller primarily. If you have a buyers agent then they only work for you and you might be able to negotiate the price down more than your credit would be anyways so you spend less on the home instead of paying more to get a credit. Not always of course, but if I tell a seller I will get them X I’m going to do everything I can to get them X dollars. The buyers agent does not have that conflict of interest and they might know of a property that recently closed in the area for less to negotiate the price down. That is as much their job as helping you through the process.

Another consideration is that a lot of properties fall out of escrow for reasons other than the buyers credit and financial position. There are other reasons such as an appraisal coming in low, etc.

Good luck!

[spdrun]

– some properties are only available for view via lockbox or showings with an agent… you’d cut yourself out of those properties. Open houses are not the entire market.

I’ve called selling agents and asked to view a property in the past. Sometimes, it didn’t go over well, but most of the time I was quite successful.

As far as working with an atty vs a broker — the buyer’s broker gets paid a commission based on the sale price. The HIGHER the sale price is, the more the buyer’s agent gets paid. Does that seem right to you?

The attorney can get a pre-negotiated fee for a closing.

[sdsurfer]

You should be able to trust whoever you are working and if you dont find someone else. If I were working with a buyer I’d be trying to get them the home for at little as possible even though I get paid less. Sure there are Realtors out there that want a higher price for a larger commission…I was just never one of them. Maybe that is what led to me getting into another field. I was doing what I thought was right and getting paid less for it.

I’m sure any pre-negotiated fee with an atty only includes a certain amount of hours of work and if they find out it’s going to be more work they will charge you extra.

[spdrun]

At least around here, some charge a flat fee.

If you think about it, it’s the same with escrow agents — their fee doesn’t vary based on legwork. Or even brokers. If they close a deal for a certain price, their commission is what it is, regardless if it took ten hours or fifty.

[HLS]

Ironman,
As a Realtor (AND mortgage broker)
I’m willing to discuss this with you if you’d like to contact me. No charge to talk 😉
I’ve helped many readers/posters on this site.
Sheldon

[njtosd]

[quote=UCGal]An argument for using a buyers agent:
– some properties are only available for view via lockbox or showings with an agent… you’d cut yourself out of those properties. Open houses are not the entire market.
– buyers agents *might* be privvy to pocket listings that aren’t on the MLS.

Argument against buyers agent:
– if you use the listing agent you might be able to negotiate a kickback, or have them negotiate a lower price, with them kicking in some of the commissions. That seems unusual these days were sales prices are inflated by sellers paying buyers closing costs etc. (Which drives me nuts because the buyer ends up with higher prop taxes, realtors commissions are based on higher sales price, etc.)[/quote]

If I were a seller and found out that a qualified buyer wanted to look at my house, they would get in (lock box or not). This is something to consider including on a listing agreement – perhaps the listing agent couldn’t accompany the prospective buyer (I know they are concerned about that situation) but someone could.

[DataAgent]

“qualified buyer”

If there’s no Buyers Agent, who qualifies the buyer?

[sdduuuude]

[quote=spdrun]
The attorney can get a pre-negotiated fee for a closing.[/quote]

Well, ya. So can a gardener or an NFL linebacker, but they are not the right people for the job. Neither is an attorney.

[spdrun]

DataAgent, any seller with half a brain can also ask for PoF and Pre Qual before accepting an offer. Not rocket science here.

If they’re paranoid about safety, they can keep bear spray or a pistol around.

[spdrun]

.

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