no agent; going alone…any caveats?

[SD Realtor]

Rus and UR make good points… and to add anothre caviot I showed homes to 3 different people today. On two of the homes I found the slab to be cracked, in one case significantly. These were both REO homes. I noticed step cracks in both homes and by simply removing the carpets it yielded results. I highly doubt any listing agent or agent holding an open house will do that for you.

I have had a few people come to me after using redfin. If all you are looking for is a simple commission rebate there are alot of people out there who will work with you on that.

Similarly you should want an agent who wants to act as your advocate, not sell you a home. My view on agency is that the agent should provide you information that is unbiased. Whether a sale is made or not should not be of consequence. If you test your agent and they say it is a good time to buy now then I would walk away immediately. That simple litmus test alone should help you filter out most of them, including Redfin agents. If you want agents with quality then you can find them. An honest agent will say that even though the market will head lower (depending on the location) if you want to buy then I will help you as best that I can. It appears to me that the realtors posting here seem to be more then capable and quite honest. I have not done any direct business with any of them but the tone of honesty and straight forwardness seems consistent. Even though he has not posted here in awhile Jim Klinge is a really good guy as well.

Buying a home is not rocket science and if you feel capable enough, then by all means go for it. I feel pretty capable in most endeavors I undertake, even those that are non real estate related or non engineering related (those two being my specialty) yet when it comes to large investments that will affect my life for many years to come, I don’t mind investing in a some expertise to help me out.

[urbanrealtor]

[quote=Portlock]Like scaredycat, I started exploring what an agent can do for me.

Last week I interviewed a young realtor and came away with one concern which made me doubt his fiduciary responsibility to me as his client.

He said his commission is 3% of listing, and the seller’s agent also gets 3% of listing, and their payment is already included in the Listing Price. Is this usual?
[/quote]
This is almost uniformly practiced.
While the seller pays the buyer agent, the cost is reflected, more or less in the purchase price.
Generally buyers will not use a buyer’s agent if they have to shoulder the cost of the representation.
[quote=Portlock]
Also, because his payment is already figured into the LP, wouldn’t he be reluctant to submit my lowball offer? If accepted, he would get less than if I paid asking …or is it in his best interest just to get the sale even if that means he gets less money?
[/quote]In practice, contrary to theory, the buyer agent is more interested in getting the deal done than in maximizing the purchase price.
When I submit an offer that is lowball, my only reticence is that it will be a waste of my time and my buyer’s energy. That is very relevant because a discouraged buyer may decide to take a year off looking for property or may blame me for the offer’s rejection (similar to how seller’s blamed agents for properties not selling in 2005).
Generally buyer agents (I cant speak for every cheeseball agent)try to represent their client’s interest. Often that means lowering the contract price. This does not usually lower the commission amount significantly. For example, if I can knock 20k off my clients purchase price, that will cost me about $420 before taxes are considered. That amount refers to 3% gross buyer side commission (a common amount) on the $20k portion with a 30% cut to the house (my brokerage’s share for overhead). I would gladly accept a slightly smaller commission that was more certain and would result in goodwill and repeat business rather than hurt my own reputation for a small increase on a less certain commission (better deals are exponentially more likely to close). For example on a $400,000 purchase price this would mean the difference between about $8400 and about $8000. Again I can’t speak for every agent but 5% of my paycheck is not enough for me to put my name at risk (and, as agents, that’s really all we have to trade on).
On the other hand a major reduction in price means a war story and lots of referral business. I offered $530k for a place listed for $630k. They came back asking for $545k. That client’s referrals and that story presented to other buyers got me far more money than the 85k reduction in price cost me. Also, my buyer would not have bought at the asking price.

[quote=Portlock]
this is his first experience with a down cycle, and he said the majority of his time would be spent actively searching listings in real time… I guess Redfin can only get me so far?

Any comments would be appreciated.
[/quote]
If you want an idea of how to avoid this potential conflict, try this:
Approach an agent. Agree to a buyer broker relationship that specifies a certain dollar amount rather than a percentage. If he makes more, then he credits it to you at close. If he makes less, you pay the difference at closing. Make sure the dollar amount is at market rate. For example, if you intend to spend $300k, make the dollar amount 9k even. Then his only concern is representing your interests.
As an agent, I would have no problem with this. I don’t think many would.

[urbanrealtor]

[quote=Portlock]Like scaredycat, I started exploring what an agent can do for me.

Last week I interviewed a young realtor and came away with one concern which made me doubt his fiduciary responsibility to me as his client.

He said his commission is 3% of listing, and the seller’s agent also gets 3% of listing, and their payment is already included in the Listing Price. Is this usual?
[/quote]
This is almost uniformly practiced.
While the seller pays the buyer agent, the cost is reflected, more or less in the purchase price.
Generally buyers will not use a buyer’s agent if they have to shoulder the cost of the representation.
[quote=Portlock]
Also, because his payment is already figured into the LP, wouldn’t he be reluctant to submit my lowball offer? If accepted, he would get less than if I paid asking …or is it in his best interest just to get the sale even if that means he gets less money?
[/quote]In practice, contrary to theory, the buyer agent is more interested in getting the deal done than in maximizing the purchase price.
When I submit an offer that is lowball, my only reticence is that it will be a waste of my time and my buyer’s energy. That is very relevant because a discouraged buyer may decide to take a year off looking for property or may blame me for the offer’s rejection (similar to how seller’s blamed agents for properties not selling in 2005).
Generally buyer agents (I cant speak for every cheeseball agent)try to represent their client’s interest. Often that means lowering the contract price. This does not usually lower the commission amount significantly. For example, if I can knock 20k off my clients purchase price, that will cost me about $420 before taxes are considered. That amount refers to 3% gross buyer side commission (a common amount) on the $20k portion with a 30% cut to the house (my brokerage’s share for overhead). I would gladly accept a slightly smaller commission that was more certain and would result in goodwill and repeat business rather than hurt my own reputation for a small increase on a less certain commission (better deals are exponentially more likely to close). For example on a $400,000 purchase price this would mean the difference between about $8400 and about $8000. Again I can’t speak for every agent but 5% of my paycheck is not enough for me to put my name at risk (and, as agents, that’s really all we have to trade on).
On the other hand a major reduction in price means a war story and lots of referral business. I offered $530k for a place listed for $630k. They came back asking for $545k. That client’s referrals and that story presented to other buyers got me far more money than the 85k reduction in price cost me. Also, my buyer would not have bought at the asking price.

[quote=Portlock]
this is his first experience with a down cycle, and he said the majority of his time would be spent actively searching listings in real time… I guess Redfin can only get me so far?

Any comments would be appreciated.
[/quote]
If you want an idea of how to avoid this potential conflict, try this:
Approach an agent. Agree to a buyer broker relationship that specifies a certain dollar amount rather than a percentage. If he makes more, then he credits it to you at close. If he makes less, you pay the difference at closing. Make sure the dollar amount is at market rate. For example, if you intend to spend $300k, make the dollar amount 9k even. Then his only concern is representing your interests.
As an agent, I would have no problem with this. I don’t think many would.

[urbanrealtor]

[quote=Portlock]Like scaredycat, I started exploring what an agent can do for me.

Last week I interviewed a young realtor and came away with one concern which made me doubt his fiduciary responsibility to me as his client.

He said his commission is 3% of listing, and the seller’s agent also gets 3% of listing, and their payment is already included in the Listing Price. Is this usual?
[/quote]
This is almost uniformly practiced.
While the seller pays the buyer agent, the cost is reflected, more or less in the purchase price.
Generally buyers will not use a buyer’s agent if they have to shoulder the cost of the representation.
[quote=Portlock]
Also, because his payment is already figured into the LP, wouldn’t he be reluctant to submit my lowball offer? If accepted, he would get less than if I paid asking …or is it in his best interest just to get the sale even if that means he gets less money?
[/quote]In practice, contrary to theory, the buyer agent is more interested in getting the deal done than in maximizing the purchase price.
When I submit an offer that is lowball, my only reticence is that it will be a waste of my time and my buyer’s energy. That is very relevant because a discouraged buyer may decide to take a year off looking for property or may blame me for the offer’s rejection (similar to how seller’s blamed agents for properties not selling in 2005).
Generally buyer agents (I cant speak for every cheeseball agent)try to represent their client’s interest. Often that means lowering the contract price. This does not usually lower the commission amount significantly. For example, if I can knock 20k off my clients purchase price, that will cost me about $420 before taxes are considered. That amount refers to 3% gross buyer side commission (a common amount) on the $20k portion with a 30% cut to the house (my brokerage’s share for overhead). I would gladly accept a slightly smaller commission that was more certain and would result in goodwill and repeat business rather than hurt my own reputation for a small increase on a less certain commission (better deals are exponentially more likely to close). For example on a $400,000 purchase price this would mean the difference between about $8400 and about $8000. Again I can’t speak for every agent but 5% of my paycheck is not enough for me to put my name at risk (and, as agents, that’s really all we have to trade on).
On the other hand a major reduction in price means a war story and lots of referral business. I offered $530k for a place listed for $630k. They came back asking for $545k. That client’s referrals and that story presented to other buyers got me far more money than the 85k reduction in price cost me. Also, my buyer would not have bought at the asking price.

[quote=Portlock]
this is his first experience with a down cycle, and he said the majority of his time would be spent actively searching listings in real time… I guess Redfin can only get me so far?

Any comments would be appreciated.
[/quote]
If you want an idea of how to avoid this potential conflict, try this:
Approach an agent. Agree to a buyer broker relationship that specifies a certain dollar amount rather than a percentage. If he makes more, then he credits it to you at close. If he makes less, you pay the difference at closing. Make sure the dollar amount is at market rate. For example, if you intend to spend $300k, make the dollar amount 9k even. Then his only concern is representing your interests.
As an agent, I would have no problem with this. I don’t think many would.

[urbanrealtor]

[quote=Portlock]Like scaredycat, I started exploring what an agent can do for me.

Last week I interviewed a young realtor and came away with one concern which made me doubt his fiduciary responsibility to me as his client.

He said his commission is 3% of listing, and the seller’s agent also gets 3% of listing, and their payment is already included in the Listing Price. Is this usual?
[/quote]
This is almost uniformly practiced.
While the seller pays the buyer agent, the cost is reflected, more or less in the purchase price.
Generally buyers will not use a buyer’s agent if they have to shoulder the cost of the representation.
[quote=Portlock]
Also, because his payment is already figured into the LP, wouldn’t he be reluctant to submit my lowball offer? If accepted, he would get less than if I paid asking …or is it in his best interest just to get the sale even if that means he gets less money?
[/quote]In practice, contrary to theory, the buyer agent is more interested in getting the deal done than in maximizing the purchase price.
When I submit an offer that is lowball, my only reticence is that it will be a waste of my time and my buyer’s energy. That is very relevant because a discouraged buyer may decide to take a year off looking for property or may blame me for the offer’s rejection (similar to how seller’s blamed agents for properties not selling in 2005).
Generally buyer agents (I cant speak for every cheeseball agent)try to represent their client’s interest. Often that means lowering the contract price. This does not usually lower the commission amount significantly. For example, if I can knock 20k off my clients purchase price, that will cost me about $420 before taxes are considered. That amount refers to 3% gross buyer side commission (a common amount) on the $20k portion with a 30% cut to the house (my brokerage’s share for overhead). I would gladly accept a slightly smaller commission that was more certain and would result in goodwill and repeat business rather than hurt my own reputation for a small increase on a less certain commission (better deals are exponentially more likely to close). For example on a $400,000 purchase price this would mean the difference between about $8400 and about $8000. Again I can’t speak for every agent but 5% of my paycheck is not enough for me to put my name at risk (and, as agents, that’s really all we have to trade on).
On the other hand a major reduction in price means a war story and lots of referral business. I offered $530k for a place listed for $630k. They came back asking for $545k. That client’s referrals and that story presented to other buyers got me far more money than the 85k reduction in price cost me. Also, my buyer would not have bought at the asking price.

[quote=Portlock]
this is his first experience with a down cycle, and he said the majority of his time would be spent actively searching listings in real time… I guess Redfin can only get me so far?

Any comments would be appreciated.
[/quote]
If you want an idea of how to avoid this potential conflict, try this:
Approach an agent. Agree to a buyer broker relationship that specifies a certain dollar amount rather than a percentage. If he makes more, then he credits it to you at close. If he makes less, you pay the difference at closing. Make sure the dollar amount is at market rate. For example, if you intend to spend $300k, make the dollar amount 9k even. Then his only concern is representing your interests.
As an agent, I would have no problem with this. I don’t think many would.

[urbanrealtor]

[quote=Portlock]Like scaredycat, I started exploring what an agent can do for me.

Last week I interviewed a young realtor and came away with one concern which made me doubt his fiduciary responsibility to me as his client.

He said his commission is 3% of listing, and the seller’s agent also gets 3% of listing, and their payment is already included in the Listing Price. Is this usual?
[/quote]
This is almost uniformly practiced.
While the seller pays the buyer agent, the cost is reflected, more or less in the purchase price.
Generally buyers will not use a buyer’s agent if they have to shoulder the cost of the representation.
[quote=Portlock]
Also, because his payment is already figured into the LP, wouldn’t he be reluctant to submit my lowball offer? If accepted, he would get less than if I paid asking …or is it in his best interest just to get the sale even if that means he gets less money?
[/quote]In practice, contrary to theory, the buyer agent is more interested in getting the deal done than in maximizing the purchase price.
When I submit an offer that is lowball, my only reticence is that it will be a waste of my time and my buyer’s energy. That is very relevant because a discouraged buyer may decide to take a year off looking for property or may blame me for the offer’s rejection (similar to how seller’s blamed agents for properties not selling in 2005).
Generally buyer agents (I cant speak for every cheeseball agent)try to represent their client’s interest. Often that means lowering the contract price. This does not usually lower the commission amount significantly. For example, if I can knock 20k off my clients purchase price, that will cost me about $420 before taxes are considered. That amount refers to 3% gross buyer side commission (a common amount) on the $20k portion with a 30% cut to the house (my brokerage’s share for overhead). I would gladly accept a slightly smaller commission that was more certain and would result in goodwill and repeat business rather than hurt my own reputation for a small increase on a less certain commission (better deals are exponentially more likely to close). For example on a $400,000 purchase price this would mean the difference between about $8400 and about $8000. Again I can’t speak for every agent but 5% of my paycheck is not enough for me to put my name at risk (and, as agents, that’s really all we have to trade on).
On the other hand a major reduction in price means a war story and lots of referral business. I offered $530k for a place listed for $630k. They came back asking for $545k. That client’s referrals and that story presented to other buyers got me far more money than the 85k reduction in price cost me. Also, my buyer would not have bought at the asking price.

[quote=Portlock]
this is his first experience with a down cycle, and he said the majority of his time would be spent actively searching listings in real time… I guess Redfin can only get me so far?

Any comments would be appreciated.
[/quote]
If you want an idea of how to avoid this potential conflict, try this:
Approach an agent. Agree to a buyer broker relationship that specifies a certain dollar amount rather than a percentage. If he makes more, then he credits it to you at close. If he makes less, you pay the difference at closing. Make sure the dollar amount is at market rate. For example, if you intend to spend $300k, make the dollar amount 9k even. Then his only concern is representing your interests.
As an agent, I would have no problem with this. I don’t think many would.

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