ZipRealty.com or Realtor?

[ybc]

I’d use a realtor — a competent one and professional one. I don’t think that I’d do as good a job, and won’t have the time anyway.

[Anonymous]

LACrash, you’re right that the sales commission percentage that has been contractually agreed upon between the seller and the listing agent is customarily split between the listing agent and the buyer’s agent (thought not always exactly 50/50). However, unless you are a real estate broker or salesperson licensed by the State of California, it is illegal for the listing agent to share any portion of his or her commission with you. They could not legally do that even if they wanted to. As a buyer, you’re better off using an experienced, professional realtor who can give you good advice and help you avoid what can be some pretty costly mistakes, especially since you’re not going to be able to pocket the buyer’s agent’s commission anyway.

[powayseller]

I think SD Realtor wrote that if you represent yourself, you can request the 3% buyer’s agent coop is given to you, or deducted off the sales price. So you should be able to save 3% by representing yourself.

I’d also like to add that one thing that I absolutely hate, is that many realtors discourage, or even scold me, for talking with my other party. Don’t let them tell you that you have to go only through them. I find it necessary and useful to have some discussions directly with my seller and buyer, and any realtor who tries to boss me around, is going to get an earful (just ask my buyers’ agent about the big lecture where I told her off, because she said I shouldn’t be calling my buyers).

Now my only question is: is there any data at all, or any anecdotes, about buyers representing themselves? It sure has the potential to save a lot of money!

[Anonymous]

Powayseller,

I’m not sure what SD Realtor had to say on this subject, but the following might be of interest to you on this topic.

California Business & Professions Code section 10137:

Unlawful Employment or Payment of Compensation – Penalty
10137. It is unlawful for any licensed real estate broker to employ or compensate, directly or indirectly, any person for performing any of the acts within the scope of this chapter who is not a licensed real estate broker, or a real estate salesman licensed under the broker employing or compensating him; provided, however, that a licensed real estate broker may pay a commission to a broker of another State.
No real estate salesman shall be employed by or accept compensation from any person other than the broker under whom he is at the time licensed.
It is unlawful for any licensed real estate salesman to pay any compensation for performing any of the acts within the scope of this chapter to any real estate licensee except through the broker under whom he is at the time licensed.
For a violation of any of the provisions of this section, the commissioner may temporarily suspend or permanently revoke the license of the real estate licensee, in accordance with the provisions of this part relating to hearings.

[PerryChase]

I don’t think that most buyers would represent themselves in a transaction. Using a discount broker such as ZipRealty or SD Realtor, and getting a rebate is a good alternative to a full-service broker — just like using a discount stock broker works fine for many.

[Daniel]

I have a question for the realtors on this board: is there a way to figure out what is the buyer’s agent commission on new construction sold by the builder? Sometimes they say in their ads, for example, “3% broker co-op”. But more often than not they imply there is a broker co-op, without specifying how much it is (for example “You must escort your buyer to the sales office & register them on their very first visit to the community to receive a broker referral”). Is there a hidden MLS field where the commission is listed?

Thanks,
Daniel

[sdduuuude]

removed duplicate.

[sdduuuude]

Powayseller said “But for those braver and more independent than I, what would be your source of info to know how to write contracts and negotiate?”

Simple experience of having been through it before. When I bought my first house, I needed a realtor, but I made sure that in the process of buying, I learned how to do it myself.

I have confidence that I when I read a legal contract such as an offer to purchase, I will either 1) understand what it means or 2) ask someone.

Those doing it themselves need some kind of help/legal advice, even if not a realtor. Hire a RE attorney and pay them $1000 to read docs and cover your butt as the process moves along.

I mean, I do lots of construction work at my house, but I have contractors come by and give me advice as I go.

Also, just pick up the phone and ask the selling agent – “I am writing an offer on this house and wondered what is the most common number of days for contingencies and what would make it easiest on you?”

[SD Realtor]

Hi guys –

Careful for sure… On commissions, here in California when you establish a contract with the listing agent your contract states both what you will pay the listing agent, AND what you will offer as a commission to a buyers agent.

1 – All commissions are negotiable by law. When you do sign that contract you can in fact tell your listing agent, okay if YOU OR ANY AGENT IN YOUR COMPANY represents the buyer, I want to pay LESS then what I would offer a buyers agent from an outside company. YOU CAN DO THAT and some large firms will indeed agree to do that. Most all of the smaller independents will.

2 – As texguy pointed out the DRE law is very clear. What I said was if you choose to represent yourself, you can negotiate with the Sellers agent, or the seller, to REDUCE the price by the intended buyers agent commission, if you were to represent yourself. (which again I am not a big fan of)

Daniel –

At the bottom of all MLS listings the co-op offered to the buyer is disclosed. However this is only seen when an agent logs in with thier username. If the listings are emailed out this information is distilled out. Also as recently as a year ago most of the developers here in SD would not talk to Realtors. Now most all of them are BEGGING us to bring buyers over. They do however make us accompany our buyers.

One of the biggest mistakes (IMO) that people make is not using a Realtor when they work with new developments. In general the private contracts you sign when you work with the developers are amongst the most one sided I have seen. The people who further mire themselves down by working with the preferred lenders of the developers in order to get some closing costs paid for may indeed be hurting themselves in the long run by not shopping for better financing from the other 10 billion sources to finance a home. The smart person will use a Realtor to get the new home, then use the rebate from the Realtor to pay for the closing costs. I can assure you the Realtor will be much more discriminating regarding that purchase contract then the homebuyer would be. This is TRIPLE TRUE with condo conversions. Also no the price the developer charges does not go up if you bring in your own Realtor.

[Anonymous]

I agree with SD Realtor 100%. The best thing to do as an intelligent, educated, Internet-savvy buyer (as people on this Board all are) is to find the property you want, then bring in a strong, capable buyer’s agent to take over from there. Many buyer’s agents are happy to rebate a significant part of their commission to you if you’ve already found the home and they won’t have to drive you all over creation for months. It is a mistake to underestimate the complexity of the sales contract, the required paperwork, the value of knowing the market intimately (a good agent will know which streets have bad soils and can suggest you have the foundation inspected extra-carefully or maybe have a soils test done, for example), etc., and there are a million ways you can screw up the transaction, or fail to maximize your benefit, if you don’t know what you’re doing. Although I’m an attorney and consider myself competent to represent myself, I would never do that in buying a house, just like the people who try to save $2,000 by using a do-it-yourself will kit instead of using an experienced estate attorney are asking for trouble.

[Anonymous]

If the buyer and seller are both intelligent and Internet savvy, then there is no need for any agent. Do all the paperwork yourselves and save the 6%. For the buyer, this means you can effectively get the property for 6% less.

For the Internet savvy people on this board, why on earth would you need a buyers agent? That is so old school..

[powayseller]

sduuude, if you ask the selling agent for advice on filling out our offer form, you are in essence letting your opponent represent you. Not a good idea. The purpose of having a pro, is because they represent what is best for YOU, not what is convenient for the seller.

deadzone, how many homes have you bought and sold?

I buy all my cars used and get them inspected by a mechanic, use carfax, etc. I save 20% minimum, from a used car dealer’s price. I’m an independent savvy woman, I like to think. But I also realize when I’m better served with a professional, whether a real estate attorney, a realtor, a CPA. I don’t do my own taxes either.

I wish we could have an insider’s view of a person who bought a home without a realtor, to tell us the advantages, if any, and the pitfalls. I hope they will be open enough to admit the shortcomings of that transaction.

[powayseller]

sduuude, if you ask the selling agent for advice on filling out our offer form, you are in essence letting your opponent represent you. Not a good idea. The purpose of having a pro, is because they represent what is best for YOU, not what is convenient for the seller.

deadzone, how many homes have you bought and sold?

I buy all my cars used and get them inspected by a mechanic, use carfax, etc. I save 20% minimum, from a used car dealer’s price. I’m an independent savvy woman, I like to think. But I also realize when I’m better served with a professional, whether a real estate attorney, a realtor, a CPA. I don’t do my own taxes either.

I wish we could have an insider’s view of a person who bought a home without a realtor, to tell us the advantages, if any, and the pitfalls. I hope they will be open enough to admit the shortcomings of that transaction.

[Anonymous]

My brother just sold his place with no agents on either side, this is the ideal. I sold my place a few years ago using a discount agent who charged .9%. The goal was to find a buyer to come without an agent but that was difficult in those days because the public had no access to the MLS like they do today. If my buyer didn’t have an agent, one or both of us could have saved the 3% on the buyers side.

[PerryChase]

New York Times

 

article on 6% and discount brokers.

I might give zip realty a try whem I’m ready to buy.

[Author]

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