Why do we need a real estate agent?

[Anonymous]

I would check out Redfin.com or better yet I-Agent.com if you are looking for an agent but are comfortable doing the search on your own first. They will rebate 1.75% to 2% of the sale price to you at closing. Had a great experience with I-Agent but it was my 4th real estate purchase in the last 5 years so I knew exactly what I wanted.

[Anonymous]

Anonymous wrote:Wow! I wish I had your real estate agent! I've gone around with several and they're horrible. They spend more time making me sign commision papers than showing me the houses. I've also never had one suggest another house or show me houses that I didn't find myself.

A question to the group - do most buyer agents have you sign an exclusion clause/contract for their services??

Our agent was excellent and he never made us sign anything. He didn't have to - he was very good at his job and after a few visits with him we were exclusive with him without signing. I feel like the good agents don't need to have you, as a buyer, sign something.

[Anonymous]

Anonymous wrote:This is a genuine question from a first-time home buyer. We are considering buying a home, and DH is adamant that he doesn't want to use an agent because he begrudges the fee. I have a feeling there are things we don't know about that a realtor would help us with, but I'm also uneasy at the dollar amount (we're looking in the $1.3 million range, so the commission seems like a lot of money to us when we think about it in dollars). We're looking in a very specific neighborhood that we're pretty familiar with, and I've been eyeing the market in this neighborhood for a long time. So I don't need help finding a place or determining what a reasonable offer price would be for any houses that we like. Occasionally we look at houses that are "for sale by owner," so in those instances the seller wouldn't have an agent either. (If that's right, and if we did have an agent, then would the agent get the entire 6% commission to herself, or would she just get 3%?)

What can an agent do for us that, say, a real estate lawyer could not? I'm assuming a lawyer would be cheaper because she'd get paid by the hour, so reviewing/drafting whatever documents are needed and...I'm not sure what else.

Thanks for any input. This is absolutely nothing against real estate agents. I don't want to screw this up, but I also don't want to pay extra if we don't have to, just like I understand when new clients come to me and want to save money if possible. I don't take it personally!

so your husband, with no prior experience on home buying, wants to spend $1.3M on a house and do it without any representation, letting the seller's agent pocket the entire 6% commission. that does not sound smart to me. but I am sure ther seller's agent will be thrilled.

never heard of FSBO at that price point, and I would be really very weary

[Anonymous]

Anonymous wrote:

Anonymous wrote:This is a genuine question from a first-time home buyer. We are considering buying a home, and DH is adamant that he doesn't want to use an agent because he begrudges the fee. I have a feeling there are things we don't know about that a realtor would help us with, but I'm also uneasy at the dollar amount (we're looking in the $1.3 million range, so the commission seems like a lot of money to us when we think about it in dollars). We're looking in a very specific neighborhood that we're pretty familiar with, and I've been eyeing the market in this neighborhood for a long time. So I don't need help finding a place or determining what a reasonable offer price would be for any houses that we like. Occasionally we look at houses that are "for sale by owner," so in those instances the seller wouldn't have an agent either. (If that's right, and if we did have an agent, then would the agent get the entire 6% commission to herself, or would she just get 3%?)

What can an agent do for us that, say, a real estate lawyer could not? I'm assuming a lawyer would be cheaper because she'd get paid by the hour, so reviewing/drafting whatever documents are needed and...I'm not sure what else.

Thanks for any input. This is absolutely nothing against real estate agents. I don't want to screw this up, but I also don't want to pay extra if we don't have to, just like I understand when new clients come to me and want to save money if possible. I don't take it personally!

so your husband, with no prior experience on home buying, wants to spend $1.3M on a house and do it without any representation, letting the seller's agent pocket the entire 6% commission. that does not sound smart to me. but I am sure ther seller's agent will be thrilled.

never heard of FSBO at that price point, and I would be really very weary

I would ask the seller's agent to discount the 6% off the price

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:This is a genuine question from a first-time home buyer. We are considering buying a home, and DH is adamant that he doesn't want to use an agent because he begrudges the fee. I have a feeling there are things we don't know about that a realtor would help us with, but I'm also uneasy at the dollar amount (we're looking in the $1.3 million range, so the commission seems like a lot of money to us when we think about it in dollars). We're looking in a very specific neighborhood that we're pretty familiar with, and I've been eyeing the market in this neighborhood for a long time. So I don't need help finding a place or determining what a reasonable offer price would be for any houses that we like. Occasionally we look at houses that are "for sale by owner," so in those instances the seller wouldn't have an agent either. (If that's right, and if we did have an agent, then would the agent get the entire 6% commission to herself, or would she just get 3%?)

What can an agent do for us that, say, a real estate lawyer could not? I'm assuming a lawyer would be cheaper because she'd get paid by the hour, so reviewing/drafting whatever documents are needed and...I'm not sure what else.

Thanks for any input. This is absolutely nothing against real estate agents. I don't want to screw this up, but I also don't want to pay extra if we don't have to, just like I understand when new clients come to me and want to save money if possible. I don't take it personally!

so your husband, with no prior experience on home buying, wants to spend $1.3M on a house and do it without any representation, letting the seller's agent pocket the entire 6% commission. that does not sound smart to me. but I am sure ther seller's agent will be thrilled.

never heard of FSBO at that price point, and I would be really very weary

I would ask the seller's agent to discount the 6% off the price

You could ask, but it's entirely up to them what to do with the request.

OP, the seller is contractually obligated to pay commission to the agent, all of it, 5 or 6%, or whatever it is. The seller's agent shares the commission with the buyer agent, IF THERE IS ONE. There is nothing - nothing at all - you or your husband can do to change the contractual relationship between the seller and the agent, to which you are not a party. You can ask the seller's agent to rebate 3% to you, but there's nothing at all you can do to make the agent do that. If you are buying a desirable house in a desirable neighborhood, you can rest assured that there will be other buyers in line just like you, but with their buyer's agents. Your DH doesn't understand the dynamics of the seller/agent relationship.

[Anonymous]

Anonymous wrote:Thanks, PPs, especially 7:34 and 7:36 for your specifics. I should have said that I know the seller pays the commission but we assumed that the amount is factored into the sale price, so it effectively gets passed on to the buyer?

Looking forward to hearing more about what agents do for buyers.

yes, the price is obviously factored into the sale price, but at the end the sale price depends on the market, the seller cannot inflate the sale price to gets the net money he/she wants after the expenses, or nobody will buy the house.

the seller normally has an exclusive agreement with the seller's agent under which the seller will give 6% (or 5% or whatever they agree on) to the seller's agent, percentage that will be split with the buyer's agent if the buyer has an agent. so if you show up without an agent, the seller is not going to lower the sale price, since the seller normally is still obligated to pay the entire commission to the seller's agent.

thus, especially for an inexperienced buyer, going without an agent does not make any sense, you do not save anything, the seller's agent gets the entire commission and you still pay the same price you would pay if you had an agent. the market for SFH in good areas of DC, MD and VA has been very tight in the past year or so, with homes selling the day they go on the maket and with multiple offers. in a situation like that, without an agent you do not go very far. if you need to wait for the open house to be able to see a house (without an agent, how do you get in?), sometimes it is going to be too late.

going without an agent can make sense in some cases, like if you are a very experienced home buyers, you know the market, and find a seller who wants to sell without an agent, then you can both save if you agree to split the amount of the commission. but in your situation, and especially at your price point, it really does not make sense.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Wow! I wish I had your real estate agent! I've gone around with several and they're horrible. They spend more time making me sign commision papers than showing me the houses. I've also never had one suggest another house or show me houses that I didn't find myself.

A question to the group - do most buyer agents have you sign an exclusion clause/contract for their services??

Our agent was excellent and he never made us sign anything. He didn't have to - he was very good at his job and after a few visits with him we were exclusive with him without signing. I feel like the good agents don't need to have you, as a buyer, sign something.

In general, yes. Regardless of whether a broker is good or not, they do offer a service, and, can charge for it. If such contracts didn't exist, a seller would use a broker, list the house for sale, and then fire the broker AFTER the buyer was found, but before deal is finished. Then they both save the total commission. It is a litigeous world we live in - shocked he didn't make you sign something.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Wow! I wish I had your real estate agent! I've gone around with several and they're horrible. They spend more time making me sign commision papers than showing me the houses. I've also never had one suggest another house or show me houses that I didn't find myself.

A question to the group - do most buyer agents have you sign an exclusion clause/contract for their services??

Our agent was excellent and he never made us sign anything. He didn't have to - he was very good at his job and after a few visits with him we were exclusive with him without signing. I feel like the good agents don't need to have you, as a buyer, sign something.

In general, yes. Regardless of whether a broker is good or not, they do offer a service, and, can charge for it. If such contracts didn't exist, a seller would use a broker, list the house for sale, and then fire the broker AFTER the buyer was found, but before deal is finished. Then they both save the total commission. It is a litigeous world we live in - shocked he didn't make you sign something.

I think that poster was talking about a buyer's agent, not a seller's agent. sellers always sign a contract, for the reasons you indicate. for buyers, it may be less common. I looked for 6 months before buying and did not sign anything for the first couple I tink.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Wow! I wish I had your real estate agent! I've gone around with several and they're horrible. They spend more time making me sign commision papers than showing me the houses. I've also never had one suggest another house or show me houses that I didn't find myself.

A question to the group - do most buyer agents have you sign an exclusion clause/contract for their services??

Our agent was excellent and he never made us sign anything. He didn't have to - he was very good at his job and after a few visits with him we were exclusive with him without signing. I feel like the good agents don't need to have you, as a buyer, sign something.

Agent here. I like the advice you have gotten. You've also posted this question before and received similar answers, so I'm not sure why you guys are still hung up on this. If you want to go it alone - do it. But you'll realize what all the PP's and what I said in another thread is true. It won't benefit you and could seriously hurt you. Besides, why would you pay for a RE Atty out of your pocket?

As far as signing something, unfortunately we don't get paid until the settlement table. We have to have a lot of faith in a buyer who we run around with that they won't just go "oops, I went into an open house without you and signed a contract with the agent holding the open house." This happens ALL THE TIME because people just don't realize or they are that inconsiderate that they don't care that they are wasting someone's time, gas, money to run them around like a concierge, all for free.

We are told by the Real Estate Commission that we need to have buyer's sign this as soon as it is possible, however, I get that you would want to know my style and how responsive I am so I give people a few meetings. If I have zero qualms about you as a buyer, if you're a friend or a referral from someone who used me and I know you're not going to screw me over, I won't make you sign and commit to me too. But if you aren't? Or you are doing stupid crap like going to seller's directly and trying to cut a deal without the agents (happened to me last week as a matter of fact) then I'll make you sign.

If someone balks at signing after I've busted my butt for them, then they get put in line after my clients who are serious and who have committed to me too. This is not a one way street. We're not just here for people to use abuse and discard. We provide a service and essentially work on contingency. And for any lawyer who is about to complain at what I wrote - how would you feel if you took a case and didn't get a retainer because it was a contingency case, and then you find out your "clients" were also working with several other attorneys and went to court with one of them instead and won a huge case and the lawyer got 40% after you did a ton of work and offered a ton of advice too?

[Anonymous]

You don't. We bought 2 houses in very competitive local markets (mulit-bid situations 2004 and 2009) and did not use one. We did our homework.

[Anonymous]

My desirable property in a sought after neighborhood just sold after listing for 3 days. There was an open house, but my agent had already lined up multiple offers BEFORE the open house. We selected from the multiple offers immediately after the open house. I actually questioned the point of the open house and my agent said it was for the seriously interested parties to have one final look. And honestly it was probably good publicity for her, which is fine with me too.

Long way of saying, without an agent I don't think you're even going to get in the door to see the best places. By the time the open house occurs, it's already over.

[Anonymous]

Anonymous wrote:

Anonymous wrote:A question to the group - do most buyer agents have you sign an exclusion clause/contract for their services??

Our agent was excellent and he never made us sign anything. He didn't have to - he was very good at his job and after a few visits with him we were exclusive with him without signing. I feel like the good agents don't need to have you, as a buyer, sign something.

Agent here. I like the advice you have gotten. You've also posted this question before and received similar answers, so I'm not sure why you guys are still hung up on this. If you want to go it alone - do it. But you'll realize what all the PP's and what I said in another thread is true. It won't benefit you and could seriously hurt you. Besides, why would you pay for a RE Atty out of your pocket?

As far as signing something, unfortunately we don't get paid until the settlement table. We have to have a lot of faith in a buyer who we run around with that they won't just go "oops, I went into an open house without you and signed a contract with the agent holding the open house." This happens ALL THE TIME because people just don't realize or they are that inconsiderate that they don't care that they are wasting someone's time, gas, money to run them around like a concierge, all for free.

We are told by the Real Estate Commission that we need to have buyer's sign this as soon as it is possible, however, I get that you would want to know my style and how responsive I am so I give people a few meetings. If I have zero qualms about you as a buyer, if you're a friend or a referral from someone who used me and I know you're not going to screw me over, I won't make you sign and commit to me too. But if you aren't? Or you are doing stupid crap like going to seller's directly and trying to cut a deal without the agents (happened to me last week as a matter of fact) then I'll make you sign.

If someone balks at signing after I've busted my butt for them, then they get put in line after my clients who are serious and who have committed to me too. This is not a one way street. We're not just here for people to use abuse and discard. We provide a service and essentially work on contingency. And for any lawyer who is about to complain at what I wrote - how would you feel if you took a case and didn't get a retainer because it was a contingency case, and then you find out your "clients" were also working with several other attorneys and went to court with one of them instead and won a huge case and the lawyer got 40% after you did a ton of work and offered a ton of advice too?

9:32 here - sounds like you thought I was the OP, who I am not, or someone who has asked my question before, who I am not, and sounds like you have been burned by buyers and I'm sorry about that. I was simply asking the question based on a PP's response. For the record our agent didn't know us from Adam and we did not do any of the things you mentioned. Obviously, some buyers do and each agent must decide their willingness to risk certain buyers' actions.

[Anonymous]

Agents are exceptionally useless and poorly regulated, and you can certainly get the selling agent to return some of the fee if the alternative is not making the sale. (If you had an agent, the seller's agent would get only 3%, so it is massively in the selling agent's interest to give you 2% back then to sell to a buyer with an agent).

With that being said, you're a first time homebuyer buying at a high price point. I would consider at least using redrin, or using a normal realtor and squeezing him or her on the commission.

[Anonymous]

Anonymous wrote:yes, the price is obviously factored into the sale price, but at the end the sale price depends on the market, the seller cannot inflate the sale price to gets the net money he/she wants after the expenses, or nobody will buy the house.

the seller normally has an exclusive agreement with the seller's agent under which the seller will give 6% (or 5% or whatever they agree on) to the seller's agent, percentage that will be split with the buyer's agent if the buyer has an agent. so if you show up without an agent, the seller is not going to lower the sale price, since the seller normally is still obligated to pay the entire commission to the seller's agent.

thus, especially for an inexperienced buyer, going without an agent does not make any sense, you do not save anything, the seller's agent gets the entire commission and you still pay the same price you would pay if you had an agent. the market for SFH in good areas of DC, MD and VA has been very tight in the past year or so, with homes selling the day they go on the maket and with multiple offers. in a situation like that, without an agent you do not go very far. if you need to wait for the open house to be able to see a house (without an agent, how do you get in?), sometimes it is going to be too late.

going without an agent can make sense in some cases, like if you are a very experienced home buyers, you know the market, and find a seller who wants to sell without an agent, then you can both save if you agree to split the amount of the commission. but in your situation, and especially at your price point, it really does not make sense.

The exclusiviety agreement is just a scare tactic to frighten home buyers away from negotiating down the commission. If the unrepresented buyer has the highest offer price, it is strongly in both the seller and the buyer's interest to negotiate down or force a return of a portion of the commission, and after they make that demand, it is in the seller's agent's interest to give some ground.

With that being said, I agree that real estate agents have implemented a wide range of techniques to make it extraordinarily difficult for people to go unrepresented. Indeed, Redfin still can't legally operate in multiple states since realtors got state legislatures to adopt scammy regulations requiring no return of comission or a minimum commission. Meanwhile, realtors will refuse to show houses to unrepresented buyers, make it difficult for you to see homes, etc. So OP is probably best off hiring a realtor and then trying to squeeze some commission versus attempting to fight through a crappy system.

[Anonymous]

Anonymous wrote:Agents are exceptionally useless and poorly regulated, and you can certainly get the selling agent to return some of the fee if the alternative is not making the sale. (If you had an agent, the seller's agent would get only 3%, so it is massively in the selling agent's interest to give you 2% back then to sell to a buyer with an agent).

With that being said, you're a first time homebuyer buying at a high price point. I would consider at least using redrin, or using a normal realtor and squeezing him or her on the commission.

This is idiotic advice. As a buyer you have no say in the seller's commission, although it would be fun to see the seller's agent laugh at the suggestion.

That said, using redfine or asking a buyers agent to rebate some of their commission is fine. But with all things, you get what you pay for, so you may end up paying more for a home in order to "save" $1,000 or less on a commission.