Why do we need a real estate agent?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

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Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The commission agreement is in the contract between the seller and the seller's agent. A seller is entirely within his or her right to say "After thinking about it, I'm not willing to sell this house through you unless you agree to reduce your commission from 5% to 3% so that I can accept this pending offer."

And, as the Economist Article nicely points out, this argument is circular. Agents tell sellers they'll build the commission into the cost of the house, and tell buyers they're not hurt by the commission. Its not possible that both are true.

You just contradicted yourself. The seller is not within his or her right to change the terms of a listing contract in this way. Not at all. In fact, if the agent brings a ready, willing and able buyer and the seller tried to do this and the buyer walked because of it, the seller would legally owe the agent a commission, whether or not the house has sold since the agent fulfilled the terms by bringing a ready, willing, and able buyer.

So, once there's a contract, a seller actually has no right at all to say "I'm not wiling to sell this house through you unless you agree to reduce your commission from 5% to 3%." That's what a contract IS.

The agent didn't bring a ready, willing, and able buyer if the buyer is willing only if the commission is cut and the agent is not willing to cut the commission. That's question-begging.

Not really. No buyer's going to write an offer based on the commission being cut. The buyer doesn't CARE because the buyer isn't a party to that agreement or contract. The buyer MIGHT offer 3% less than list or ask the seller for closing help, but the buyer doesn't add a clause to the offer saying "but i'll only buy the house if you renegotiate the commission you pay to your agent." Do you even understand how absurd that sounds?

As already outlined, the buyer would tell the seller directly that they'll offer x price and that the seller should make up the difference in the commission. Why would any of this be reflected in the offer papers?

Because a written offer is the only way you actually get a ratified contract?

How do you see this working exactly? A house is worth $100,000. You offer $95,000 and tell the buyer "if you want the other $5,000 tell your agent to forego her commission?"

That's absurd. Just offer the $95,000 and let seller decide whether or not to accept it. Bringing up the listing agent's commission is just absurd.

The other thing you could do is offer the $100,000 and ask for $2,500 in closing costs (which would be half the commission). But you don't say "and we'll call that half the commission".

This is not complicated. There would ultimately be a ratified contract. The buyer tells the seller "I am willing to offer you X-Y of your list price. Try and get the difference from a reduced commission." The seller than tells the agent "I want to get this under contract. Can you please reduce the commission by Y amount." The seller and the seller's agent both have incentives to reach a midpoint number in a commission reduction. Once they do, the seller or seller's agent tells the buyer, who submits an offer. It is accepted, and the transaction is completed as normal.

I have actually done this successfully, so I'm not particularly persuaded by your protest that it is absurd.

Where and when did you do this?

It is absurd.

[Anonymous]

Methinks the realtors doth protest too much.

[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!

I am a real estate agent and I encourage you to follow your husband's advice. Have a real estate lawyer prepare the documents for you. You can arrange with the listing agent to see any houses and then have the lawyer prepare the documents for you. The listing agent can negotiate the offer directly with you. You can arrange for the inspections, financing and settlement agent if you are not using the lawyer to handle the settlement. It is a fairly simple process to buy a house

And you'd be willing to provide the buyers with 50% of your commission if they do this, correct?

Why would they be entitled to any of my commission?