Reply to Why do we need a real estate agent?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]Besides, why would you pay for a RE Atty out of your pocket?[/quote]

Because real estate attorneys actually provide value and protection to a buyer that is roughly proportionate with the cost. Agents do not come close. 3% on 1.3 million is almost $40,000. Having someone search MLS so that you don't need to log into redfin and getting driven around in their SUV is not worth close to that much. The reason people are somewhat accepting of this fee is because they mistakenly think money is relative, not absolute, and that "if I'm spending $1.3 million on a house, what's another $39,000 on an agent?" That makes no sense, because from an economic perspective, overpaying by $39,000 on a house is exactly the same as overpaying for $39,000 on a can of diet coke. Either way, you're out the same amount of money.

Real estate agents [i]might[/i] be worth their keep if they significantly reduced the risk you faced in purchasing a property. But they don't. Real estate attorneys do a much better job of that at a fraction of the price (and, as a bonus, are bound by ethical rules that agents are not).

And agents might also earn their keep if having them around decreased your purchase price by 3%, but there's no evidence they do, nor do they even have the same incentive to negotiate as you do, because they actually [i]lose[/i] money if they get an additional reduction in the sale price. Their primary concern is making sure the sale happens at some price point, so they will always err on the side of telling you to be safe and accept an offer over pushing for additional concessions and losing the house.[/quote]

you are mistakenly assuming that by going without an agent a buyer would save the $39K of commission. but the reality is that by going without an agent, the buyer would still pay $1.3M on the house and the seller's agent would pocket the entire 6% or 5% commission. so the buyer would not save anything, and go unrepresented. what's the advantage?[/quote]

I would ask for a 3% discount off the price. Make sure you talk to the sellers directly. I had a seller's agent refuse to work with me and show the house  because of the rebate realtor I was using. Joke was on that old hag because I contacted the sellers directly and told them what was happening and they were pissed.[/quote]

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