Q: I have had a Realtor show me about a dozen houses (no contract). She actually hasn?t done much for finding me homes ? I find them and she just sets up the appointments. I finally found one that I really liked and wanted to put an offer in on, but she went on holidays and by the time she got back there was an accepted offer on it. I have now found a FSBO that I want to look at and she has offered to handle the purchase for me (if I buy it). I know that it will technically be the seller that will pay her commission. However, my question is this: Am I not actually the one that will end up paying it in the long run anyway? The house is priced at $300,000 (already below market value according to my Realtor). Assume the seller has in his mind that he wants to get at least $290,000 for the house in the end. On my own, I could therefore negotiate down to $290,000, saving myself $10,000 on the purchase. However, if the seller knows he is going to have to pay my agent $9,000 (3%), in order to still get the amount he wants he can?t really drop the price. After paying the Realtor, that only leaves $1,000 to move on. Because it is already below market value it is highly unlikely that my realtor will be able to get him to move much on it anyway, so in order for him to still get what he wants AND pay a Realtor, there is little chance of a price drop for me. So, in this scenario, I maybe get $1,000 off with a Realtor instead of $10,000 off on my own. Therefore, even though the seller is technically paying me buying agent, the money the seller is using is money that would have been in my pocket if I didn?t have an agent. Even the FSBO sites I have looked at say that even if an agent shows up with a buyer, agree to pay their commission because you just adjust your final sale price accordingly to make sure the buyer actually covers the cost. Any feedback? I like my agent and I don?t want to cut her out of the deal, but if I am ultimately going to be the one paying almost $9000 to her, I will look at the house without her. She already lost me one house and hasn?t been the easiest to get to show me listings, so as nice as she is I don?t really feel her services, even with doing up the paperwork, is worth $9000 to me.
?Anonymous, Minot, ND
A: It is legal for you to buy a home without the services of a real estate agent. There is no law that states you must use one.
You are also correct that you would likely end up indirectly paying the buyer?s agent commission. Home prices are usually higher when using agents to account for the commissions paid.
What you (or the seller) are paying for are professional services. You pay for a pro to guide you and help you avoid mistakes in the transaction, aside from just marketing it and doing the contract.
This is really a judgement call on your part. The history books are riddled with stories of people who lost their shirts in real estate deals that they haphazardly bought. Not that this would happen to you, but? Also, who is to say that your current agent is not much more competent then yourself at this, after all they take a short 2 week course and are off helping others with the biggest investments of their lives.
You must use wisdom in purchasing a home. Look back at the last few years and see the countless folks who have lost all the money they put into their homes because of errors they made (short sales, foreclosures, real estate bubble, etc). Errors made with the help of agents, banks, government and themselves.
I recommend to you to do your due diligence and find the absolutely best agent you can find to represent you. Do not pick the agent that happens to be the first one that becomes available or by happenstance was there when you needed one. Start by interviewing at least 8 agents for the job of representing you. Make sure they have at least 5 years of experience doing real estate full-time (this is hard to verify but there are ways).
Do not be swayed by a list of certificates. Most are just worth the cost of the certificate. Be cautious of giggly/smiley agents who offer not much else. After interviewing several agents, you will get a sense of who is a professional and who is just selling ?snake oil?. Once you find that agent, they will be worth the $9000 (what it will really costs you is $42/month or $504/year so that in 17+ years you have paid for the $9000 worth of services).
Adam Aguilar is a Realtor? with Reliantra in West Toluca Lake, CA.
A: You may be able to get away from using an agent ? but should you. If you think an agent earns their commission by finding a buyer a house you are mistaken. That is a TINY part of the value they provide.
Whether or not you should use a particular agent is a different question and being ?nice? is not a skill that justifies a commission ? although it may be more pleasant if the agent is ?nice?.
To find a buyer?s agent that for sure will be an advocate without potential dual agent conflicts go to: http://www.naeba.org .
Paul Howard is a Realtor? in Cherry Hill, NJ.
A: As an Exclusive Buyer agent, it would pain me greatly to think that there was no ?added value? to a client for my services. Programming a computer to forward listings, or searching websites and /or driving by neighborhoods looking for signs is not really ?finding a home?. This is the easy part. Our job is to help a client understand what they are ?viewing?, determine value and weigh options between various properties, research data,negotiate and monitor contractual obligations, coordinate and oversee the financial/mortgage process,inspections, advice, hand holding, crisis management, accompany to closing and more. All this said, if you do not have a signed agreement that addresses assistance with FSBO sellers ( and you should have an agreement anyway!) then go yourself, do your due diligence and maybe everything will go smoothly. Maybe not! in the end, not having a good Realtor may cost you money.
Sheree Landerman is a Realtor? with The Buyer?s Representative LLC in Farmington, CT.
A: It?s a common misconception that a person selling a home on their own can ?SAVE? the commission by not hiring a REALTOR, however, we know through hard statistics that FSBO homes sell for 12% MORE than homes listed by a REALTOR. That being said, in your situation having the REALTOR negotiate for you will help you to get the home for a price lower than what the owner would take if you did not use the REALTOR. The REALTOR can pull comparable sales that show the true Fair Market Value for the home and the REALTOR can show the FSBO owner these facts and actually use them to get you the home for a price that is well below the price you can negotiate by ?Cutting Out? the REALTOR commission. This information is not readily available to you as a consumer and for this service alone I would have the REALTOR negotiate for you. The thing is, you have to make sure you are using an agent that knows how to negotiate properly so have a conversation with this agent first and see what their strategy is to get the home for a price below what the owner thinks they can get for it. If the agent doesn?t make you feel that they are going to save you money, don?t use them but interview other agents to find one that understands how to negotiate a FSBO properly for you. in the end, YOU will save money and the owner will get a fair price for their home.
Lou Sansevero is a Realtor? with Atchley International Realty in Lakewood Ranch, FL.
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Related posts:
- Will My Buyer?s Agent Get A Commission If I Find A FSBO House?
- We?ve Been Working With A Realtor But Found A FSBO Property, What Now?
- Is An Exclusive Agency Agreement Effective In FSBO Situations?
- I Have A Buyer?s Agent, Can I Buy A FSBO House Without Paying Broker?s Fees To My Agent?
- Should I Use A Realtor To Buy A For Sale By Owner Home?
Source: http://www.realtor.com/blogs/2012/07/11/should-i-pay-my-realtor-to-help-me-with-a-fsbo/
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