Buyer's Agent - Atlanta, GA: When negotiating on behalf of my buyer-clients, I delve into certain data to assess how a particular home builder is negotiating with other buyers. When I'm armed with this data, it's merely a starting point to get a better deal for my buyer. By extrapolating the details of a new home transaction, there is potentially thousands to be saved.
Generally speaking, home builders protect realtor commissions for the sake of encouraging cooperation with Realtors; these professionals are a key part of providing exposure to theses builders’ new homes. Hence, a buyer would not save in this area.
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However, if a builder agreed to give a special discount because a home buyer opted not to be represented, one must ask an important question: Is the builder trying to save the buyer money or himself? Would a good buyer’s agent expose something adverse that an unsuspecting buyer would simply be unaware of?
The pros of using a true buyer's agent for a new home purchase are innumerable; notice that I said true buyer's agent. I am a speaking about someone who is versed on new home and new construction matters.
While I agree that you don’t need an incompetent agent to buy a new home, I would, however, disagree that you don’t need a qualified buyer’s agent to maximize one’s purchase.
A home buyer can research the new home buying process to a great extent and still miss out on many beneficial opportunities to maximize the purchase. I have seen this happen.
Lastly, FSBO's are generally trying to save themselves money, not the buyer; many are over-priced too.
Cohosh: I have always owned a house. Unfortunately, I sold in California just as I moved out of state, temporarily houseless in a very bad sellers market.
I had plenty of cash, but over a period of a FEW days I read about the housing bubble in Fall 98! It was so bad in early 1998 after watching Realtors DO NOTHING, I sold my house myself over one weekend to my next door neighbor for the asking price. It took about 5 minutes.
Of course the "do nothing" Realtor got his 6% and walked. Now I had, and have, cash and want to buy, but junk houses are selling for more than a nice house. So I have been saving and watching.
I learned a new lesson. You CAN save more money than you can make playing the "move-up" housing game. The reason is that so many middlemen from Brokers to loan companies try to put their hands in your wallet.
I have learned MORE about Real estate being a renter for the past 9 years, then buying and selling four houses the "move up" American way.
Here is the issue: Realtors ONLY GET PAID, when the deal closes. No close, no money. To put food on the table, they will do or say anything for their number one client--THEMSELVES.
Forget about the NAR and code of "ethics". Read THEIR NAR contract: "NOT RESPONSIBLE FOR ORAL STATEMENTS" of either agent.
In other words lying is "ethical". If the NAR is "ethical", REMOVE this disclaimer!
Today my issue is: How can I, a cash buyer (because I saved and rented instead of paying it to Realtors and loan companies), find an HONEST agent to represent me?
Two events occur over and over:
1) If the deal is "good", the listing agent buys it for themselves---again PROVING who their client really is.
I watch the local MLS EACH DAY and call immediately when I see what I want. I am the "loan company" --- I don't need "permission" to buy a house. But the listing agents hide their listings (pocket listings) until the seller is weary and gives up.
The Realtor then buys it themselves supposedly to "help" the seller, or they have a family member or straw buyer involved. Look at the steep discount a Realtor gets on THEIR OWN DEAL. Plus, blabbering sellers will have probably disclosed all the bad and ugly facts about the property that almost always exist.
2) The "Buyers" agent ONLY wants to represent prospects who can qualify to close or stupid enough to pay asking list price---OR ABOVE. In my area, Realtors have a new twist on an old scam.
They will try to get sellers to list at a "lower" price (its already overpriced) to stimulate a pretend "bidding war" where they participate through shill "offers".
I see this ALL THE TIME. Shill "buyers" (secretly working for the agents) will make low ball offers to break down the seller and/or they will make high ball offers that have poisonous AND impossible contingencies in them that will kill the deal.
Of course on the surface it will look like a "legitimate offer", until you read all the "subject to's".
The seller is ONLY looking at the dollar amount at first glance.
A cash buyer is extremely sensitive to PRICE, more than any other buyer. Its their money. All money brought to the table is their money. It is NOT OPM - Other Peoples Money.
So the Escrow "closing party" of hungry vultures is paid for 100% by the buyer, and the buyer knows the second the ink is dry, that the house will have dropped a few thousand more. don't believe it?
Ask a Realtor present at the "party" to tell you how much the house is worth NOW. They will offer an opinion of a lower amount even though they were sitting their divving up YOUR MONEY for their shenanigans.
Goal: Show me ONE Buyers agent who will Represent ONLY ME! I have not found one. If I chisel down the price---they buy it. EVERY TIME.
The MLS is filled with OVERPRICED JUNK. If they are NOT junk and priced correctly, Realtors grab them up.
THE MOST IMPORTANT FACTS for the buyer of ANY PROPERTY:
Why is the seller selling? ---what is the REAL reason?
If its the '5 D's of Realtors': Death, Destitution, Divorce, Disease, Disaster, than the seller must sell. ie THEY ARE TRULY MOTIVATED SELLERS. But only if they have REAL equity....not Realtor hype and dreams. Look only at the ink on the paper. If you don't see it--its not there.
I am looking for a house that was purchased BEFORE the fall of 1998, and has not been refinanced, Heloc'd or have liens on it. But as soon as the Realtor (sharks-or snakes) see these--they grab them up or hide them for "investor" friends.
These houses WILL have equity if the house has not been destroyed. If the seller is a "5D" seller, they will be happy to close the deal with cash. FAST !! I don't mind paying the sharks their commission- IF I GET A DEAL.
Okay "honest buyers agents" ---Here I am. To give you "your 3-6%". But where are you? Buying up the non-junk houses for yourselves.
Honest Realtor: Are they out there? Sure, and so are money hungry Auto Mechanics, Carpet Cleaners, Plumbers, Roofers, CPA's, Attorneys, Doctors, etc. And, as the saying goes- a few bad apples spoil the whole bunch.
Look people, if you can do it yourself, no matter if it's your taxes, plumbing, selling your home, etc-- GO FOR WHAT YOU KNOW! As a Realtor, I do.
I do my own plumbing because I am comfortable with it, but I won't do my own taxes. I hate paying my CPA in excess of $1500 to do them, however- why bash him because he is trained in his field?
It's his profession. This is what he does. Sure, I can buy some PC program, and do it my self, but why would I want to risk it? Taxes are not my thing! I don't have a desire to learn them, either.
Another thing I hate paying $500-600 for a brake job on my car, and I bet my mechanic wishes he kept it all- but after paying all his overhead- he will in fact, keep very little.
Same goes for Realtors. Now, not withstanding the bad apples- we have to split it with the brokerage, pay errors and omissions insurance, our MLS fees, NAR fees, Local Board Fees, Desk Fees, our own Advertising, car expenses, etc. YES- even Realtors under the umbrella of a brokerage, pay to be in their profession. Did I mention paying for continuing education?
Bottom Line- I'm sick and tired of the general public thinking we make all kinds of money, no doubt- from them! We are like any other business; money is made through volume sales. So, yeah your Realtor drives a 'Power Car'. Bet he also works his a$# off for it, too!
Now- as for pricing a home, as a Sellers Broker- again, notwithstanding the 'bad apples'. Most Realtors simply run the numbers in the area, and suggest to the sellers an asking price.
It is up to the seller to instruct the Realtor on what to ask. But, here is where the double edged sword come's in for us- that your typical consumer has no idea of- If you as a seller, want an amount that is way too high, or exceeds the condition or location of the home- then why in the world would we, as Realtors, want to spend our time, and our money- trying to market a home like this?
It's not the consumers money being spent on marketing, it's ours. Then, if we suggest a lower price- we then have no idea how great 'their house' is, and we just want a quick sale! You know what- sell it yourself, then, if you know so much! (not to mention if it's overpriced, no one will look at it, and of course, it'll be the Realtors fault)
EXAMPLE- your brother is leaving the state, and asks you to sell his 1989 Chevy, 175,000 miles, faded paint. He says- 'It's a really reliable car, and whatever you sell it for over $2000, you can keep'.
However, you being familiar with car values in your area, know the car is only worth $1500, tops. You with me? Why in the world would you bother to - run ads in the local newspapers with your money, take time to put in on the internet, run it to the corner intersection with a for sale sign in the window, etc. Hmmm??? Well???
Funny story- (well, I think it's funny, and pat myself on the back for it, everyday) I had a seller wanting to sell, tell me 'If you can get me $300K for my place, after your fees and other costs, I'd list with you today.'
So- I said sure, but I needed $1500 non refundable marketing money up front, credited back at closing. Needless to say- I did not get the listing. By the way, the market comps came in at $260K- $270K.
A few days later- it was on the market- for $339K!!! Wow- they found a sucker agent! Well, long story short, it's been 279 days on the market now, they are on their 3rd Realtor, and it's now listed for $289K. (of course reducing the price with each re-list) They are getting closer. But, what did I know? I just 'wanted to low ball it' for a quick sale! Yeah, right!
Oh- my other favorite- acting as a Buyers Broker- is the buyers that claim we want them to pay full price- so we Realtors can make more. Here's another double edged sword.
No matter if it's a buyers or sellers market- if a buyer really expresses- I love this house- have to have it, what should I offer? Well, if we suggest full price, (after running comps, of course and confirming it is within marker value for what/where it is) - well then, it's because we are greedy.
BUT, if we suggest a lower price, and truly another offer comes in higher- and they don't get it- now we're dirt'!!!
Well, which is it, MR/MRS Consumer? Do you want our help or not?
Remember- if you know so much, go do it yourself. If you know all about what an FHA/VA appraiser will look for, or all about Lead Based Paint disclosures and the possible fines involked by the EPA- and understand the inspections and subject to's', and all your other options- THEN GO FOR WHAT YOU KNOW!
But, don't bash us for making a living in a field that we, as Realtors, train for. We walk a fine line at being sued at the drop of a dime.
Besides, the difference between a $300K sale and a $290K sale, as a buyer broker being paid 3%, is only $300!! And that's BEFORE splitting the 3% with the brokerage!!
For me, after my split, it would mean a whole extra $255! Now, and of course, most all the savvy Realtors like me, know this. If I can get my buyer a true deal, meaning they are willing to play hardball, and won't cry if they don't get the house, I know they will refer me to many friends, which in turn equates to tens of thousands of potential dollars in future commissions, rather than making an extra $255 now!
In conclusion, I'm tired of being bashed by ignorant consumers, and I do, in fact, sleep at night- because I truly am looking out for my buyers! Usually, most all of my past client become friends of mine. So, I think there are about as many Realtors that suck, as there are consumers that suck!!
Guest: I would never work with someone like yourself as your buyers' agent. You would be a red flag right off the bat. In most markets, the buyers' agent doesn't make more than 3% (we don't even make that, it is usually less than half after our expenses, taxes, cut to our broker, gas, and the thousands in fees, insurance, locks useage, etc. to even be a realtor).
Also, in most markets, a good buyers' agent and reasonable seller will allow for the seller to pay 3% of your closing costs anyway. Wanting that in writing is weird to me, and in 5 years I have never heard of such a thing. It would usually happen anyway.
And hiring a real estate lawyer is sort of needless unless it is a very unique property, in an instance of just buying a home. This is because the title company is your lawyer, and you are already paying for that anyway. It is a waste of money.
Be careful filling out forms yourself. We are carefully trained to know how to word contracts, while we are not attorneys of course.
I have taken many classes on it and had many situations where I had to be creative and consult with experts on wording contracts to truly and properly represent my client.
While it isn't rocket science, it isn't something most people would know how to do properly if you haven't written and closed 100 homes with all different situations. I once wrote a contract with 25 contingencies, all very carefully worded out, and it wasn't even a commercial deal!
Most homes only require 3-10, but there are some instances where you need to be covered on all things that you may not even think of! You would be surprised. While the media says the market is so down, our area is not down in the price range I most normally work with and they are still selling for full price if fairly priced, and within 30-60 days or less!
So, I am not desperate and lots of my realtor friends are not. We would never be desperate enough to work with someone like yourself who thinks you know more than us and is unappreciative of our help that actually protects you down the road! I hope you wise up and get over your poor attitude.
Looks like maybe you have been burned before and are generalizing and putting us all into one category.
We won't be extinct in five years. My clients are very thankful for what I do for them. I don't just write up a contract and get paid. It is a lot of responsibility, time limits, and making sure everything is done correctly for months usually. I save my clients LOTS of time and money!
Our job isn't as easy as you may think. You don't see behind the scenes all that we actually do for you.
I spend sometimes hours each day for EACH client for months at a time, working until midnight sometimes, or on Sundays. I have even missed going out of town on planned getaways because my clients need me. I feel it is my responsibility to protect and serve my clients the best i can.
I hope you stop spreading bad things about us realtors and realize that we are very needed.
Guest: I am a realtor and have seen a lot of folks get burned by not using a buyers' agent. Here in TN, most of the agencies will not allow DUAL AGENCY! We consider it very unethical here in the friendly south. So, the problem this guy has with dual agency is void here.
There are many reasons why you need a buyers' agent. Being unrepresented is like using the same divorce attorney as your spouse! The other agent here in TN is bound by law to represent the seller ONLY.
While they will hold your hand, be sweet, do a lot for you, etc. they are not representing you, but ARE representing the seller. They will be extra nice because they will make double the money because they don't have to split it with a buyers' agent. The ethical thing to do is for that realtor to still fully explain to you that you have the option by law to be appointed a buyers' agent. Reasons you should use a buyers' agent:
1. If experienced, they know what is good for resale (believe me, it isn't just common myths and things you THINK are good for resale, or things you learn on HGTV!). There are quirky things you will not know to look out for that we have experience seeing that make homes hard to sell later!
2. Easements, encroachments, fencelines, powerlines, growth and chances of something being built by you like a stinky papermill, garbage dump, carlot, or many weird things like this need to be researched and looked out for (no guarantees things won't change in the future, but at least have them looked at and evaluated).
3. HOA transfer fees and HOA problems with insurance, etc. (THIS is a big one that many realtors don't even research, but I do look heavily into all aspects on the WHAT-IFS b/c they are so important.
Other agents call me paranoid, but I am just extra careful in making sure my buyers do not run into something bad later if I can help it. Plus, they may call me later to help sell it and I need to be able to sell it!
3. Appreciation rates. This takes me hours to figure and while no one has a crystal ball, we can show you the trends for that area, type of house, or neighborhood so that you can plan for how long you think you may stay in that home.
4. Are you paying a fair price? A good buyers' agent that truly cares will thoroughly research the TRUE comps, not just zillow or other online sites that pull any old house nearby.
A true comp has to have many comparisons to the subject property and it is a square foot exact pricing, not just that this house sold for this and the other for that. That is in no way a way of determining value.
My CMA's are very, VERY detailed and compare features, lot size, how many stories, materials used, year built, square footage, style, if there is a bedroom downstairs, fence, pool, patio, porch, and SO many more factors to consider. The condition of the home is one also.
5. A good realtor with a good contact list can refer you to reputable people that can make sure you are covered such as the title agency, loan officer, inspector, etc. If you use your own loan officer, that is fine, but a lot of times the realtor sends a lot of business to a good one that will make you priority for him/her.
Your agent can make sure that you are not being charged junk fees and know how to read those confusing Good Faith Estimates better. This is SO important. Most people look at the rate only and this can be a huge mistake! Someone with a 5.5% rate vs. someone with a 6% rate can be deceiving if you don't know how to read it.
As an experienced agent, I would use a buyers' agent in another state that I am unfamiliar with. The main reason for this is that the agents have the real deal access to comps and values. I would interview agents until I felt that one was as honest as I could find that truly cared to help me out.
I do this for many of my clients, friends, and family around the country-interview agents to find them the right one. I just did it for my parents who bought their retirement home in KY and they had a great experience!
Get a buyers' agent! Have an agent you trust interview agents for you in another state too. We agents know what to look for. There are some great agents out there, but it is just a matter of finding them.
Some states are not big on buyers' agents, like TX for instance. I helped a seller I had here find a buyers' agent there, and I am convinced it was the only true buyers' agent that ethically performs for a buyer in that area. They like to sell their own listings there. I work either as a buyers' agent or a listing agent.
It depends on if I am working with a buyer or seller. If I am already working for a seller, I will appoint a buyers' agent to the buyer if they want. If they don't want, that is great because I make double, but usually when they understand they have the right to one, they want one. That is the right thing to do!
Hope this helps protect someone in the future from making costly or stressful mistakes! Oh, and also, ALWAYS get a professional home inspection, ESPECIALLY on new builds or spec homes!!! These usually turn out with the worst results!
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