AJ,

I have seen this done several times. You first have to come to agreement with your agent of course. Then you write an offer with a lower price and a lower fee for your agent. Some agents offer discount rate, some offer flat fee. For example: Let's say the fair market price for the house is 700k, a full service agent is entitled to 3%, that is 21k. Your discount agent agree to just write an offer for you for 1% fee, that's 7k, you just write an offer of 686k and 7k fee for your side of the agent. It is the same offer to the seller and you save 14k. Done. But you have to understand what kind of service you are getting for the discount rate and if you are comfortable with it.

Valorie - No, I don't want a direct contract with the buyer agent. What I want is clearly stated in my original question and nothing has changed.

I got sidetracked into this conversation because when I posted this question, I was told "don't be clever here and negotiate for a fee that it is "FREE" to you" - so there is $0 cost to you for the buyer agent services.

Does the seller pay my buying agent?.... Yes, yes, yes... and I will say it one more time... YES!... I understand that very clearly and I am not trying to change any sales model or contract.

But, that cost is burdened by the BUYER who is financing this transaction, so it is NOT FREE to me.

And, that's what I was trying to show through my examples - that the fact that current model states the seller hands over the money to my buyer agent for his services provided to me does not mean it is free to me (the buyer).

Dear Nina,

It was no intention from me to diminish your profession and again I want point back to my original question that started this whole discussion.

I may be over-simplifying it, but as I see it, my agent will do two jobs for me: 1) Sell me a house and 2) Processing the sale.

Some replied here that “finding the home for our clients is the easy part” and I am not sure I agree with this statement. I would say that it is actually quite the contrary. I know that if I had hired an agent to help me with the house search, I would have been a royal pain to deal with. My gosh, this is a lot of work! And for an agent, you need to be dedicated to your clients, understand their needs, be super patient with the mood changes, diligently search in the listings for something appropriate, drive them around town in the hope they will like it, spend on gas and food, and even act as a counselor for them. And this can drag for months and months! This is where you earn your money! I would NOT describe this as “easy” in any shape or form.

The second part, once the buyer has agreed on the house, I would imagine you follow industry standard procedures (which can tedious and difficult) to get the sale closed – and as I understand, it takes between 3-5 weeks. And I am not saying that this is “easy”, but it is definitely not 100% or 80% of your total work.

So, this is where my original question came from. I don’t need an agent to sell me a house and drive me around town and put up with me while I decide which one I want to buy (step #1). I only need someone to help with the process of closing the sale (step #2)

Therefore, is it fair for me to ask for a RE professional to help with step #2 and not expect to pay for step#1?

Not sure if this is a demeaning question… so apologies if it is.

Hi Lori – thanks for your understanding of my original question. As you described, all I need is a RE agent to help me with the “ministerial acts”. I am not trying to do it myself, I can’t do it myself, and I don’t want it for free. I just want to someone to help me with the offer and closing and ask how much it would be for those “ministerial acts”.

Despite the tone this forum had gotten at times, I have to say that I have gotten some marvelous advice from some of the posters here. You RE agents don’t have an easy job and I sympathize with you on the level of engagement you need to provide. For example, Nina Daruwalla, she seems to me like a fine example of RE agent who understands, counsels her agents and is patient through the process of house searching. And you know what, Nina – you deserve every 3% of what you earn and more!

But, that’s not what I am looking for - all of the house searching process has been completed and it has been identified and now I just need to help on the “ministerial acts”…. So again, is it fair for me to ask for a separate fee just for that?

What did I decide to do? Well, the house that I am interested as of today is still in the market (it’s been over 2 months now), so I will HIRE a RE agent to help me. Some agents have offered me to contact them and I might do that. Others have suggested going to Redfin and I might do that. Thanks to Trulia and the posters here… looks like I have some options :-)))))

If the buyers agent took no commission, the seller still owes the listing agent the full 6 % or what ever their agreement was! The seller contract is with the listing agent, not with the buyers agent.

AJ - you are far too clever for me.

If it comforts you to believe that the buyer pays the commission, then you go ahead and believe it. There are holes in your argument large enough, through which I could drive a Hummer, (the big one, not one of the recent downsized models)... but you've clearly made up your mind and are entrenched. Enjoy your high ground.

I defer to your superior knowledge of real estate and the commission structure.

Alan - I want to add another falacy in your statement.

"Because the seller pays the commission. An unpaid commission has no bearing on the buyer."

The buyer already paid the commission in the sales price, so it DOES HAVE A BEARING ON THE BUYER. What the seller decides later to do with it (whether it chooses to pay you or not) is irrelevant, because the buyer has already been fully impacted in the sales price.

Alan - you just re-enforced my point again.

In order to avoid you getting "stiffed" from the seller, let's agree that I (the buyer) will pay you 3% directly for the transaction (we can write a fully legal contract if you wish).

This way when we make the offer, we ask for a 3% discount from the seller, indicating that he won't need to give you that 3% from the selling price. To the seller, the NET price remains the same.

The deal gets closed, you still get your 3% for selling the house and I stil pay the same NET price for the transaction (97% of the house price + 3% for your fee).

You see, you just proved the BUYER pays for the selling agent fee - whether it is directly or through the seller.

Oh come on...Thibaud is more than just a realtor basher... He is a definer...

He gave us three examples of real estate deals he did without a broker. In two he clearly came out ahead money wise over the counter part. Each case was defined by him as a win-win!! My definition of a win win is where both sides come out equal, but now I see I'm supposed to come out ahead in order to make it a true win win.
His point goes to support my earlier post that without realtors there will be more mispricing in the market. It would not be a win win. In that post I said lawyers and property flippers as well as insurance firms stand to make money without realtors. I also said that I think I can make more money that way, but would never describe it as a win win.

PS JR good luck on the listing appointment today!! If you need any backup, my cronies and I can come rough your potential client up a little :) That always seems to work at my presentations. I also bring a box full of trade secrets and magic numbers you can only get if you list with me. Don't feel bad about the spelling errors, I see them all over my posts too and just about everbody else that posts. Maybe Trulia can get a spellcheck built in and something that allows for more icons etc. That could be fun!

There is no conflict.

Trulia is a real estate based website and Trulia Voices (according to Trulia) is a place for you to ask questions about real estate and share what you know with locals, agents, brokers and experts.

Most people, when coming to ask questions about real estate, are looking for answers from those who deal with real estate for a living. That would be Realtors, real estate agents, lenders, appraiser, inspectors and developers.

Admittedly, some of those who answer questions here on Trulia Voices can be a bit overzealous. But I give the general public a little more credit, apparently, than you do, in being able to discern the difference between a quality professional, and someone hawking snake-oil.

There's a clear conflict between Trulia's desire to provide its users with INDEPENDENT, UNBIASED information and the realtors' financial interest in steering people toward high-priced, full-service brokers, regardless of whether that's the best value for the consumer. It's as if http://www.slashdot.com, the programmers' website, were filled with Microsoft trolls steering the participants relentlessly toward paid MS software software support.

Most of the answers on these threads posted by realtors
~~~~~~~~~~~~~~~~~~~

Oh I'm sure this forum would improve if only trolls like yourself, million$producer, #1 closer and the like were giving advice. No need for folks who actually SELL houses and live real estate every day to give advice, let’s just do what you say, right?

Thibaud, thanks for your 2007 link, which I have seen already, obviously. The reason there aren't more discount brokerages is not because there is some kind of cartel or boycott by realtors, but because discount brokers do not offer full service to homeowners. Discount listings are very difficult to show and are usually overpriced. The owner is usually present, which is a kiss of death, show wise. The reason things have stayed as they are is because this system that works. You have already ground your ax all over Trulia. If you want to sell a house, no agent is holding a gun to your head. If you want to buy a house, no seller is going to feel sorry for you and discount the price. FSBOs do not discount their selling price because you're a nice guy and they don't have a realtor to pay. The reason they are FSBO is because they want to NET more money! I know it's dissappointing to not be able to afford a house you'd like to buy. It's disppointing for sellers to not be able to net what they would like also. By focusing on us, you are looking in the wrong place to take out your angst.

Aj:Seller pays for my agent, but that money is coming from me! So, no, it is NOT FREE to me!

JR: Well, the seller may also use the money you give him to buy his house to pay for his car. Does that mean you paid for his car? They may use the money to pay for their child’s education. Does that mean you paid for it?

Aj" The house that I am looking at is $700K, which means my agent will get $21K.

JR: Not after the agent splits it with his agency and pays his taxes. He will probably get less than 10K.


Aj: Remember, I indicated that I have already done the house hunting part, decided on the exact house, and also gotten my own lender. So, the only help I need is to draft an offer letter and with the closing.

JR: assuming that the deal goes thru. You could negotiate back and forth 3 weeks and not get the house. Then you start again at square 1.


Aj: I make about in an entire month about a third of what my agent would earn in this transaction. And I am working EXCLUSIVELY for my boss from 8-6 every day.

JR: You make 21K a month? WOW! I’d rather have your job. As I said though, your agent will get less than 10K IF the deal goes thru. And that may be the only house he sells that month.

Sorry, AJ - once again, you've misunderstood, and misconstrued my statement.

There is no personal attack, in fact no attack at all in my statement. Simply a recognition that you've already made up your mind on this issue, and that it's a waste of everyone's time (myself included) in attempting to convince you of my point of view.

Yes, I called you clever and entrenched. I don't see how those are attacks. You, on the other hand, have called my statements false, which is just another word for a "lie", while your compatriot accuses me of "playing with words" and "smoke and mirrors". So, Sorry AJ, but the attacks have come from your side.

I believe the seller pays the commission. Plain and simple, no smoke, no mirror, no playing with words, You believe that the buyer pays the commission, and it's become evident to me that arguing with you is a case of "banging my head against the wall". So I choose to stop.

No ad hominem attack, your method of twisting my words, and throwing them back at me IS very clever, and you are firmly entrenched in your position (despite your statements to the contrary). I have not called you a "dumb fool" as you suggest, in fact all of my comments are there, to prove it.. I have treated you (and Thibaud) and everyone else on this thread, politely and respectfully.

Was I a little sarcastic in my last comment... sure... but disrespectful or attacking... absolutely not. And this is yet another case of "clever", in your attempt to turn my "raising my hands" in surrender, into an attack on you.

I'm done.

Alan – If I am so “clever”, how come I am failing to see those “arguments large enough through which you could drive a Hummer” and as you further added “the big one, not one of the recent downsized model”… please tell me, I am listening, what are they?... if they are THAT obvious, how come I don't see them?

Unless you provide more than just personal attacks to make a point, I will assume that I am too dumb for you and that YOU ARE THE ONE who has “made your mind and entrenched” and YOU ARE THE ONE who feels like you are on a high ground and that we house buyers are just dumb fools to you.

Unlike you, I welcome your comments and I am willing to listen to your arguments. I have not resorted to any personal attacks in any of my comments and I went directly at your arguments, not at you personally. So, tell me, enlighten me please… I am just a first time buyer trying to navigate through the process.

Valorie – I am not trying to change any contract or legal agreement between any of the parties. I was just making a point that the buyer agent is not "free" to the buyer (which is what I am being told over and over by the RE Pros here).

By showing that whether the commission is passed to the buyer agent through the seller or whether the buyer pays directly the buyer agent – the result is the same to all parties involved. The seller, the seller agent, the buyer, and the buyer agent all come out equally in both scenarios in terms of what they are getting. The order of the factors does not alter the end result.

Thus, the current system of the seller “paying” the buyer agent is actually a hidden way of the buyer paying directly the buyer agent.

Okay... so let's try this scenario:

The buyer pays $100,000 for a home.

The seller owes the bank $120,000 plus a commission of 6% ($6,000)
so the seller brings $26,000 to the closing to pay off the bank and the Realtor

now... who paid the commission?

-----------------------------------------------------------------------------------------------------

It is still the BUYER… Alan is just playing with words…. Let me explain.

When the buyer pays $100,000 for a home, the seller does NOT get $100,000. Seller gets only 94% or $94,000 (minus 6% for commission).

Seller does NOT fund the commission separately from the money he receives from the buyer.

So, what Alan needs to say is – “The buyer pays $100K for the house. The seller gets $94K and the realtor $6K. The seller brings $20K to the closing to pay off the bank”.

The order of the factors does not alter the result.

...the commission for the buyer's agent is embedded in the sales price paid by the buyer. It's passed through.
~~~~~~
Okay... so let's try this scenario:

The buyer pays $100,000 for a home.

The seller owes the bank $120,000 plus a commission of 6% ($6,000)
so the seller brings $26,000 to the closing to pay off the bank and the Realtor

now... who paid the commission?

From JR below we see still more sarcasm and ad hominems, along with his usual spelling and grammatical mistakes. I answer a Trulia member's questions with facts and logic; he responds with insults, one-off anecdotes about fried chicken eaters, and assertions without any supporting evidence.
~~~~~~~~~~~~~~

Wrong on all counts. I'm a girl, I didn't say anything about fried chicken eaters, and I don't make spelling and grammatical mistakes, although I do sometimes hit a wrong key or transpose letters unintentionally. Get your posters straight .

Thib, I have a listing presentation I have to prepare for today, so I don’t have much time to respond to your inflammatory comments, but here goes:

Thib: JR provides yet more sarcasm and badly written non-arguments. Not sure how this benefits the consumers he supposedly aims to serve, but I'll address his points again here:

JR: My post answered YOUR post, which was not of any benefit to consumers. Unfortunately on Trulia we have to answer trolls who are here imply to inflame in addition to answering legitimate questions

Thib: "The reason there aren't more discount brokerages is not because there is some kind of cartel or boycott by realtors, but because discount brokers do not offer full service to homeowners."

Again, the Department of Justice has established the existence of this cartel and is winning case after case. That they haven't yet knocked it down nationwide is due partly to federal budget constraints for our regulatory and enforcement activity.

JR: Case after case? No, Thib, you are the one who is wrong.

Thib: "Discount listings are very difficult to show"

Why so? What aspect of the showing process is made more difficult? Are you actually speaking about the _marketing_ hurdles imposed by the realtors' listing practices? Again, those are barriers to competition that, if not illegal, should be illegal.


JR: for the thousant time on Trulia and elsewhere: The homeowner is the one who is the contact, they do not always answer calls promptly, they hover like vultures, they talk TOO MUCH, they overprice their houses, frequently if they are not the contact, the person who sets up the appointment doesn’t know the correct status of the house.

Thib: "[Discount listings] are usually overpriced."

Again, if the sales data are current, comprehensive and made available to everyone-- as is the case in the financial markets and, via Kelly, in the used-car market, it's not difficult to price a home properly. Trulia could do this easily if the cartel were forced to share its MLS data in real time and in a compatible data format.

JR: No it isn’t difficult, you’d think they’d price it right wouldn’t you? Homeowners have too much involved emotionally, and they have not been INSIDE homes that sold recently in their area. I have. I know that the finished basement in one home is gorgeous, while theirs consists of an old rug with an exercise machine on it. Get off the cartel sh t, Thib. It’s getting old.

Thib: "The owner is usually present, which is a kiss of death, show wise."

Again, easily corrected by social media technologies that share the wisdom of the many. One Trulia thread, linked to on the Trulia homepage in a list of Best Practices for Homesellers of somesuch, would be enough to nip this in the bud for 99.9% of homesellers.

JR: Again, you’d think wouldn’t you? Unfortunately “no one knows my house better than me and I’m going to point out the kitchen drawers” is more the rule.


Thib: "The reason things have stayed as they are is because this system that works."

Again, this is a system that exists solely because of the political power of the NAR, not because of its efficiency. A vastly more efficient system would feature tiered pricing tied to packages of discrete services such as showing, negotiating, closing, etc. That system, according to every economic analysis that's been done by independent economists, would save US homebuyers and sellers tens of billions of dollars annually.

JR: That’s right. I’ll be sure to bring my uzzi along to my listing presentation this afternoon, so that I can hold it to the homeowner’s head so they sign the papers.

Continued from previous post:

Thib quoting JR: "You have already ground your ax all over Trulia."

No I haven't. I've responded to Aj, the Trulian who sought independent, unbiased advice about paying a flat fee for closing services. You're the one who's insulting people and trying to steer Aj toward a higher-priced service he neither wants nor needs.

JR: Yes you have, you just don’t like that everyone’s advise isn’t the same as yours.


Thib: "If you want to sell a house, no agent is holding a gun to your head."

Cute.

"If you want to buy a house, no seller is going to feel sorry for you and discount the price. FSBOs do not discount their selling price because you're a nice guy and they don't have a realtor to pay."

Nice non sequitur.

JR: Sorry you have a problem with those statements. Not sure why is “cute” or “non sequitur” about facts.
Thib: "The reason they are FSBO is because they want to NET more money! I know it's dissappointing to not be able to afford a house you'd like to buy. It's disppointing for sellers to not be able to net what they would like also."

You really ought to educate yourself about how markets work. They thrive on INFORMATION. The more information available to buyers and sellers, the more efficient the market. When the MLS is open to all, without fear or favor, we will have more efficient pricing. Again, we all know who's standing in the way of this necessary, long past due reform.

JR: Talk about NON SEQUITURS! I’m thrilled about the amount of information buyers and sellers can get today. I love it that buyers are able to see what homes sold for and are able to eliminate many homes from consideration based on the web. I love it that no longer am I the only one who knows your next door neighbor sold for 50,000 less than you think you’re going to get. No longer am I the only one who knows what the market is doing. There is a lot of information out there, unfortunately many areas do not have the dire valuation situation as in FL, AZ, NE and CA, but uneducated members of the public believe it is so.

JR - That’s assuming your offer IS accepted and we don’t have to start at square 1 again with another offer. (Didn’t I say that already?) Not all offers come to an acceptance, even after weeks of negotiating between parties.

AJ - Ok, in that case, you have done no work on the closing activities (which you have described as the hard "behind the scene" part). Same thing as if I go a car dealer, I tell you which car I like, you make me an offer and I don't like it. I just go back to looking for a new house by myself and then we try again.

This just re-inforces my previous point... that if the RE agent helped me house hunting, after a failed offer, then we would start this entire process again and then you would have to put up with me for another few months possibly of new house searching. Again, I am taking care of the long, tedious part by myself.

Glen, just report "Carman". That poster is simply another incarnation of our latest troll.

JR - Well, the seller may also use the money you give him to buy his house to pay for his car. Does that mean you paid for his car? They may use the money to pay for their child’s education. Does that mean you paid for it?
AJ - Of course I am! If I am not paying for your car or child education, I will be paying for your mortgage, your trip to France or something else. As a matter of fact, as I understand you split your fee 50/50 with your company, so it sounds like your company is not paying you, but rather your clients. If you didn't get paid a percentage per deal, but instead a fixed salary per month regardless of the amount of deals you close, then yes I say that maybe I don't directly pay for your car/education.

JR: You make 21K a month? WOW! I’d rather have your job.
AJ: I said "a third" of $21K per month... and yes you are welcome to try an 8 to 6 job five days a week for my salary.

JR: Not after the agent splits it with his agency and pays his taxes. He will probably get less than 10K.
AJ: You make it sound like I don't pay taxes. You can figure out by yourself how much take home I have.

Wow, what a question has turned this board into! I guess there is no such thing as a simple question or a simple answer.

I think this best summarizes the situation - Seller pays for my agent, but that money is coming from me! So, no, it is NOT FREE to me!

About this statement - "Even though we get paid by the sellers, we work for you! How cool is that?"... doesn't this pose a conflict of interest?... how could be working for me and being paid by the person I am trying to negotiate with work?... bottom line, you are working for me because you are going to get paid from me.. that's the reality and let's make that crystal clear.. and if it is not understandable to my agent, then he/she should not working for me.

Now back to my original question - whichever agent I hire to help BUY the house will get 3%. The house that I am looking at is $700K, which means my agent will get $21K. Is this a fair fee for the services I am will be getting and can I get a better fee?

Remember, I indicated that I have already done the house hunting part, decided on the exact house, and also gotten my own lender. So, the only help I need is to draft an offer letter and with the closing.

Listen, I make about in an entire month about a third of what my agent would earn in this transaction. And I am working EXCLUSIVELY for my boss from 8-6 every day.

Will the work this agent put EXCLUSIVELY on me to purchase that house take the same amount of work I put in an entire month? I might not know how much work an offer letter and closing requires, but it just seems to a beginner (which I admit I am)... well, simply put... excessive.

Real estate agents' fees are much lower outside the US, in both % terms and of course absolute terms-- which simply reflects the degree to which the NAR's lobbying operation has captured American legislators.
~~~~~~~~~~~~~~

Thibaud, I have no idea what the details are in the countries you cite. 1% in Scotland? Is that with no split with the agency? For one side? Both sides split? Do you even have to be LICENSED? I don’t believe in the UK you do. It may make you feel good to spit out these out of context percentages. If you object to agents in the US making 4, 5, 6, or 7 percent. . . by all means, DON’T USE AN AGENT! Sell it on your own. Who’s stopping you?

CJ, I thought you were one of better bloggers around here but you proved me wrong.
>>Whatever the cost of selling a home, it does not get added to the what the market will pay
that flies in the face of most basic common sense.
~~~~~~~~~~~~~~

Then I can only assume you would be willing to pay more for a home in order to reimburse the seller for the amount they are paying their Realtor?

I dont think you understood my post. I'm all for commissions going away. I think I can make more money that way! I love helping people, but if they don't want my help I can help myself. It would also be to your advantage to stop using the 6% figure in your arguements. National average is about 5% maybe lower. Its like yelling wolf a year after the wolf came and ate all the sheep. All sellers in Calif sign a disclosure that commissions are negotiable, so no one is forcing anyone to sign anything. Data from our local mls goes out to realtor.com, remac.com, zillow, trulia, on and on, so I'm not sure which cartel is blocking that. you can get info anywhere you look on the internet. (BTW as an interesting side note I created the internet and all that free info, not Al Gore) In California they are working on software that every mls will be connected too, and members from one will get access to all the others. Not all have the same technology but they are workin on it and charging realtors fee to make it work in an effort to get more information out. All you have to do is post here on this site and 50 realtors will gladly send over any listing/ pricing info you need. I do it. I have nothing to hide from anyone. No cartel or Mafia boss has ever knowcked on my door and told me to stop giving out info, because it doesn't exist. Keep in mind the articles you read don't report everything involved in the process. Do doctors make too much? a local medical clinic just filed for bankruptcy. Any time I was there the office was overflowing. What happened? A lot of behind the scenes expenses for one. lawyer/legal fees, insurance, raising rents, people not paying their bills. Did I feel like I was overcharged when I visited? Probably, but it doesn't look like it worked out for them, I probably paid too little. Now that they are gone people are up in arms and want them back. Realtors have the same types of misc items you never hear reported about. I have an active buyer couple now who I have spent probably minimum 180 hours of work, written multiple offers on short sale properties with no luck. They might never get a property or could decide to walk at any moment or never buy. Does that happen? You bet. Who pays me for that time in your equation? What if through bad luck this happens to me with multiple clients. You're right, I'm sitting on the beach with the rest of the doctors from that office wondering what went wrong. Not only did I lose time I lost in the form of cash outflow, gas wear and tear on my car, monthly fees to brokerage, mls, errors and ommissions, showing up late for dinner with the family. It was free money, it was easy, it was like stealing candy from a child. Absolutely wrong!!! Which is why I would once again invite anyone into the process. start another discount firm and go to work with your pricing formula. There is no cartel, or person that is going to try and stop you. It is a free market. Maybe I'm blind and thats only how my California market is, but California is a pretty big market. If I had to guess a large percentage of the people that stand behind your thoughts are lawyers, or property flippers. Those are the ones who stand to make the most if realtors go under. Or maybe you are in insurance and want to sell everyone an errors and ommission insurance policy. Can't leave that one out of the equation, but every article I see does. I do thank you for sharing your thoughts and I believe everyone has a right to their opinion, political party what have you. I guess I'm trying to say I'm not trying to force my beliefs on anyone. what happens happens. If you are correct then realtors will go out of business in which case maybe there will be dancing in the streets or like the doctors who went under people may get upset and scream we want them back? I will continue to help people that want my help and happily cheer anyone on that wants to do it differently. Thanks, Glen

interesting article, but not exactly sure it proves anything. Stock brokers became financial consultants, they are still there, doing the same thing they did before. Just changed the name around and threw in some mutual funds. I hear they've added a lot of value over the last couple years. If commissions go away, I'll still be there and the name will probably really be "shark" then, because my role will be buying mispriced properties and re selling for a profit. I'm pretty sure I can make more money doing that then I can chasing commissions so in some ways its an exciting thought. I can help people or if they dont want my help I can exploit it. When I type it out, it actually sounds a little evil, but its what the people want right?? the other thing that will of course happen is lawsuits. so you aren't actually saving anything but feeding the lawyers. "the other sharks." I'm still sticking to supply and demand theory. Nobody is pointing a gun at anyone. Do what you want if its legal. If there isn't a profit there then go somewhere else. If you don't like someones service then don't shop there. There are countless discount brokers... I would actually like to see some statistics on what those guys make and how many of them stay in business over 5 years. Not the owners of the companies, but the agents working under them. I also find it interesting that people trust values on sites like trulia and zillow etc. They will give ranges that can be $100k wide or vary 450k or more in a tract home subdivision. do they have cameras looking inside peoples windows?? As a broker I can narrow that range down considerablly ...which with my upcoming job as a "pricing specialist" is indeed a skill I look forward to using.

HaHa, I think we've found the humor channel. No real estate agent or group can control or monopolize some set fee. Those of you who keep throwing out a magical 6% number clearly show you don't have an understanding of the market at all. National average is closer to 5% which is split up many ways. There are plenty of discounters out there. If they had the perfect business model they would completly wipe out full service brokers. Why haven't they? Supply and demand. There is a demand for full service agents. If you don't want to use them then don't, but there is no need to bash them just because you had a bad experience once. As in any business there are plenty of bad agents. Not too hard to do when for example one in 53 people in california have a real estate license. I guess that also means one in 53 californians are multi millionaires. Seeing that the average real estate salary is some where around $50,000 I'm not sure how they did it, but it must have been easy. So my advice to those who think the work is easy or next to nothing...is stop complaining, grab yourself a real estate license and join the free loaders. In case you forgot we(the free loader / rats / greedy people) are the ones whose phones go off 7 days a week from 7:am to 11: pm, put countless miles on our cars, help people through good times and bad times, become a part of our clients lives for awhile, and don't seem to have time to bash other occupations.

Glen

Hi AJ,

FYI - I have to disagree with an idea represented here - Short sales are not "1/3 more time". They are usually nightmares for buyers and they can last "merely a few extra weeks" but usually are 3-6 months. Most agents are not experienced in these (they've maybe taken a class and maybe done a handful). But ... they'll "claim to handle them".

Really - this is your first home - please just buy a normal re-sale from a distressed seller and get a good deal.

In addition to the comments below, writing an offer might sound really easy, but it isnt. there is a lot of competition out there right now. Especially houses on the lower price range. I submitted an offer in San Jose this weekend. There were only 30 other offers!!! I'm doing a lot of work submitting multiple offers with only the chance of getting one deal complete. Honestly in todays market you should be giving a good agent a tip not asking for a discount.

Glen

Amazing!!!! Scott you sound just like a few other profiles I know of, funny... So your from North Carolina huh? How would you know if I was spamming for weeks? You sound like someone I've been calling out that has been using multiple profiles to post fake spam posts in these forums. Your "Trolling" word sounds pretty familiar too? I see your making realtor bashing posts at neck breaking paces. I like the one "banks and realtors are to blame for the global meltdown" being your entire post and having nothing to do with the persons question being asked. I also noticed since creating your profile a few hours ago you have commented on about 20 posts I've made in New Jersey???? Following me much? I have no question that your profile is fake!

It's funny you say I've been spamming for weeks, how would you know if I was or not? Have you been following me around online? Perhaps you have using one of your other profile names?

I just noticed your using a profile created in 2007 and not used since sept 2008 until now but claiming I'm a Troll for NAR? What!!!

I think I'll reach out to Trulia and report all your fake spamming profiles and others I suspect to be. I'll ask them to compare the I.P. address' which are making the posts and maybe they'll give you the boot and hopefully ban your i.p. address altogether.

No problem Aj, but you never answered a few questions pertaining to your question.
How have you been getting in to see these houses?
Surely your not buying a home after only seeing them via diligent online viewing?
Are you using a realtor to get in to see the inside of these listed properties? If not how are you getting detailed property info or for that matter getting to see the inside of these homes?
Are you only visiting the ones with open houses? ;-D

Glen, I guess I did not get your point from your post, so before I answer it incorrectly, I offer you to please state in a sentence what you are trying to get to.

If your point is that it might not always be 6%, but could be a lesser number and there could fluctuations, then yes, I agree with that. However, whatever that number might be, the impact is still burdened by the buyer.

But if your point is that the buyer pays is not impacted at all by the costs of agent services, then I don’t agree with that.

MY POINT – it is FLAWED to think that SELLER will get that 6% (or whatever negotiated rate) even if no agents are present. An informed buyer is well aware of the selling agreement and the payout structure because he is the one who is ultimately FUNDING the transaction. As such, under different circumstances he will be able to negotiate or leverage for better pricing. And as I said already, the SELLER themselves will be more flexible in price negotiations when brokers are not involved.


In the meantime… here are my answers to the points as I understood from you.

GLEN – “Yes they typically do think that way and yes they typically price their homes too high.”
AJ – Not sure how this is an issue. So, as I buyer won’t buy from the seller and that house won’t sell and price will drop until it becomes attractive.

GLEN – “Sellers want to get as much money as they can which is a major reason they hire agents. “
AJ - Exactly my point, when sellers hire agents to help them obtain a higher selling price, that higher price which will include the commission costs is passed on to the buyer.

GLEN - “Without further details are we to assume these are the FSBOs?”
AJ – I don’t see how this is relevant. If it is a FSBO, sellers are more flexible to accepting a lower price with buyer . If the deal is worked through agents, they will have to take those commission costs under consideration when considering final price.

GLEN – “Take a $500k condo that had a 4% commission which in theory according to the argument form the (agents cost us more side) saves each side 1% or $5000 dollars. Total of $10,000. When comparing two similar homes that sold in a recent time frame you just don’t see this savings. Where did it go??”
AJ – Two points on this:
1) Unless we know what the actual commission agreed for each of these houses, we could go in circles discussing how the final price was determined. Why is not reasonable for me to argue that the reason that you see similar prices is because they all had similar commission percentages?
2) OK, let’s go to the other extreme. What if there were NO agents involved in this deal and it was a FSBO. The seller themselves are already stating that they would sell it for a lower price than comparables. Therefore, agent services add to the price which is then passed on to buyers.

Lori - thank you very much! I will keep your advice close to heart during my agent search and definition!

Jonathan - I know that you joined the forum late (and I don't expect you to read through all 150 posts here), but your point was addressed in much earlier posts by myself, buyers, and RE agents. Instead, of repeating ourselves, I invite you to read through the posts if you would like to.

Hi Aj,

If you prefer to hire an agent to peform only the ministerial acts, then that is what you should do. Keep in mind that having a buyers agent (in my totally biased opinion:) is worth it but you have a plan for your purchase and you may very well end up having a very successful transaction and walk away with everything you want.

When hiring an agent to write everything up for you (or whatever you do) be sure to obtain from them, in writing, what exactly the service, fiduciary responsibility and duties they have. If you already know what you want to do, you could simply have an attorney write it up for you. If you hire an agent to simply facilitate the sale and not represent you, you need to know if the agent is actually acting then as an agent for the seller. It's easy to get into a contract, just not that easy to get out of one should you need to and if the agent is not acting on your behalf, he/she may not be helpful in that sense. So many what ifs. Do you expect the agent to disclose any recently closed sales that you may not be aware of that may impact your offer? Do you need the agent to follow your time lines and trigger dates to ensure that you don't miss a deadline that will cause you to be in default?

Also, is the agent you hire going to only get paid if the deal closes or are you going to pay the person for the service not matter what the outcome? Is the house you are looking at listed and is there already a commision offered to the buyer's agent? If so, you may as well hire someone to fully represent you. Bottom line is, there are people to help you and you can find the assistance that you want. Just be sure that you understand what you are getting. Use this forum to find out all the benefits of having a buyer agency agreement, decide which benefits are important to you , and make sure that you know that you are getting those benefits with the person you hire. Good luck, and let us know what happens.

This way when we make the offer, we ask for a 3% discount from the seller, indicating that he won't need to give you that 3% from the selling price. To the seller, the NET price remains the same.
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My MLS rules state that commission are not to be negotiated in an offer. My own rules are “the negotiations are between the buyer and seller. The seller and I already negotiated my fee.”

Nice parsing.... but let's take your languge

So, what Alan needs to say is – “The buyer pays $100K for the house. The seller gets $94K and the realtor $6K. The seller brings $20K to the closing to pay off the bank”.

and say it correctly:
"The Buyer pays $100,000. The Seller then pays $6,000 from that $100,000 and pays his Realtor. He then brings $20,000 to closing."

Yes, the money originally came from the buyer, but once it reached the seller's hands... it was the seller's choice as to what to do with it. In fact, he could choose to file a lawsuit against his Realtor, and end up not paying the 6% at all (if he won).

Or he could opt to "stiff" his Realtor and not pay him at all, and risk being sued. Do you suppose he'll rebate that 6% to the buyer?... no, of course not. Why...?

Because the seller pays the commission. An unpaid commission has no bearing on the buyer.

Me: Silly JR, please re-read my advice below about the importance of not being greedy.
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How many buyers are you working with, Thibaud. None, I'd guess? They're already feeling pretty bad that their equity is flying out the window, they're trying to get us to take a reduced commission, and they certainly aren't feeling magnanimous towards you. You have a perfect fantasy world going there, agents work for peanuts, sellers list their houses at reasonable prices and aren't greedy. You probably don't think buyers expect granite in every house too.

Okay... so let's try this scenario:

The buyer pays $100,000 for a home.

The seller owes the bank $120,000 plus a commission of 6% ($6,000)
so the seller brings $26,000 to the closing to pay off the bank and the Realtor

now... who paid the commission?
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that’s just too logical, Alan. ☺

If the commission were a flat fee totaling say, $2,000, the seller could drop the price to $98,000,
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Yes he COULD. But I'll bet he WOULDN'T! Why should he? He could put an extra two grand in his own pocket.

PS we have given AJ plenty of advice in terms of if he doesn't want full service he should contact a discounter. It's not our fault if we aren't discounters. Redfin was named for one. A couple agents gave out their contact info, so maybe they wanted to offer a discount. Maybe the discounters save money by not buying computers so they can't access this post???

It seems Michael J Kelly is the intelligent one among us, he realized that Thibaud is simply against all Realtors and nothing more needed to be said. We can clearly see that from Thibaud's first post. Although he writes lengthy posts he is nothing more than a Realtor basher.

Thibaud is a "Master" at baiting us all.

Man! Do you folks go off on a tangent! AJ, Why don't you just get an attorney and right the offer up. Have the attorney send it to the agent. IBut in these times I'm sure you'll find any number of agents willing to write up your offer. I don't know what price point you seek but in our area in certain price points you'll be paying WAY OVER list price or just keep getting beat out!
I don't do "fee for service" but it is NOT a new concept. Good luck! And next time Trulians, remember, the consumer is monitoring this web site and your infighting denigrates our industry. Don't be sucked in by the "baiters" !! They are "masters" at it!! Let them do their thing someplace else!

I don't "dislike realtors." I dislike cartels and their anticompetitive practices designed to force consumers to throw away money.

It's especially annoying when simple, widely-available information technologies abnd platforms are manipulated and distorted by the cartel so as to maintain a 100 year-old anachronism that extracts many tens of billions of dollars in needless fees from consumers each year. All of the games played by the realtor cartel involve denying consumers and service providers access to information. The real estate market has lagged far behind other sectors in its use of powerful web technologies and platforms that slash transaction costs, increase efficiencies, and save people huge sums.

These are several of the ways that our information-based economy creates greater wealth for everyone. THe realtors' cartel is not creating or adding to the nation's wealth; it's merely _shifting_ wealth from the many (consumers) to the few (the realtors).

I believe that, in an era of scarcity and scandal, we need to move forward, and bring to an end the corrupt practices that tarnish American business and that make millions of Americans poorer. Ending the realtors' cartel is a good place to start. Flat-fee brokerage is the best way to achieve this.

Good luck to AJ and everyone else seeking to bring costs in line with real value provided.

too busy working today to catch up... just curious on the hoarding info part... what you think about other companies and the info they hold onto???
Should we release military info to all....
Should drug companies like Genetech release their info...
Should Wendys release their secret formula to everyone...
These are things they have worked for. As boring as it may be realtors have paid to collect data and keep it stored and accessible for review. It in turn has been released to internet companies and web sites. Much of this info can be collected for free at county buildings and unlike the above companies it isn't secret info. It's free info that realtors take the time to collect. So you can collect it yourself, use free internet sites, pay a realtor to help you out, or even kindly ask a realtor for the info and they give it to you.
So I am pretty sure no one thinks a company or business should turn over their work, but for some reason realtors should???? because if that is the industry you want to work in you should have to put out money not earn it? great business model there.

JR - please read the documents I've linked to. Below is a link to still more documents, links, examples and worksheets from the Department of Justice that clearly describe the benefits of finally bringing real competition to the real estate brokerage industry:

http://www.usdoj.gov/atr/public/real_estate/index.htm

Why does this matter? Because the realtors' cartel is costing Americans $80 billion-- yes, BILLION-- per year. If fee-for-service were the norm, this sum extracted from American consumers' pockets would quickly fall by more than half, saving Americans over $40 billion annually-- a staggering sum.

You can also read this DOJ press release from May 27, 2008, announcing the settlement between DOJ and the realtors (note that this, alas, is not the end of the road, as the realtors are likely to seek to use their stranglehold on state legislatures to try to get around these reforms):

http://www.usdoj.gov/atr/public/press_releases/2008/233605.htm

Finally, there's more detailed info on how the cartel tries to $crew discount brokers, contained in this horror story from 2005 as reported in the attached Wall Street Journal article.

Again, the goal is to ensure free access to the widest possible set of timely and accurate market information, about houses sold and houses for sale.

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Thibaud, on the one hand you say that any guy on the street can do all the work a realtor does, on the other hand you seem to think we hold some information secret. Where, may I ask, did you get this huge ax you are grinding? Why do you had real estate agents so much?

Aj: The second part, once the buyer has agreed on the house, I would imagine you follow industry standard procedures (which can tedious and difficult) to get the sale closed – and as I understand, it takes between 3-5 weeks. And I am not saying that this is “easy”, but it is definitely not 100% or 80% of your total work.

JR: That’s assuming your offer IS accepted and we don’t have to start at square 1 again with another offer. (Didn’t I say that already?) Not all offers come to an acceptance, even after weeks of negotiating between parties.


Aj: So, this is where my original question came from. I don’t need an agent to sell me a house and drive me around town and put up with me while I decide which one I want to buy (step #1). I only need someone to help with the process of closing the sale (step #2)

Therefore, is it fair for me to ask for a RE professional to help with step #2 and not expect to pay for step#1?

JR: I found that even when I had to do more of a search for homes, the buyers did a lot of step 1 research on their own. Now, even when my buyers don’t do a lot of searching on line, they do occasionally, and sometimes come up with homes I have already discounted for them that they don’t like once they see them.