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Marcy, Home Buyer in Santa Monica, CA

Proper Etiquette dealing with Real Estate Agent situation?

Asked by Marcy, Santa Monica, CA Sat Dec 13, 2008

I interacted with a RE agent [online only] for a few months until I found a home myself -- no listings were forwarded by the agent. I called the agent and asked for a tour of the specific property. Within a week, we met, toured the house together and made an offer. She prepared all the paperwork.

The offer was ~$100k less than asking but substantially more (~100k) than I budgeted. I can afford the payments with reserves and 20% down at my offer price. Sellers are submitting counteroffer. I can't responsibly offer much more than $3k-$5k more -- thought they'd like more.

Is it reasonable, under the circumstances, to ask my agent (and maybe the listing agent) to discount their commissions ~1% to help me and the sellers meet? Thanks.

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PS Interacting online counts. Email and texting have become the preferred mode of communication by many clients and we realtors have adapted. Personally, I spend more than 2 hours per day on email and another hour or so on other computer tasks. The reason you have realtors on Trulia to answer your questions is because we are building our web presence. It's a form of indirect advertising. Yes, I do enjoy reading the questions. Yes, it makes me feel good when we can help someone. I love my job! But this is work.
1 vote Thank Flag Link Sun Dec 14, 2008
On the one hand, I can see how you would like for the agents to accept less so that you can buy the house. And they may.

On the other hand, the agents are doing their jobs. Part of what the general public sometimes falls a little short of fully understanding is what agents actually do. In this country, over the last 25 years, we have developed one of the best systems in the world to connect people who are buying and selling real estate. Please allow me to explain a little bit more.

The Multiple Listing Services that exist now in most cities took huge amounts of time, money, and negotiating to develop into a service that makes it easier for buyers to become familiar with the available inventory. The planning and development of each MLS was spearheaded by an individual, or small group of people, with vision and determination. Cooperation was necessary to put the plan into action. It required the blessing of the local and state Boards of Realtors as well as input and agreements from each brokerage in each area. Computer programmers and attorneys were brought in to write the software and create the guidelines and procedures for using the new system. Implementing the MLS was truly a remarkable feat.

As time went on, the MLS evolved with updates and improvements beyond anyone's dreams. But we still must maintain it. Constantly. Every day. All agents who are members of Heartland MLS must keep the information current. And we must follow the guidelines and procedures that are set out for it's use. This includes keeping our licenses active, attending CEU's, keeping up with the changes in submission criteria, etc. All of this costs time and money.

But the MLS is not what sells houses. It is a tool for us to keep track of the status changes in properties on a daily basis. It is a communication tool. The listing agent worked with the seller to get the property on the market. That can take many, many hours. Once the listing agreement was signed, the agent began advertising with signs, print media, internet sites, the MLS, her company site, flyers, phone calls, emails, and word of mouth. All of these venues take time and money.

The buyer's agent, on the other hand, has additional responsibilities. These include, but are not limited to, working on their web presence, sending out print media, emailing potential buyers when indicated, maintaining the web site(s) that buyers use to search for properties, keeping in contact by whatever method the potential buyer chooses, holding houses open on Sundays, sending out mailings to attract clients, keeping in regular contact with past clients, friends and acquaintances who may someday want to buy or sell a home, etc.

In addition, realtors need to see 20 or more homes per week to keep up with the inventory. They also need to network with each other to keep up with what's not on the MLS. And they need to keep up with changes in real estate law, procedures, and guidelines on the national, state and local levels to insure that every contract they write is correct and complete. They also need to be aware of changes in mortgage lending practices of which there have been many this last year. They also need to be aware of any changes in insurance regulations and taxes that may affect their clients.

All of these actions make it easy for anyone to find a house, have the house shown to them, and write an offer to purchase. Without the diligent work behind the scenes, the networking, the constant maintenance of the MLS, the education, the attention to detail, a person would find the process of selecting and purchasing a home to be much more difficult than we have made it.

The fact that you were able to find a home online and see it in person at your convenience tells me that both the listing agent and your agent have been doing their job. If you and the sellers can come to terms then you can see what the inspections bring to light. Maybe you will get to closing.

Oh, another tool that we use to make showing houses easier is the Centralized Showing Service and the iBox. CSS is a monthly fee; iBox is annual. And we either pay a quarterly fee to rent a key to unlock the iBox or we pay an additional monthly fee to have the key software programmed into our smartphone so that we can show any house in Kansas City.

All of these services, together with the diligent work of realtors, has made it easy for consumers to buy and sell real estate in the USA. It's a process. Systems cost money & time to maintain. Networking takes time.
Web Reference: http://www.MariaTMorton.com
1 vote Thank Flag Link Sun Dec 14, 2008
Dear Marcy,
I would try to work with this agent as they did show you the house. Therefore they are the "procuring cause of the sale". You would not be buying the house if she had not taken you to see it in person. So she has technically earned the commission. I agree the real work starts once the offer is written, negoitiation, contract acceptance, property/structural/septic inspections, dealing with lenders, and working with title company and surveyors and repairmen etc. It is not an easy job, we earn every penny.
Betina
1 vote Thank Flag Link Sat Dec 13, 2008
Just remember once the contract is signed, That is usually when the work starts.
0 votes Thank Flag Link Sat Dec 13, 2008
Dear Marcy,
Talk to your agent, they may be willing to reduce commission, but they may not. Remember their Broker probably takes anywhere from10-50% of that commission and the tax man is in line behind the Broker. I agree with Daniel, see how long the home has been for sale, the longer on market the more reasonable or willing to negoitiate the sellers should be. Did the Realtor run the comparable market analysis for other recently sold homes that are similar to the subject property and in the same neighborhood? What did those homes sell for? You want to look at the price per square foot to determine if the price you are offering is reasonable. Make the Realtor earn the commission and help you find out if the counter offer is fair. If you need a good negoitator I know several good Cali Realtors and would be happy to put you in touch with them. I wish you the best of luck with your purchase!
Betina
0 votes Thank Flag Link Sat Dec 13, 2008
I would be willing and have done that to help close the deal. I am sure an agent will argue this point but sometimes everybody has to take a cut.

I can negotiate the commision myself but some brokers do not allow their agent to change it without broker approval.
0 votes Thank Flag Link Sat Dec 13, 2008
Certainly, you did all the leg work and found the property. Any decent agent would be willing to drop the commission by 1%. If the agent does not agree, keep in mind that you are not yet under contract and you can walk away at any time. Also, find out how long the house has been on the market ... that seller may be motivated and, you may not have to raise your offer.
0 votes Thank Flag Link Sat Dec 13, 2008
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