Home Buying in Alpine>Question Details

NJ Newbie, Home Buyer in New Jersey

Are there realtors that are willing to share a portion of their commission?

Asked by NJ Newbie, New Jersey Sun Jan 13, 2008

with the buyers to put towards the closing cost? In this buyer's market, is this a realistic expectation?

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Answers

44
Alan May’s answer
There are several buyers agencies that use that exact model... Redfin and ZipRealty both rebate a portion of their commission back to the buyer.

In this market there is so much choice for consumers, it's almost scary!! Ain't this a great country?
3 votes Thank Flag Link Sun Jan 13, 2008
Alan May, Real Estate Pro in Evanston, IL
MVP'08
Contact
When you ask an agent to give up part of their commision are you expecting a lower level of service?
7 votes Thank Flag Link Sun Jan 13, 2008
JR,

If I found a house then you wouldn't have to preview them, bring the family there, inspect it, etc. That saves you time and time equals money.

I can come to your house to put in a pool. But if you dig the hole, haul the dirt away, that will save me time, and I will charge you much less then if you didn't help. An accountant will charge x and hour to do my taxes. If I bring all my paperwork to him, organized and in order, he will spend less time on it and that therefore cost me less. A contractor will charge me x to redo my kitchen, but if I do the demo work, and haul the junk away, it will save him time and cost me less.

My point is that time equals money. I like it when my customers save me time, and I pass the savings onto them.

What would you prefer: to spend hours driving around different neighborhoods, over a few weeks (or longer) looking at scores of homes, or a buyer who comes to you and says "I want to buy the house on 123 Main St. Here is what I am willing to pay, similar homes sold for x, and I have secured financing."

I didn't mean to disrespect an agent. You provide a necessary service. I even said a good agent is worth their weight in gold. And I mean it.
4 votes Thank Flag Link Sun Jan 13, 2008
Rebates are illegal in NJ, so no it won't happen.

If rebates were legal, the vast majority of Realtors would not be willing to do this. But, you would find a few that might. Most of the Realtors who would do this will do so because they need to in order to get business.

If it were legal in NJ, it would be possible to find an agent who would offer a rebate and do a great job. Consumers sometimes think they got a deal, when they didn't. I have been in transactions when the other side was represented by a weak agent, but neither the agent or the consumer knew what they left on the table. The savings garnered in the deal you propose may come with a hefty price tag, also.

If it were legal, I am sure there would be some agents in NJ who would take you up. And, you might just find one who did a great job for a reduced fee. I hear the public speak often that they speak with several agents before finding a good one. Statistically, how many agents, then, would one need to talk with in order to find a great one who would also share commission....i.e. forfeit their paycheck.

Our society teaches us that if we are good at our jobs, and accomplish our goals, that we should earn less, not more. Traveling along that path of conventional wisdom, does it not then stand to reason that a confident agent who values themselves and takes pride in the work they deliver may not be willing to cut their income?

Here's a few similar examples:

As a business owner, I might think about hiring a less expensive attorney, but I trust the one I have. Sure, I wish his fees were lower, but given a choice of changing attorneys or paying his fees, I pay him. Someone else might choose the alternate atttorney.

Each buyer (in states that allow rebates) may choose the business strategy that works best for them. In choosing, there are always trade-offs, and the risk that the cost may be greater than the savings is a very real possibility. For those who are confident that they can minimize the risk, that model might be right for them.

Choice is a wonderful thing.
4 votes Thank Flag Link Sun Jan 13, 2008
Deborah Madey, Real Estate Pro in Red Bank, NJ
MVP'08
Contact
As a Professional, absolutely not! My Broker and I share, we are both licensed. The Buyer is my client and I am there to serve and protect their interest. There are not licensed and it is illegal and immoral to share with a buyer.

That being said, yes I am sure you will find someone who will do that, in fact there are several companies listed in the other posts. Think of it this way....if a professional Realtor is so willing to share/reduce their commission, what will they do when it's time to negotiate for you?
3 votes Thank Flag Link Sun Jan 13, 2008
Pam Winterba…, Real Estate Pro in San Ramon, CA
MVP'08
Contact
Why should I share my paycheck with a buyer? Will they be sharing something with me? Commissions are what we use to buy food to eat and make our house and car payments. They are our salary. Do you share your salary with people you just met?
3 votes Thank Flag Link Sun Jan 13, 2008
"Are there Realtors that are willing to share a portion of their commission?"

Share? Sharing (or "To Share"); to make joint use of resources (such as food or money), or to "give something away"

I am not sure if Panhandling is also illegal in New York, However you may want to try standing in front of a bank on the 1st & 15th of each month with a sign that says. " I am trying to buy a house, will you SHARE your paycheck with me"
3 votes Thank Flag Link Sun Jan 13, 2008
Mr.P, Other/Just Looking in Arizona
MVP'08
However, commission rebates are considered an illegal inducement in New Jersey. Redfin and ZipRealty cannot operate in NJ with this model.

-Marc
3 votes Thank Flag Link Sun Jan 13, 2008
Thomas,

In New Jersey this is expressly illegal. If we rebate, we lose our license. There are several other states like this also:

Alabama, Alaska, Kansas, Louisiana, Mississippi, Missouri, Montana, North Dakota, Oklahoma, Oregon, and Tennessee.
Web Reference: http://www.marcpaolella.com
2 votes Thank Flag Link Sun Jan 13, 2008
Chuck wrote:
Seems you hit a nerve with many of the Professionals. [[SNIP]]However, the process of going from house to house is time consuming, and I would think that a buyers agent would be "appreciative" if they didn't have to do that, and were able to spend the time on other aspects of real estate.
~~~~~~~~~~~~~~~~~~~
Chuck? What do you do for a living? Will you share your salary with me because you're appreciative I bought your product? NJ Newbie hasn't told me he'd be so appreciate and give me part of his salary either. You say the process of going house to house is time consuming. So is all the looking for the houses that are suitable for you, and previewing them so that when a buying comes along that the house would be perfect for, we know it. So is the negotiation, the inspection and appraisal, the bringing the family to see the house, too, all that is time consuming also. I'm very appreciative when a buyer makes an offer, but I can't think of any other field where anyone would even suggest the worker rebate their salary.
2 votes Thank Flag Link Sun Jan 13, 2008
It is something that is typically negotiable between a buyer and an agent, however I would worry about an agent that did not have enough business going on that they were willing to give up part of their commission. I think that you would be better off finding an agent that was a great negotiator on your behalf, and one that could get the sellers to end up paying all or a portion of your closing costs in addition to what ever price you negotiate.
2 votes Thank Flag Link Sun Jan 13, 2008
Chuck: In responding to your examples that you use below regarding your clients digging thier own swimming pool hole to save money. .

We don't charge our clients based on how many homes we show them or how much we drive them around. If we did we would charge a higher rate for clients that take months to find the right home and less to clients who find their own home. I do understnd your point but the time is worth money theory does not work in every business or profession.

Many people are looking on the internet and finding their own homes but that does not change the rest of the transaction. You want a strong negotiater who can represent your best interests. Bottom line is, you get what you pay for.
Web Reference: http://www.soreal.biz
1 vote Thank Flag Link Tue Jul 27, 2010
Ruth and Perry you said that agents who will share a portion of their commission is a realistic expectation but totally incorrect. What do you mean by that and do you share a portion of yours?

"A Realtor can save you more than any "sharing of his commission". "

What if you do use a realtor that also shares his commission, isn't that twice as good?
1 vote Thank Flag Link Tue Jul 27, 2010
Hi William,

Showing you the home is the LEAST important part of the job. The real estate industry is filled with housewives and househusbands who will be happy to show you the curtains and the proximity to schools and give you a rebate because, frankly, they are really not worth the whole commission anyway. They bring little to the table other than a smile and a lockbox key.

In addition to being an agent, I have been an extremely active appraiser for 25+ years. So when you are considering a home with me as your agent, you are getting the benefit of that experience. When we are considering an offer on a home, I am going to tell what the home is worth and why. You are not going to overpay, period, unless you want to.

In addition, in completing thousands of appraisals for REO/Foreclosure clients, part of the job is estimating repairs so the client can price the cost into the asking price. So, when you are looking at homes with me, I know how to inspect the dwelling and find trouble. Trouble that will cost you money, and trouble that you will want to factor in to your offering price. And trouble that you will want to bring to the attention of your home inspector to decide whether you even want to move forward.

So, the bottom line is you get what you pay for, in real estate as in anything else. The few thousand that you will save with a low-level agent who offers rebates will easily be offset by a lack of experience and knowledge. If you don't feel you will benefit from such professionalism and competence, there are thousands of desperate agents who will do anything for a deal, any deal, and will share their paycheck with you so they can stay in business for a few more weeks or months.

I offer more, charge more, will save you more, and am worth more. It's that simple.

Good luck!

-Marc

Marc Paolella
Relocation Director/Appraiser
Century 21 Joe Tekula Realtors
Phone (direct): (973) 584-4235
Coolest map-based home search: http://www.marcpaolella.com
1 vote Thank Flag Link Mon Jul 26, 2010
@ NJ Newbie
My agency Jersey Brokers is a Full Service brokerage which is now offering buyers up to 25% of the buyers agency commission back at close.

Of course rebate terms and conditions apply which are in our buyer agency agreements. This should help stretch your dollar a bit further or at least help buy some new furniture! ;-)


@ Chuck
when you buy a car for a lot less money than a house I might add, the sale is AS-IS but has a lot of different issues. One such issue is ownership and possible liens and encumbrances that may be attached to the property, other issues of ownership includes partnerships, estate sales and their beneficiaries, etc.etc. how about defects in the property, due diligence assistance, fiduciary duties, adherence to laws and local ordinances, help with financing, inspection issues, contamination remediation in compliance with state and federal regulations in accordance to their policies and requirements, coordinating the transaction and all its processes, independent objective 3rd party advice and emotional detachment when evaluating a property as well as during negotiations, agents also carry Errors and Omissions insurance.

The list really goes on and what should not be forgotten are things like collateral services, relocation (not just across town but states or globally), providing local area information, how about added security for both buyers and sellers, access! How else would you get in to see all the homes available, open houses? How about getting access to all the properties currently available that meet all your requirements and criteria. Although most home owners would love to save on commission, at the same token they don't have the ability, knowledge or motivation and time and or money to market their properties for sale, nor the technical savvy or equipment to get the job done.

There really isn't a simple cookie cutter answer, each transaction is different and has it's own issues so it's difficult to get into all the details of every possibly situation or transaction nuance.
1 vote Thank Flag Link Sun Jul 18, 2010
I can't help but jump in here even though I don't sell in Jersey. You mention the DYI shows and classes at Home Depot. They are becoming more and more popular because people love them and they make a lot of money for the sponsors putting them on. Same holds true with all the poker tornament shows but, few people are quitting their job to play poker as a means of support. Maybe it is a buyer's market in your area but it seems that you are a buyer who has not bought a house yet. Why is that? Different states have different laws about rebates or money back to the seller or buyer. It becomes more tricky with the buyer because of RESPA laws which govern the mortgage industry. Lately, state governing bodies are looking differently at things especially if there is a benefit to the principle in the transaction (the buyer or the seller). In otherwords, with full disclosure and consent of all parties involved you may be able to receive a portion of the broker fee back. However, if you are going to get a mortgage YOU may be in violation of your mortgage because when you apply, you are stating that it is going to the purchase of the house when, in fact, some of it is going into your pocket.
A better way to do this is to first get pre-approved for a mortgage. Not on-line. Sit down with a loan officer and get fully approved. Next, get a good real estate agent to work for you as a buyer's agent and find the perfect house for you before someone else finds it. At that point, ask your agent if you can structure an offer with seller contributions where the seller will contribute to a portion of your closing costs.
Then, move in and be happy!
1 vote Thank Flag Link Tue Jan 15, 2008
I can't blame you for trying, no. :)
So you would use the listing agent to see the house, and then Refin to negotiate the deal? Agents in my area put terminology in the MLS notes regarding a practice such as this. The ends up being twice the work for the listing agent with 1/2 the pay.
1 vote Thank Flag Link Sun Jan 13, 2008
JR,

To answer your question: "How do you see the inside?" Open houses, listing agents, FSBO, etc. Use "Redfin" when the listing agent asks if you have an agent, or give them the name of the agent who you have made a deal with. Its not that hard to look inside a home.

Forgive me if I use the wrong terminology, but rebates, reduced fees, kickbacks, or negotiations aside, as a buyer or seller, we are looking to maximize our buying or selling potential. Fees that we have to pay, reduce our leverage. That is why there are a ton of DIY TV show, books, and free classes at Home Depot. People who do not have that much money are just trying to stretch their dollar...can't blame a guy for trying can you???
1 vote Thank Flag Link Sun Jan 13, 2008
No such thing as "the going rate"
I imagine you also know that commissions are always negotiable -- everywhere.
That said, I've seen online services offering 75% commission rebates.
Sounds like us Georgia, Florida or South Carolina Realtors better make sure
we are earning our commissions. The question that was originally asked here
will be asked over and over again -- more & more frequently until it's a major part of the business.
1 vote Thank Flag Link Sun Jan 13, 2008
(I guess these agents have not heard that a whole new breed of brokerages are coming)
Yes I heard of them they were called....Foxtons?

So what is the going Rebate in Georgia, Florida, or South Carolina for a buyer who finds their own home?
1 vote Thank Flag Link Sun Jan 13, 2008
Mr.P, Other/Just Looking in Arizona
MVP'08
NJ Newbie - there are definitely realtors and companies that will share and/or rebate a portion of their commission. Be sure to understand what the realtor will and will not do for you in terms of service level. There are some full service firms that will provide a reduced fee - in general, many reduced fee brokers may not necessarily provide the same level of service to you - be sure to understand what services are important to you when evaluating the use of a realtor - for example, some reduced fee brokers/agents will not negotiate on your behalf or provide the detailed analysis that may be required.

It is not uncommon during the negotiation to ask a seller to provide a credit at closing to assist a buyer in covering closing costs. Most lenders allow for credits as much as 3% to 5% to be used to cover closing costs - above and beyond that may violate HUD requirements.

Some food for thought.
1 vote Thank Flag Link Sun Jan 13, 2008
Hi NJ,

I have to agree with Tiffany also. A good agent who guards you from overpaying by helping you decide upon the proper offer based on current market data is worth far more than the amount you would save from a commission cut by a mediocre agent. In addition to that, additional savings can be realized when a strong agent finds weakness in a seller that you can take advantage of as a buyer.

If you combine a strong buyer (a buyer who is not afraid to lose a house), with a strong agent (an agent who is not afraid to lose a deal), you are going to achieve your goal - getting a great house for a great price.

-Marc
Web Reference: http://www.marcpaolella.com
1 vote Thank Flag Link Sun Jan 13, 2008
Hire the best agent you can find and she will do a great job in negotiating the best price the market will bear. That is where you will realize your savings, not by dipping into her pocket. If you need help with closing costs, then talk to your agent about the possibility of building them into your purchase price. The home will have to appraise for the total amount - in essence it allows you to finance them.

Best,
Jeanne Feenick
Unwavering Commitment to Service
Web Reference: http://www.feenick.com
0 votes Thank Flag Link Thu Jun 30, 2011
What you can do is try to build a portion of your closing costs into the purchase price - essentially this will allow you to finance them in part. As an example, say you are offering $400,000 but want to build in up to $8,000 of closing costs into the deal. You could offer $408,000 with a seller's contingency to cover up to $8,000 in closing costs. I would suggest you include language that expands that to include prepaids and escrows as well.

What is important to remember is that the price of home for purposes of mortgage appraisal is $408,000 and also important to note that the seller will be realizing only the $400,000 - so you can see that it does "strain" the appraisal.

The bottom line is this - there are options. The combination of a good agent and a good mortgage rep will guide you well - and they are out there -- and I would agree are "worth their weight in gold"!

Best,
Jeanne Feenick
Unwavering Commitment to Service
Web Reference: http://www.feenick.com
0 votes Thank Flag Link Tue May 31, 2011
What you can do is try to build a portion of your closing costs into the purchase price - essentially this will allow you to finance them in part. As an example, say you are offering $400,000 but want to build in up to $8,000 of closing costs into the deal. You could offer $408,000 with a seller's contingency to cover up to $8,000 in closing costs. I would suggest you include language that expands that to include prepaids and escrows as well.

What is important to remember is that the price of home for purposes of mortgage appraisal is $408,000 and also important to note that the seller will be realizing only the $400,000 - so you can see that it does "strain" the appraisal.

The bottom line is this - there are options. The combination of a good agent and a good mortgage rep will guide you well - and they are out there -- and I would agree are "worth their weight in gold"!

Best,
Jeanne Feenick
Unwavering Commitment to Service
Web Reference: http://www.feenick.com
0 votes Thank Flag Link Tue May 31, 2011
What you can do is try to build a portion of your closing costs into the purchase price - essentially this will allow you to finance them in part. As an example, say you are offering $400,000 but want to build in up to $8,000 of closing costs into the deal. You could offer $408,000 with a seller's contingency to cover up to $8,000 in closing costs. I would suggest you include language that expands that to include prepaids and escrows as well.

What is important to remember is that the price of home for purposes of mortgage appraisal is $408,000 and also important to note that the seller will be realizing only the $400,000 - so you can see that it does "strain" the appraisal.

The bottom line is this - there are options. The combination of a good agent and a good mortgage rep will guide you well - and they are out there -- and I would agree are "worth their weight in gold"!

Best,
Jeanne Feenick
Unwavering Commitment to Service
Web Reference: http://www.feenick.com
0 votes Thank Flag Link Tue May 31, 2011
Dear NJ Newbie,
It's doubtful you would get anyone to agree with something like this. It's not uncommon for buyers to request this of the "Seller" in a transaction. Once you hire a buyer agent, you could discuss this option with them. I have had Sellers refuse to assist buyers with closing costs, so depending upon your offer, you might not get this either.
You might do better asking a friend or relative to assit you with financing or closing costs,. either as a gift or loan
0 votes Thank Flag Link Sat May 28, 2011
Every aspect of homebuying should be negotiable. If an individual realtor wants to give rebate to buyer, then it should be allowed. For the realtor association to disbar such a realtor is shameful and akin to bullying.
0 votes Thank Flag Link Sat May 28, 2011
William,

There is a concept called value in use that can sometimes trump market value. That concept means that someone can know a property has a given market value, but the value to them is higher than this number due to particular characteristics of the property that are uniquely suitable. For example take someone who is handicapped that needs to take the train into the city. A house located next door to a handicapped accessible train station will have a very high value in use to this buyer. He might be willing to overpay a bit to get that house over other similar homes without the unique aspects that fit his lifestyle.

My duty to this client is to advise him of the market value of the property. If he can get the property for this price, all is well. However if there are multiple offers on the property he might be perfectly willing to overpay by 10-20% to acquire this home with the special characteristics that are especially relevant to his lifestyle. My job is to make sure he goes in with his eyes open, not to prevent him from overpaying.

Next, why would a buyer want a value estimate for each property on a tour? Simple, so that when the right property comes along the buyer will have acquired a body of relevant market data from the homes that he did not make an offer on. That body of data will make him confident that he is paying the correct price for the home that IS the right match. You do not look at every home with the intention of buying. Sometimes a visit is purely educational and is used to assess value ranges in the particular market and neighborhood.

Next, realtors giving home inspection advice? Absolutely, I do it in every home. I point out flaws, features, areas of concern. Of course a real home inspection will be recommended and carried out if an offer is made and accepted, but meanwhile, again, the process is educational for the buyers. As the buyer progresses through each home, they will start to gain the ability to look for trouble by following my example. Some buyers are more knowledgeable than others with regard to the physical characteristics and construction methods observed in each home. My job is to educate the buyer wherever possible and bring him or her up to speed on what to look for.

William, the bottom line is you have a preconception that you are at no disavantage in using a rebate agent. You are utterly and completely wrong, but I feel confident that nothing will shake that preconception. You don't want to hear something different and you won't believe it if you do. You obvious have a distrust of experts and I suspect that extends to all professions, not just real estate. Therefore my advice to you is to go ahead and use a discount agent and enjoy your rebate. Victor seems like a good choice for you, so move forward with him and the best of luck.

-Marc

Marc Paolella
Relocation Director/Appraiser
Century 21 Joe Tekula Realtors
Phone (direct): (973) 584-4235
Coolest map-based home search: http://www.marcpaolella.com
0 votes Thank Flag Link Tue Jul 27, 2010
Marc that statement just doesn't make sense, if I was a realtor I would strongly advise anyone against paying MORE than a property is worth. If they pay more then how are you saving them money? You have not done a very good job trying to educate a clueless buyer that wants to spend more on anything than its worth. I can see why so many people are frustrated with realtors using this logic.

How can anyone want to pay more than the resale value, where is the strong professional guidance there? (For the record I am not a cheap person but do like savings and good deals)

To me spending more like that is plain stupidity, isn't your job as a realtor and appraiser to show the comps and negotiate for that buyer, where are the negotiating skills in offering higher than a home is worth and at what point does objective guidance go the way side just to make a sale?

Do you come across many people with the credit and money available looking to buy 20 homes very often? Why would anyone need a property evaluation for each property they tour if they are not putting in an offer? That entire paragraph totally lost me!

It is my understanding that appraisers are just educated guessers much like realtors but with more paperwork. You are both estimating price based off comparable properties that have recently sold right? Where is the rocket science in that? Look at the economy, it appears most appraisers had real issues with getting the price right just as much as realtors.

So appraisers give home inspection advice, I thought you weren't allowed to do that? Dont you advise clients to get a home inspection?

I know you can renegotiate after a competent home inspector finds any defects or issues with the house and most major issues can show obvious signs when first seeing the house?

There is something I don't like about a realtor who tells me how much the house is worth and doesn't try to stop me from paying more than its worth especially when they are also an appraiser and then offers up home inspection advice as well. I may sound crazy but isn't that all a huge conflict of interest, and I'm expected to pay more for it?

Using an agent / builder another conflict? I understand they may have some knowledge about replacement costs but a home inspector or a contractor would to and probably be more accurate with less conflicting interest involved.

You keep using the term bargain basement agents in a derogatory way but I have not seen the or heard anything yet convincing me they are so bad. How do you know if victor is a good experienced agent or not, maybe he is a builder or worked as a contractor, maybe he has a lot of pricing experience.

This is what I see from a buyers point of view. victor is an agent offering me a rebate $$$, he is showing me homes like you, he will instruct me to get a home inspection from a qualified licensed home inspector, I hope you do as well otherwise that is a HUGE red flag. He will do a CMA showing me the approximate value based on recent home sales in the area, down to the penny estimates are unnecessary since prices tend to fluctuate, my bank will send out an appraiser and he will ensure I wont over pay by not giving me a loan unless I cough up more money out of pocket, if there are inspection issues I can get a free or low cost estimate from a contractor and I won't have to worry about any conflicts in interest. All of this and I'd be getting money back at closing.

You have still to prove the point that agents offering buyer rebates are new or inexperienced incompetent agents, I don't see the correlation between offering rebates or not and making such assertions is considered having principals?

I think even agents with years of experience may not always be the best choice once interviewed. Everyone should interview an agent before hiring them. My advice to others is to go with your gut feeling after asking a few simple questions and if someone claims to be an expert in anything, probe and ask to see proof and results.

I called victor yesterday and he seems knowledgeable and a very helpful person who has been in real estate for quite a few years himself. He is not just a broker but the owner and seemed pretty responsible to me, I found him to be very polite a surprisingly uncommon trait among realtors these days.

You may be interested in this, I asked what he thought of marc and all his comments about victor on trulia including some nasty ones I saw in another post recently and he said he rather not comment or speak about other agents but noted that he was sure marc is probably good agent and services his clients well. Now that to me is a gentleman and shows good principals, morals and character. For whatever its worth I just wanted to share that experience.
0 votes Thank Flag Link Tue Jul 27, 2010
Hi NJ Newbie:

I am sure there are agents who will share a portion .

Is the expectation realistic, sure. But totally incorrect.

A Realtor can save you more than any "sharing of his commission".

There are some great posts on this board.

Perry
0 votes Thank Flag Link Mon Jul 26, 2010
William,

Just a few points:

"I'm not going to overpay unless I want to. Why would I want to?"

Many people intentionally overpay for a home. Sometimes they like the house enough that it is worth more to them than the actual market value. But they do want to know how much of a hit they are taking.

"... that leaves me asking which job you do full time"

William, I work 80-100 hours a week. Need I say more?

"...I thought my bank will order an appraisal, will you be doing the appraisal for my bank..."

Of course not. I said you are getting the benefit of the knowledge and experience involved with the completion of thousands of appraisals. I did not say I was providing you with an appraisal of the home you are going to buy. If you are looking at 20 houses with a realtor who is also an active appraiser, it must be obvious to you that you will be getting valuation and property insection expertise as you tour each property.

"...As a buyers agent and not an appraiser, how will you save me money as a full service buyers agent vs. a full service buyers agent offering rebates such as victor? You seem to be avoiding the question and answers like "I offer more, charge more, will save you more, and am worth more. It's that simple. " I don't understand how you charging more will save me money, I don't understand how you are worth more just because you have another job as an appraiser. How much does an appraisal cost and will I be getting one just by working with you?


An experienced competent agent saves you money in several ways:

1) Reduced chance of overpaying: Most agents are NOT adept at accurately arriving at the market value of real estate. It is not part of the training and most agents simply guess, the same as you would. Arriving at a correct value conclusion is NOT a skill that you will find in a typical agent.
A CMA performed by Joe Agent is NOT the same as a CMA performed by an agent with appraisal experience, or an agent with 25 years of sales experience in an area he or she is familiar with.
Further, the vast majority of agents are new and inexperienced. The failure rate is astoundingly high. Most agents are out of the business in 2 years. So if you pick any random agent to work with, you are likely working with a relatively inexperienced person.

2) Reduced chance of buying a bad house: Most agents are NOT adept at physically inspecting real esate and looking for structural problems, external problems, locational problems, etc. An agent with long years of appraisal experience has seen far more properties, and in greater depth, than the typical real estate agent. Furthermore, let's say we find a bunch of defects that need to be factored into our offer. Does the typical agent know how to accurately estimate these costs and provide the relevant discount? Usually no.
An even better approach in this respect might be to use an agent who is also a builder or a professional home inspector.

Are you getting it William? Not all professionals are created equal. Someone who has worked in ancillary areas will possess a greater depth of expertise than someone who has only had the extremely limited training that is required of a realtor. Appraisers are unique in that they look for trouble not only with the physicalities of the property, but also items that affect the value of the property. It's a very good combination!
In any case, an agent with long experience, experience which has value, is generally NOT going to be rebating you his paycheck. In fact, would you even want an agent negotiating for your money when he is unable to even negotiate his own pay? Probably not. If they have no problem giving away their own money, how hard will it be for them to give away your money?

I will state the Universal Truth of Life: You Get What You Pay For. If you want a bargain basement agent to represent you so you can get a $5,000 rebate, go for it. You are going to lose the savings in a myriad of other ways. And frankly I don't need or want to work with a client who wants me to give them my paycheck.
However, there are plenty of agents who either do not have, or do not value, their own expertise who will be happy to give you a rebate. You have to remember that most agents are going broke right now and are desperate so their loss is your gain. So if that's what you want, go to one of them and good luck. Nobody is forcing you to use a principled and competent expert. That's Capitalism and that's Freedom and that's the system I love and the system I want to keep.

So basically, do whatever seems right to you!

-Marc

Marc Paolella
Relocation Director/Appraiser
Century 21 Joe Tekula Realtors
Phone (direct): (973) 584-4235
Coolest map-based home search: http://www.marcpaolella.com
0 votes Thank Flag Link Mon Jul 26, 2010
A realtor cannot assist in a buyers closing costs however a buyer can do whatever they want with the rebate money as long as the funds are credited to the buyer in the form of a credit or a check which directly reduces the commission due the buyer agency at close. There ARE specific rules in place governing how rebates will be given and in order to offer rebates, the broker must be making the offer and not just any agent in the office each making up their own offers. In addition, there must be an agreement in writing specifying the terms of the rebate at the time you begin working with the buyer, you can't just decide to offer them a rebate later in the transaction, that would be indicative of an offer to induce as in a case if a buyer agent was trying to pull a client away from another agent.

This is why I offer rebates as part of the buyer agency agreement which is set at the time you begin working with the client. I like agreements to be in writing anyway, this pre-empts any misunderstandings later.

As far as closing costs, just ask for a sellers concession, they are very commonly used especially in this market. I would probably not ask for one however if you are lowballing on your purchase offer as it probably won't get accepted.

@ William S.
Good to see someone is noticing this besides me, it's also unethical IMO to criticize other agents because you don't agree with or like their practices. I've asked the same questions as you before but just ended up in getting attacked by a few agents instead. Unfortunately I am expecting to see more of this from agents with low on ethics and self esteem. I'm a very knowlagable experienced agent and offer full service to buyers, I offer CMA's and will run the comps right in front of my clients to show I'm not "playing with the numbers", many agent won't do that. CMA's and appraisals can be fudged and often are to paint a picture. Anyway I offer all the same services as any other so called "Full Service" buyers agent, just offer a rebates.

That being said I don't think someone should skimp on "Full Service" when it comes to dealing with selling a home, that is when you get what you pay for because of the expenses involved.
0 votes Thank Flag Link Mon Jul 26, 2010
Recently New Jersey passed a rebate for buyers from the Broker themselves, however, the rules and regs. have yet to be promulgated by the NJREC. This rebate is in the form of a check at closing. But again no rules.
A realtor cannot assist in a buyers closing costs because it is considered an inducement to the buyers to go directly to that Realtor.
Plus, why should a Realtor pay for any clients costs. Those are the clients cost. Do you ask your clients or customers for a reimbursement of your costs. Of course not. This is how a Realtor gets paid and yes it may seem like a lot of money om a per transaction basis, it really is not. The monies from a commission must be split with the other agent, their broker and your agents broker. There has plenty expenses paid for by the agent even over and above the gas to drive the client around, the cars wear and tear and the extra insurance coverage, plus the professional expenses and E&O insurance, just to start.. Which by the way is not paid for by the Broker but directly by the agent.
If you are looking for one to pay closing costs, look at some of the NJ programs out there (Smat Start), or ask the seller to assist - just raise the purchase price to compensate it.
0 votes Thank Flag Link Mon Jul 26, 2010
I'm not going to over pay unless I want to? Why would I want to?

You still haven't explained how or what you do is so different from buyers agents who give rebates.

You said that you also are an appaiser but that leaves me asking which job do you really do full time, appraiser or realtor? If you have done thousands of appraisals I would assume appraiser. Do you give free appraisals to everyone who works with you as a realtor?

I know in reality most realtors should look up comparative sales to make sure I won't over pay but most don't even do that and I'm talking about ALL realtors not just those who give or dont give rebates.

As I buyer I thought my bank will order an appraisal, will you be doing the appraisal for my bank and if so isn't that a conflict of interest?

So in the end you have only told me the difference between you and victor is that you are an appraiser as well as a realtor which makes victor a low-level agent who offers rebates that lacks experience and knowledge.

I thought that offering rebates in new jersey is a new law just passed? How can you say anyone offering them will be out of business in a few weeks or months? So far you posted a lot of negative personal opinions taking bad about agents offering rebates calling them desperate, incompetent agents lacking experience, knowledge and professionalism. That doesn't seem too professional to me and you still haven't answered my question.

As a buyers agent and not an appraiser, how will you save me money as a full service buyers agent vs. a full service buyers agent offering rebates such as victor? You seem to be avoiding the question and answers like

"I offer more, charge more, will save you more, and am worth more. It's that simple. "

I don't understand how you charging more will save me money, I don't understand how you are worth more just because you have another job as an appraiser. How much does an appraisal cost and will I be getting one just by working with you?

If I do get an appraisal from you as my realtor, how will that benefit me more than any other agent offering a CMA for the house I'm about to buy. Don't other agents offer the same services without being able to legally call it an appraisal and will you give a lower appraisal or use different sales information to save me money?

I would probably be getting the house at the same price but the only difference being I'd also be getting some money back at closing, is that correct? Let me know if I'm missing something, it hasn't been very clear how you can save me more money over the agent offering me a rebate.
0 votes Thank Flag Link Mon Jul 26, 2010
Marc, I've been quietly watching you, victor and another lady who's remarks have been removed go at each others throats in here. It seems that you are staunchly against passing these types of saving on to buyers you work with and have been very vocal against those who do. Those remarks seem to have been deleted.

Can you tell me out of curiosity how to agents providing buyers full service, take you vs. victor for example can explain why I should go with you over him? Why your service of showing me homes is better than his and will save me more money?

As long as your both full service, I think that means both show as many homes to the buyer as they need and set them up with financing etc. Why I should go with you over him and how that will save me more money or are you just saying that because he offers rebates he must not know how to negotiate?

He seems to do a pretty good job handing those opposing him here.
0 votes Thank Flag Link Mon Jul 26, 2010
Hi NJN,

As always you get what you pay for. If you go with a bargain basement agency that is unable to even negotiate strongly for their own compensation, then what do you think you can expect when they go to bat for you in negotiating price and terms?

Make sure you thoroughly interview any agent before using them. If their main selling point is that they are willing to rebate their commission rather than providing expert service, you will likely be losing that rebate savings in other ways.

Good luck!

-Marc

Marc Paolella
Relocation Director/Appraiser
Century 21 Joe Tekula Realtors
Phone (direct): (973) 584-4235
Coolest map-based home search: http://www.marcpaolella.com
0 votes Thank Flag Link Mon Jul 19, 2010
A real estate transaction is complicated because of many reasons, and those reasons are not because of the real estate agent. It's just as complicated if you sell your house privately. Those reasons have to do with state laws and with our litigeous society.
0 votes Thank Flag Link Tue Jan 15, 2008
Good answer Joe.
May I ask a very stupid question: Why is a real estate transaction so complicated? Why can't it be simple like purchasing a car? Why are there so many different people involved in the transaction? I can understand title insurance, you are buying the peace of mind that no one has a claim to your property. But everything else just complicates the process. I can pay for a home inspector to check out the place for defects and a surveyor to make sure I am getting the property I am paying for on my own. I know its a very naive question, but it seem like there is so much bureaucracy involved that it adds so much money to buy and sell a house. I don't mean to ask such a simple question, but the whole process seems suspect. It reminds me of the movie "The Firm" when they talk about over billing..."It has happened for so long that no one even questions it anymore" No blasting your profession, just trying to understand it...
0 votes Thank Flag Link Tue Jan 15, 2008
Thanks Marc for the clarification. While rebates are illegal, there are quite a few firms willing to provide varied levels of services for reduced fees - consumers simply need to be sure they understand what they are and are NOT getting from the agent that provides reduced fees.
0 votes Thank Flag Link Sun Jan 13, 2008
JR,
If I found a house then you wouldn't have to preview them, bring the family there, inspect it, etc. That saves you time and time equals money.
~~~~~~~~~~~~
How are you going to get inside without the agent?
#############
I can come to your house to put in a pool. But if you dig the hole, haul the dirt away, that will save me time, and I will charge you much less then if you didn't help. An accountant will charge x and hour to do my taxes. If I bring all my paperwork to him, organized and in order, he will spend less time on it and that therefore cost me less. A contractor will charge me x to redo my kitchen, but if I do the demo work, and haul the junk away, it will save him time and cost me less.
~~~~~~~~~~~~~~~~
Right, so in other words, you will not discount the work you do.

##############
My point is that time equals money. I like it when my customers save me time, and I pass the savings onto them.
What would you prefer: to spend hours driving around different neighborhoods, over a few weeks (or longer) looking at scores of homes, or a buyer who comes to you and says "I want to buy the house on 123 Main St. Here is what I am willing to pay, similar homes sold for x, and I have secured financing."
~~~~~~~~~~~~~~~~~~~~
How did you see the inside? Are you going to buy it without seeing the inside?

##################
I didn't mean to disrespect an agent. You provide a necessary service. I even said a good agent is worth their weight in gold. And I mean it.
~~~~~~~~~~~~~~
Thank you. I'm still not understanding this process of looking at pictures of houses and somehow ruling them out without actually seeing the inside of them. I don't equate my adding up my deductions for my accountant with selecting a home. Once you get inside you may find it isn't suitable. You will not negotiate it yourself. I am paid for results, by the seller. My buyers already find view houses on the web. Many times there's a house they don't want to go to, but once we get there, it's just what they're looking for. I know I will not convince you and that's fine. But I do not kick back my salary. Perhaps in the future someone will come up with a model to replace my services. If they do, I will adjust to it.
0 votes Thank Flag Link Sun Jan 13, 2008
Chuck, I agree with you. We make deals like that down here in Georgia. If you go find the house & we're just representing you in the transaction, we will negotiate our fee. Your logic in the most recent post is consistent with our position -- time is money. I run a very successful boutique brokerage, so it's not like we're desperate for the business. It just makes sense to look at the total business case. I can't speak to the law in NJ, but it's perfectly legal in many states. Check out http://www.buysiderealty.com or http://www.redfin.com (I guess these agents have not heard that a whole new breed of brokerages are coming)
0 votes Thank Flag Link Sun Jan 13, 2008
No. it is not a realistic expectation. It is not part of the deal.

Look for sellers that are offering percentage points -or- Make your offer and try to get it as part make it part of the deal. there are many incentives that sellers are offering at this time.

Let's say you fix transmissions and work for Aamco, Can I bring my car for a new transmission andt hen the Friday afterwards, come to you at your job when you get paid and you give back me part of your weekly paycheck because you only get to fix one trasmission a month? nope, You are not giving me anything are you? But If I looked in the paper and brought in a coupon for 25% off any transmission job and the employer gave it to me... I made a good deal.
0 votes Thank Flag Link Sun Jan 13, 2008
NJ,

Seems you hit a nerve with many of the Professionals. I had a similar questions. I thought that if I did the legwork to find a place then I could "pay" the buyers agent less. (Yes, I know the seller "pays" for both the buyers and sellers agent, but EVERYTHING is negotiable.) Many buyer agents will say that they do much more than just find homes, and I believe them. However, the process of going from house to house is time consuming, and I would think that a buyers agent would be "appreciative" if they didn't have to do that, and were able to spend the time on other aspects of real estate.

Maybe instead of trying to share their commission, you could give them extra motivation...tell an agent you will pay them 1k for every 10K they can reduce the sales price. Agents have a lot of pride in their ability to sell a house more than a FSBO and buy a house for less than the average homebuyer can.

A good agent is worth his/her weight in gold...good luck finding one.
0 votes Thank Flag Link Sun Jan 13, 2008
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