Home Buying in Milwaukee>Question Details

Zmk, Both Buyer and Seller in Milwaukee County, WI

As a potential buyer going through open houses, sometimes I'm not sure whether or not I want to use a buyer's

Asked by Zmk, Milwaukee County, WI Fri May 1, 2009

agent. In some cases I may want to deal directly with the selling agent, in others I may want to use my agent - I do not have any agreement with my buyer's agent. How do I handle this situation? Also, don't get me wrong, I'm not looking to weasel my buyer's agent out of her comission, and she is not the one directing me to the open houses - so I really don't feel she has earned anything (and quite honestly I prefer it this way - for now). I live in Wisconsin.

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You have the right to choose any way you feel comfortable. If you do not have an agreement
with this "Buyers Agent" than she is not your Buyers agent. I usually do not press the Buyers agency agreement, some people feel more comfortable with one because he/she works just for them. Others like yourself feel that they can handle things themselves. Just last week I was showing homes for the 2nd time that week to the same group of investors, when they asked me to please represent them. They realized that I would disclose more to them regarding the property and the ins and outs of the market than I would with someone just passing thru a home. I hope this helps.
Colleen (CC) Hine
Keefe Real Estate
1 vote Thank Flag Link Fri May 1, 2009
I wish I COULD say yes, but I'd never be able to pay the bills that way. Probably 3-4 sellers/buyers out of 20 would seek services that way.

Redfin is a completely different business model. The "agents" are actually employees of Redfin and get paid when they do something, like attend a home inspection or hold an open house or write an offer. If more buyers and sellers were willing to do that, it'd be great. (But Ridfin just laid off a bunch of people last year, so it makes me wonder if it's putting food on the table for those agents.)

But the reality is that most people don't want pay as they go. I work with clients for months at a time, I can do dozens of showings, open houses, offers, etc and if they decide not to buy or sell, I don't make a cent. It's a huge risk on our part. The decent payoff at the end is what makes it all worth it. (Sometimes.)

Trust me, 80% of agents would LOVE to be paid for the services they provide, instead of getting screwed over all of the time. Just like a home inspector gets paid for the inspection, whether or not the buyer ultimately buys the house.

But iIt's not US holding things up - it's all of your peers who don't want to take the risk of paying for services that might not result in a sale. They want us to take all of the risk and only get paid if the house sells or they buy something. It has nothing to do with "full service" vs. "limited service."

How many buyers would be willing to pay for all of the time we spend showing them houses, attending inspections, our time going back and forth on phone calls and all? How do you charge for knowledge and expertise? Filling out the offer paperwork maybe takes 1-2 hours, but HOW that paperwork gets filled out takes knowledge and experience - that is hard to price.

Anyhow, there are fee-for-service companies in Milwaukee. Assist-to-Sell has been around for years. But more people go to traditional brokers, because they don't like taking the risk and paying as they go. Otherwise, why hasn't Assist-to-Sell taken over the real estate market? Why don't more people use all of the limited service and MLS-only companies in the area?

The only way for change:

1. Buyers have to pay for their own services as rendered and lenders would have to allow them to roll the costs into the closing.

2. Sellers have to be willing to pay-as-they-go, as services are rendered and pay premium prices for more experienced agents and superior service.

3. The state would have to limit agent liability. If we take a client, we have HUGE liability to protect them. If a client says "I just want a sign, MLS and web exposure," agents would have to be protected from those clients from suing us because we didn't jump in and protect their interests, while they were trying to save money, by not choosing to buy the "negotiating" package.

I see this all of the time with FSBOs. They don't want to hire an agent, but as soon as I become involved with my buyer client, they expect me to start helping THEM. And often I have to jump in, because I see them making huge mistakes that could affect my actual client, the buyers. That is a HUGE liability for me and I'm not even getting paid for it by the person I'm helping! So, what do we do when a seller hires us to take pictures, but we get there and see a horribly staged and overpriced house? They didn't hire us to stage and price, so, what is our obligation then? And we don't really care if the house sells, because we get paid for our services we actually got hired for. There was a reason why the "success fee" system got started - clients wanted agents to have a vested interest in the house actually SELLING.

If buyers and sellers were flocking in droves to fee-for-service companies and demanding that kind of service over traditional brokerage, causing traditional brokerages to lose market share, the system would change REALLY fast. Not only that, the less competent agents would get weeded out, consumers would be less capricious with agent's time (only SERIOUS buyers and sellers) allowing agents to handle more transactions. But MOST consumers don't want the alternative to the current structure.

I know a broker who offers both kinds of services to clients, fee-for-service and success fee by commission. He says the fee-for-services would cost the client FAR less, but people OVERWHELMINGLY chose the success fee, because it was less risk to them and didn't cost them anything upfront. Consequently, most of his income is from commissions, not fee-for-service.

Like I said, I would LOVE to get paid for what I actually do and not do a lot of work that I'm often not compensated for at all. Most agents HATE the way things work now, too. Sometimes I wish commissions would be outlawed and we were all forced to charge for services and consumers had to actually pay us for our work - it's the only way I can see it happening!

But it's not NAR keeping the status quo, it's your fellow consumers!
2 votes Thank Flag Link Fri May 29, 2009
Kristin - I was hoping you'd come back and say yes. You say "the system is not set up that way" - you hit the nail on on the head on why I feel disenfranchised by realtors and the system. How much would I be willing to pay? I would probably be willing to pay a few thousand, with perhaps a hybrid comission based system. I would love the same thing on the buy side. I understand some people want a full service realtor, but I want a half service realtor. What I have a problem with is the collusion in commission. I would love to pay an agent just to do marketing.
~~~~~~~~~~~~

Kristen gave you a very good follow up answer, but I’d like to chime in myself. You say you say some people want a full service realtor but you want a half service realtor, presumably you would pay for whatever services you get, whether or not that results in a sale or not. That is commendable to you as a person, you acknowledge that someone is doing work and should be paid. You are not the norm, trust me. Most people want the realtor to take all the risk and they take none. One homeowner actually told me that if they find a buyer on their own they plan on asking for a release from their exclusive listing with me to sell to them without paying commission. Seriously. And this was a neighbor. When working with buyers and explaining different types of agency, as I am required to do by law, when I get to the part about “I can work in your best interests. . . .” do you know what the first thing MOST people say is? “DOES THAT MEAN I HAVE TO PAY YOU?”

As Kristen said, it isn’t us, it’s your peers who are preventing a la carte or pay for service models.
1 vote Thank Flag Link Thu Jul 30, 2009
Fortunately, very few people feel this way. A Buyer Representative, one who is an ACCREDITED BUYER REPRESENTATIVE (means specialized training ... and participating in their association), and help you so much more than you realize. Sure, you can run from open house to open house, but don't you want someone on your side, someone who will be able to do specialized research, look out for your best interest, get the get deal for you during negotiations.
There is an old saying that a lawyer should not represent himself; or a doctor should not be his own doctor. Why? Because they can only see a problem in one manner, and they need someone who can research all options and not be too close to the problem to resolve it.
Also, running from open house to open house is very time consuming, unless this is a hobby. As a Realtor(R) , I can set you up to receive all properties on the market, and then you will receive all new properties as they come on the market.
Another thought: How many of properties actually hold open houses? Especially, if they are investment properties. Answer: Very few. So, you are missing out on some great properties.
ANOTHER BIG DIFFERENCE, if you use the selling broker, they represent the seller, and will not make certain suggestions to make sure you get all the benefits that are available to you. They don't want to spend the sellers money ... nor should they.
Would you rather be represented, or just write the best offer that you know how. The sellers agent cannot suggest what you should write in your offer. SO, IT IS UP TO YOU TO DECIDE WHAT IS THE BEST WAY TO GO.
PS I find that many people who do not want to be represented by a buyer agent, will then ask us to do exactly what a buyer agent would do, and we cannot ... WHY? if we are working with you as the buyer, without being a BUYER REPRESENTATIVE, we are merely sub-agents of the listing broker, and this means we TOO WORK FOR THE SELLER AND NOT FOR YOU. dbell4444@att.net
1 vote Thank Flag Link Wed Jul 29, 2009
Dear Goat,

In the State of Wisconsin, unless you have a contract with the buyer, you automatically represent seller. It is precisely for this reason that you should have a buyer agency. And I take great offense to your comments regarding highest price. When I work for my clients, that is exactly what I do-I work and I work hard. They are my number one priorty and their best interest is all I have in mind. I invite you to talk to ANY of my clients and confirm.

You sound very bitter toward agents and the only thing I can come up with is you either must have had an extremely bad relationship with one or you are just extremely misinformed. Let me share one of my last testimonies with you. This comes from a highly respected inspector Bob Beisber, "Linda, I run into a lot of agents that don't know a dishwasher from a doorknob. You really care about your clients and I was almost floored when you told Amy and Nick to sleep on it before making an offer. Any other agent would put the pressure on to make an offer without thinking twice. Most realtors feel inconvenienced by spending too much time with their clients and get frustrated when they want to think about it. I don't know how many times I heard the realtor say "well if you don't write an offer now it may be gone tomorrow". I work with realtors that care more about their numbers than their clients. It's refreshing watching you interact with Nick and Tina because you don't treat real-estate as a job, but as a passion, a quest to be the best and do the best job for your clients first and foremost. You made a huge impression on me yesterday and wanted to share that with everyone. "

In addition, my husband says, on a regular basis, Honey, you are the best volunteer real estate agent in town." He says this because I put in long hours for my clients and because I specialize in first-time home buyers, very often it takes months and sometimes more than a year of working with them through the process before we ever actually get to a closing. I don't tell you these things to 'sound my own horn' so to speak. I am rambling on because I am tired of hearing the negativity about real estate agents. I'll be the first to admit that there are a few that might fit in the box you have painted, but I can assure that there are many more who care deeply and passionately for their clients. That is another reason why it is so important to shop around when looking for someone to represent you.

I would love to be your agent and show you how it should be done.

Linda S. Cefalu
1 vote Thank Flag Link Fri May 29, 2009
Have you thought of asking the agent if she offers a flat service fee should you choose not to use her to make an offer? I would do that, or I would be sure that as soon as I knew I wasn't going to use her, I'd get her a gift card to a restaurant or Starbucks or something with a note explaining your appreciation for the time she did give you but that you found a house on your own.
1 vote Thank Flag Link Fri May 1, 2009
Thanks to both of you for your answers! Perhaps I should be a little more specific, is there any protocol I should (or need) to follow? For instance we have been in several open houses where the showing agents are picky about how I sign in - whether it's "[my name] c/o [my agent]" versus just My name.

We purchased our existing home with the listing agent, and there were pluses and minuses. But the reason we did so, (per our mortgage broker) was due to the way we signed in at the open house, and we were fine leaving it that way.

This whole procedure seems a little bizzare to me, just looking for proper protocol.
1 vote Thank Flag Link Fri May 1, 2009
I used the listing agent for my home purchase on a really attractive competetively priced house. I feel that her acting as a dual agent was an important factor in our offer beating out the other two coming in and she was instrumental in negotiating the brand new washer & dryer that conveyed.

I got a really good vibe from her right away in how she answered my questions as the listing agent. If I had not trusted her like I did, I wouldn't have used her. She now my listing agent and I continue to think she's fabulous. =)
1 vote Thank Flag Link Fri May 1, 2009
In Illinois we are allowed to do dual agency, meaning represent both the buyer and the seller with full disclosure. We must be very careful to be completely fair, impartial, etc. with both parties and have disclosures signed stating that fact. We, the REALTOR, actually become a negotiator, middle man, facilitator, whatever term you want to use. I actually believe many times this simplifies things by virtue of the fact that there are not as many parties involved for the information to travel through. You know, the "he said," and "she said" routine. As a Realtor we cannot force a buyer to pay a certain amount and we cannot force a seller to accept a certain amount.....we are just a buffer to facilitate the process of arriving at the magic number a seller will accept and a buyer is willing and able to pay. I have not used buyer agent contracts to try to "tie" a buyer to me exclusively although I know those are used in many areas. My reason is that I feel it "ties" ME to that buyer to inform them of EVERY property that comes along that meets their needs, that can be pretty tough when you are working with multiple clients seeking similar homes. I would not like to be accused of shirking my duty. Open Houses are an excellent way to get a picture of what you can get for your money. Good luck!
1 vote Thank Flag Link Fri May 1, 2009
I have replied to you as have 41 others.

Have you made a decision based on the answers below.

MY ANSWER IS REALLY MORE SIMPLE. The time is right when you are. And you are not only going to build equity, but have a paid for home (hopefully) when you retire. Only property taxes to pay ... or sell and downsize. WHAT COULD BE A BETTER RETIREMENT ACCCOUNT THAN THAT???
DONNA BELL OF REALTY RESULTS, PEWAUKEE, WI. dbell4444@att.net
0 votes Thank Flag Link Sun Aug 2, 2009
Hi Zmk, I understand your train of thought here, however let me try to put some perspective on this. I am an agent in NJ, so I do not know what your consumer protection laws are like in Milwaukee, but I would suggest maybe for you to do some research. Here in NJ, we as Agents & Brokers must define our business relationships from the start with our clients. We do this with what they call a CIS statement from the start. This must be in the file, every file. There is a fine line in NJ as far as representing both a seller on the listing end, and a buyer on the by end. If I am not mistaken we are one of the states that do not as yet have something called a transaction broker. As consultants, and agents representing either buyer or seller we are bound by certain laws of confidentiality, and our clients, both buyer or seller confide certain things that are sensitive on both sides of the transaction. If the clients on the sell side are our clients, and the buyer is now our client we have to have everyone sign off on that which is called being a "Dual Disclosed Agent" we need permissiion from both Seller and Buyer to conduct business on both of their behalf. It would be like an Attorney representing both parties. Research your State Law or ask a Realtor. Most of the general public is not aware that our laws as agents are serious & binding & our laws of Agency. I am fussie when it comes to agent referrals, meaning I know when I refer to another state or anywhere, I am fussie about the education and years in and experience to the agent I refer to for many reasons. I suggest if you have an agent that is working on your behalf to represent you, an your have confidence in that agent, and a business relationship for that agent, then knowing what I know I would have a buyers agent and secure that position. Finding the home is an esy task. Anyone can find the home, it is the protection and commitment after the contract is signed is where the real work comes in. Would you just trust any accountant, or insurance broker, or mortgage lender, or bank or attorney, etc. To me to have a personal relationship with a trusted professional in all my real estate goals, which is one of the largest investments your most likely ever make is key for me . It would be part of me building a winning team to go thru life with. I do not like to be just a number.
0 votes Thank Flag Link Sat May 30, 2009
By the way - I happen to be affiliated with a traditional broker, so I don't really have the option to offer fee-for-service at this time. That doesn't mean that I'm against it. I think we should offer both options.

I think my company WOULD allow me to charge just for certain services, though. I think the big question for them is liability and that the state requires us to represent client's best interests. That is what I usually hear when this has come up in the past. The state basically requires us to give specific level of services to a customer and client. So, if we see that a client is making a huge mistake, but they didn't hire us for that, are we required to basically give them that service for free, because of the law? It's hard to tell.

Also, my company takes 1/2 of whatever I make in fees. So, I'd have to charge enough to make it worth it to me after 1/2 goes to them. I have no idea what that would be.

It's an interesting thought and I'll have to look more into that. I'm not exactly sure how limited service companies in this state get around the liability issues.

Thanks for the dialog!
0 votes Thank Flag Link Sat May 30, 2009
Kristin - I was hoping you'd come back and say yes. You say "the system is not set up that way" - you hit the nail on on the head on why I feel disenfranchised by realtors and the system. How much would I be willing to pay? I would probably be willing to pay a few thousand, with perhaps a hybrid comission based system. I would love the same thing on the buy side. I understand some people want a full service realtor, but I want a half service realtor. What I have a problem with is the collusion in commission. I would love to pay an agent just to do marketing.

I'm not suggesting that agents are making out like bandits, I just wish there more choices. I would LOVE to see http://www.redfin.com come to our area.
0 votes Thank Flag Link Fri May 29, 2009
I'd love to be able to do that. I'd love to get paid based on my experience, skills and the actual work I do, instead of some random percentage. I hate the fact that an agent with 3 months of experience can stick a sign in the lawn, enter the listing in MLS with 6 blurry photos and hold a few open houses and gets paid the same as I do - and I have 12 years experience, with ABR, SRES and CHMS training and extensive internet marketing.

Unfortunately, the system is not set up that way, because most sellers don't want to have to pay for services rendered and experienced agents - they only want to pay a success fee at the end. Also, buyers don't want to pay for our services at all - they are happy with the status quo of buyer agents getting paid with a commission split.

Many companies that have tried the "a la carte" services you describe cannot stay in business. Buyers and Sellers have no idea the true value of a good agent, so agents can't charge enough per service to cover costs and make a decent living. And low-end buyers/sellers would suffer, because no one could afford them.

The power of changing the costs of real estate related services sits squarely in the hands of the consumer, yet the majority choose the status quo. And the state requires that we represent the client's best interest, yet most sellers and buyers don't know what is truly valuable - they go for the cheapest rate, figuring we're all the same and get the same results. It's also hard to determine rates for things like negotiations - something like that could take 15 minutes or 15 hours. And an agent with 12 years experience will be a much better negotiator and troubleshooter than one with 2 years experience. So, what do we charge for those a la carte services?

I'm curious, what would you be willing to pay for those servies and which services do you think would be most beneficial to you?
0 votes Thank Flag Link Fri May 29, 2009
Also - I apologize for my continued mis-spelling of the word commission.
0 votes Thank Flag Link Fri May 29, 2009
Kirsten,
What if I were to ask you if I could pick and choose your services to reduce your comission?
0 votes Thank Flag Link Fri May 29, 2009
It'd be great, too, if you'd come back after all is said and done and give an HONEST assessment of your experiences - both with working with a FSBO and a flat-fee company. It would probably be helpful to a lot of people.
0 votes Thank Flag Link Fri May 29, 2009
Good luck, Zmk.

If selling a house was still as easy as sticking it in MLS, I guess I'm wasting a lot of time and money on a web site, high-quality photos, floor plans, sign lights, virtual tours, videos, syndicating listings, online ads, social network ads, home staging, email campaigns, agent tours, etc. The MLS doesn't have the power it used to have.

The majority of FSBOs and flat-fee customers - the SUCCESSFUL sellers - say they'd never do it that way again.

I hope that you are one of the few lucky ones - both buying and selling sides - that it works out for.

I'd love to hear what you've read about NAR that suddenly has you disenfranchised.

Regardless of what you've read, real estate agents are INDEPENDENT CONTRACTORS. That means we all run our own real estate practice. You can't take experiences with one agent and assume they are all the same. Even agents within the same company are vastly different. It's up to the consumer to take the responsibility to make smart choices when hiring. Unfortunately, most consumers think our job is to stick a sign in the lawn, submit the listing to MLS and hold open houses. They don't know all that a skilled and experienced agent can bring to the table.

It's like hiring a personal injury lawyer, with 3 years experience, to handle a high-profile, multi-million dollar class action suit. No intelligent person would do it! Yet people hire inexperienced, ignorant, unorganized and lazy agents, because they are the cheapest or just the first agent they contacted, don't check references and then are suprised when they get crappy service?? And then ALL agents must be like that.

It never ceases to amaze me.
0 votes Thank Flag Link Fri May 29, 2009
Goat, I'm with you - 100%. We plan on making on offer on this house without an agent. The more reading, and research I do, the more disenfranchised I feel from the NAR. In fact, I've even decided to list our house with a flat fee realtor (I would skip this too, but I do understand I must comply with the MLS monopoly).
0 votes Thank Flag Link Fri May 29, 2009
Zmk, the difference in our commission is negligible as far as what you are paying when you buy. Making an extra $60-100 is not worth the bad "press" we would get from a buyer (and a seller) if we do not do our job. We make our money on referrals from happy buyers and sellers. Goat probably has a job where he gets paid just for showing up and anchoring a counter to the floor for 8 hours, or he would understand that what makes a sales person or independent businessperson successful is satisfied customers.
0 votes Thank Flag Link Fri May 29, 2009
Wow. The NAR talking points are all coming through here.

Bottom line is that a buyers agent represents the best interest of the seller because the seller an buyers agent both want the highest possible price to max their gains.

See how this scam works?

Now get a good real estate attorney to do contract work, go to the courthouse for comps that are not padded by agents, and get a great deal or no deal.
0 votes Thank Flag Link Thu May 28, 2009
Dear Home Buying in Milwaukee,

If you're still there, all I have to add is this. Go back and read Kristin Noll's answer and then read it again and again. There are probably 20 more pages she could to her answer as to why you should have a trusted agent in your corner whether on the buying or selling side.

P.S. When you purchase a home with a buyer agency contract, the payment to your agent comes from the selling side or in the case of a "For Sale By Owner"- from the owner unless the For Sale By Owner refuses to pay which almost never happens. Many For Sale By Owners actually advertise that they are willing to pay a co-broke commission.

And if all your agent is doing is pointing you to open houses, he or she is doing a great disservice to you and him or herself.

Hope this helps

Linda S. Cefalu
0 votes Thank Flag Link Thu May 28, 2009
There is no reason why you can't negotiate this yourself and try to get the house for $8,000 cheaper.

Are you sure the house is priced correctly? Can you get it even cheaper than that? Where is the seller getting title insurance? Are they expecting you to pay for it or will they? What about gap insurance? Do you know all of the appropriate tests for inspection? Is the area known for radon or radium? What about lead-based paint disclosures? Will the seller have the right to cure defects? Are there any issues with the property that may come up with homeowner's insurance? Are there any repairs a lender may require prior to closing?Do they want a fair amount for earnest money and do they want it upfront? What offer forms are you using? What about home warranties? What about seller closing credits? Don't forget prepayables. Have there been past offers on this property? How long have they been trying to sell? Are there any resale value issues? Is it a good investment for resale? Does the municipality require code compliance inspections? Who is responsible for compliance? Does it have an underground fuel tank? What is considered a fixture to the seller vs legally? What are they NOT including with the sale? How long will you write the bump clause for? Will you allow the seller to continue marketing the property? How do you expect the seller to handle any defects - with a credit, escrow or complete before closing? Will you negotiate repairs or expect the seller to take all burden? Do you recognize that there are many ways to work around those issues? What will your lender allow? Are you really good with people and not quick-tempered? That is important when negotiating - it's very easy for people to get offended and it FREQUENTLY troubles deals even when agents are involved. It's a delecate balance between getting the price you want and ticking off the seller - especially when they don't have an agent to guide them and soften the blow of a lower offer. Don't count on n attorney to do this, as they will NOT allow you to assume any liability or give on points - attorneys are great for legal protection but frequently HORRIBLE at negotiating, because they don't have any give. So, you'll have to establish a rapport with the seller. And Buyers often think that a lowball offer will be seen as justified, if only they can give the seller a list of all of the things they see wrong and then the seller will come over to their way of thinking. THAT NEVER WORKS, so don't even try it.

By the way - these are all of the things your buyer agent knows and can do. And she would probably be able to do it for just 2.4%. That investment could put thousands more in your pocket and save you a lot of headache by avoiding common mistakes and roadblocks that could cause you not to get the house at all.

As far as being more motivated to sell your house by getting to sell you a house, too - that's great, but there is only so much she'll be able to do and she should be doing everything possible anyhow. I have a listing right now and I know they'll buy through me once their house sells - but their house is overpriced for the market. I'm marketing it like crazy, they've reduced the price several times, but there are too many foreclosures in their area that buyers can get for much cheaper. There is only so much I can do.

I just sold a property where the sellers are moving out of state, so no selling side for me. They got all of the same, great services and hard work as my sellers who are also buying through me. A good agent does everything for their seller possible, regardless if they are buying through them, too.

Your listing agent would already be motivated to sell your home quickly, because you'll have a bump clause on your offer. If she doesn't sell your house, you can't buy the new house and you'll be back to square one and less motivate to sell, too. The fact that you have an offer on another house will be appealing, because you'll be a motivated seller, price accordingly and be a quick sale for her.
0 votes Thank Flag Link Thu May 7, 2009
Now, let me turn my hypothetical situation into reality. We are interested in a home listed by the owner. I have spoken to a few attorneys and they believe my idea to bypass a buyer's agent is a pretty good idea to avoid the co-broker comission (we estimate this around $8000). Again, we have not had any assistance with an agent in our home search, but we do have an agent chosen to list our house (should happen sometime this month). I was thinking about asking our Agent (who's highly connected in this area of town), what she thinks about this approach. I anticipate if I do so, she will strongly try to convice me to use her as the buying agent (though I could be surprised). THE primary reason I think it may be a good idea to use her as a buying agent, is that I believe it will motivate her to sell our house (which will be a cotingency) faster - in order to collect the double comission. What do you think about all this?

~~~~~~~~~~~~~~~~~~~~
I think the seller is bypassing an agent for the same reason you would like to: because the SELLER would like to save the $8,000 for himself. That’s why he has no agent in the first place: it’s called greed. Or desperation if the seller is close to the line on what he paid/owes, in which case you’re going to get even less of a break.

I am also not surprised by your attorney’s opinion that it’s a good idea to “avoid” having someone work in your best interest although I'm sure they wouldn't advise you not to use an ATTORNEY, LOL. I think you should ask them if they recommend you not using an attorney, that should tell you something. I’m assuming these altruistic attorneys aren’t going to negotiate a deal for you, right? Many attorneys only see the check we collect at closing and have no idea what we do to earn it, and conveniently forget the fact that we split if 4 ways, so they think we’re overpaid.

I also think you should use your agent to negotiate this purchase, because if anyone can sell that contingency clause it will probably be her. When the seller sees how hard she works for you they will know she will be working even harder to sell your house. By the way, good luck with the contingency. I would never allow a client of mine to accept a contingency on the sale of a home not even listed yet, but you’re dealing with a non represented owner so they may accept it. Unless THEY consult with their attorney, who probably won't allow them to. Personally, I wouldn’t think twice of using an agent to broker this purchase: your seller is unarmed, why should you both be?
0 votes Thank Flag Link Thu May 7, 2009
I still think you're leaving yourself unprotected in the buying process, by not having someone represent YOU! Of course the seller's attorney thinks it's a good idea for you to bypass a buyer's agent, because he works for the seller. The reality is...you probably won't see any great benefits from the seller's savings of $8000 on unpaid commissions. In my experience the seller's goal is to pocket that savings himself.

If this is a For Sale By Owner property, having a buyer's agent represent you means that your agent will negotiate for you. Emotions run high between buyer's and seller's. Negotiating under these circumstances can be very difficult. Especially if the seller has an attorney representing him! Don't you deserve the same?

Finding a property and getting an accepted offer is the easy part. Seeing the transaction to closing is a different story. There are many things that could go wrong in the whole process that may kill the deal...problems with home inspections, financing, or deadlines can all become issues. You buyer's agent really earns their commission during this process!

I'm not trying to push buyer's agency on you, I just want to make you aware of the benefits of having someone to represent your interests. As for your selling agent "working harder to sell your house if you use her as your buyer's agent"...I would hope she would work hard to sell your house regardless! That's what you've hired her to do, is sell your house. Basically it comes down to trust. You need to be able to trust 100% in the people who work for you. Whether they're selling your home, or assising you in a purchase.

Good luck to you!
0 votes Thank Flag Link Wed May 6, 2009
I appreciate all your responses - I believe you've cleared things up.

Now, let me turn my hypothetical situation into reality. We are interested in a home listed by the owner. I have spoken to a few attorneys and they believe my idea to bypass a buyer's agent is a pretty good idea to avoid the co-broker comission (we estimate this around $8000). Again, we have not had any assistance with an agent in our home search, but we do have an agent chosen to list our house (should happen sometime this month). I was thinking about asking our Agent (who's highly connected in this area of town), what she thinks about this approach. I anticipate if I do so, she will strongly try to convice me to use her as the buying agent (though I could be surprised). THE primary reason I think it may be a good idea to use her as a buying agent, is that I believe it will motivate her to sell our house (which will be a cotingency) faster - in order to collect the double comission. What do you think about all this?
0 votes Thank Flag Link Wed May 6, 2009
ZMK- You really received some great answers, and I love the discussion back n forth too..it is very "learnable"! LOL

Anyway, you have a great topic, because I just had this happen 4 months ago to one of my customers. His Realtor he had a B Agency agreement with truly in this case, was NOT doing a good job...He had an offer on the table on a foreclosure property, and she didnt handle that situation very well.>however, today, who really is!! :) Anyway, the borrower went out, and found a For Sale by Owner, negotiated the price, and wrote up an offer on it. Wow! ....not good ....because the REALTOR found out about it, and was going to enforce the buyer agency agreement...hence, making him pay her a commission on something she did no work for! I knew this agent, and I got the buyer back in the fold before he got sued! ....anyway, I put the two of them back together and negotiated a peace treaty so to speak...the agent spoke to the FSBO seller, and negotiated a much lower rate of commission. The deal closed, and everyone is happy!

Now, why did I tell you this story...probably because I DO FEEL the Realtor did alot of work prior to the deal and deserved to be paid...And yes, the buyer DID DO the work at finding a property...In his case though, he was VERY NEW to the process, and didnt understand the ramifications...I believe YOU DO, and I respect that..

Ironic thing is that the REALTOR would have probably just let it go...4 years ago....But with times being tight, and the economy the way it is...I am sure that had something to do with it.

Realtors have an excellent value in any transaction, and having a father for a broker/owner in Colorado for 18 years, I not only saw things from the buyers and sellers perspective, my 20 years in lending perspective, but also from the REALTORS perspective!

I think you are GREAT for being so up front and honest about your situation! It would be my priveledge to work with you if you chose me to lend you the money!

Best of luck...

Take care

Darin
One Source Mortgage, LLC
109 1st St
Lodi, Wisconsin 53555
608-592-2227
Darin@osmwi.com
Web Reference: http://activerain.com/krovy
0 votes Thank Flag Link Mon May 4, 2009
Just because an agent has the actual listing with the seller does not necessarily mean that they will negotiate appropriately on your behalf. Remember that the listing agent has a fiduciary responsibility to the seller. Of course if your buyers agent is sending you to open houses on your own then naturally you feel that they are not doing their part; and if that is the case then find yourself a new buyers agent that can give you full representation.

Working with a buyers agent could be very beneficial in your search for a home. Another recommendation is to not attend to many open houses because you are not allowing the agent to contact you in regards to something you are actually looking for. Meaning when you sat with this agent they should have asked you a set of questions that gave them a brief description of what you are looking for. Therefore they should not be calling you to show you just anything which is what is happening when you attend open houses.
Web Reference: http://www.psgrealty.com
0 votes Thank Flag Link Sun May 3, 2009
Kristin, thanks for the clarification.... I defer to your local knowledge.
0 votes Thank Flag Link Sun May 3, 2009
Alan May, Real Estate Pro in Evanston, IL
MVP'08
Contact
Zmk - Thank you for explaining a bit more your relationship with your potential agent. That helps!

I agree with Coleen wholeheartedly about the open house and not being required to sign in if you don't want to. But some sellers want to know who has been in their house, so you may meet with some resistance - I've even heard that some buyers weren't allowed access for refusing to sign in. If you want, you can sign in using your potential agent's name. This does NOT obligate you to that agent, however, it helps protect you against the possible procurring cause issue, if you say your agent sent you, should you decide to use her services. I tell folks who are not quite ready to sign Buyer Agency to use my name at open houses anyhow, just in case they decide they want to use me to buy the house.

Alan - procurring cause CAN be met under many circumstances with an open house in Wisconsin. JUST going to the open house may not be enough, but if that open house agent follows up with the open visitor and can be shown to have been a significant reason the buyer wrote and the other agent didn't even KNOW about the house - well, there you go. Many agents will ask, "How did you find out about the house?" and if the buyer says they saw that agent's ad or sign, that agent will do everything possible to keep the chain of events going to secure procurring cause. The best thing a buyer can say is, "My agent sent me," unless they want to risk being stuck working with an agent they don't know. I think many complaints you hear about agents and buyers result from buyers being "stuck" with an agent that way.

As far as the agent selling their own house - there is no need for dual agency there and I think it's impossible anyhow. As a principal in the transaction, the seller/agent CANNOT represent you in any way. Agents who do not own the property can act as dual agents in a transaction because they are NOT the princiapal ie., buyer or seller. Just have your attorney write up the offer for you. You're the buyer, the agent is the seller, period. There IS no agency.
0 votes Thank Flag Link Sat May 2, 2009
Realtors, when selling their own homes, are required, by the code of ethics, to disclose that they own the home. So you won't have to do any research to determine that the agent is the owner of the home.

And you're presuming that you can save 2.5-3% off the listed price. As an agent, when representing a buyer, I, too, can get you 2.5-3% off the listed price... in fact my track record is more like 6-10% off the listed price. So in my scenario... you would have done better with a buyer's agent.

Also, you can sign in to an open house with or without an agent's name next to yours. You don't have to identify your agent, you can simply put "YES" where it asks the agents name. There is no onus on you, there is no liability, and there is no legality (as to who must represent you, based on how you signed in).

The sole purpose for the sign in sheet, is to show the seller that there were people there... and for the agent who is sitting the open house, to use to call you afterward, to see if you can be converted to a client.

You will not be setting up a "procuring cause" situation, when visiting an open house... it's kind of "no man's land" for the moment. You can visit an open without an agent, and add one after the fact. The agent sitting the open house does not automatically become your agent.
0 votes Thank Flag Link Sat May 2, 2009
Alan May, Real Estate Pro in Evanston, IL
MVP'08
Contact
The buyer wrote the offer, reflecting the subtraction of the amount I would have received and the seller told him that HE was going to keep my share of the commission. THAT is what you can expect by cutting out a real buyer's agent - the seller or the lister expects to keep it, not pass it on the the buyer.
~~~

Exactly, it amazes me that buyers actually believe sellers aren't as greedy as they are, LOL!
0 votes Thank Flag Link Sat May 2, 2009
I go through an open house while driving past a home, go home and do a little research and find out the selling agent is the owner of this home - and is selling for a decent price. Now this selling agent is (presumably) much better off acting as a dual agent.

~~~~~~~~

With logic like that you definitely need your own agent. If I ever sell my own home I hope someone like you comes along. :)
0 votes Thank Flag Link Sat May 2, 2009
OK thank you all. I did a little further research on procuring cause, and it seems like this can be a contentious isssue, but I get the gist of it.

Collen, I suspect some will disagree with you - but I really like your answers. I feel as a cosumer, that I may not know - perhaps until I've left the open house whether or not I want to be represented. Here's a good example: I go through an open house while driving past a home, go home and do a little research and find out the selling agent is the owner of this home - and is selling for a decent price. Now this selling agent is (presumably) much better off acting as a dual agent. In this case my offer (compared with an equal purchase price with a buyer's agent) is looked pretty highly upon. Now I'm sure in this case, some may counter that I - as the "lowly" consumer - needs help and protection, but that's what real estate attorneys and home inspectors are there for too.
0 votes Thank Flag Link Fri May 1, 2009
Do not let anyone intimidate you into signing anything. Do not feel that you have to sign anything under duress. Let me reiterate: if it makes you feel uncomfortable , dont do it. When you sign in "In an open House" go ahead and say you are working with an agent, put "Jane Doe" down, it is nobodys business what your listing agents name is, unless you plan on putting an offer on the house. Then it comes down to who shown you the first time and was responsible or pertinent to the sale of the home. If the agent at the open house had shown it to you, she is responsible for the sale. If your buyers agent was the one, she is responsible. If you lie and say jane doe, well it may come back to bite you. Just be honest, (my motto) tell them you are just looking and dont want to be contacted, period. Until you find someone you can trust and feel comfortable with, this is what I suggest.
0 votes Thank Flag Link Fri May 1, 2009
Zmk,
You are asking what the purpose is as to whether you sign in as yourself, or as being represented by your Buyer's Agent. In Wisconsin, if you walk in to an open house or call an agent to show you a property- that agent could possibly claim that they had "Procuring Cause" should you desire to put an offer on a property that they showed you.
If you, ultimately would want another Realtor to represent your interests as a "Buyer's Agent"- it is possible that the listing agent may declare that they are entitled to the entire commission- and not agree to pay your agent. Now, without getting in to all the details of how this works, it just is more protection for YOU if you have a Buyer's Agency agreement with your Realtor prior to looking at homes.
You may want to discuss all this with the agent that you are considering working with and they can explain the process in more detail.

All the Best to You!
Web Reference: http://GoPackerUp.com
0 votes Thank Flag Link Fri May 1, 2009
Up until this point we are very early in our search, our Agent - whom is going to be our listing agent - will probably be our buying agent. She has not taken us through any houses, or done any other leg work for us - and right now I don't expect her to, nor have we asked her to. Just to be clear its not her fault for doing nothing, we currently dont want anything. So I understand what you're saying about being fair to her, but right now I don't feel like we have any obligation to her. In this priliminary search, we have encountered a couple of scenarios where we feel we could bring a better offer to the seller, and/or save money by not obligating the seller to pay a buyer's agent comission. These scenarios are only on what we feel are outstanding bargains (prior to our "real" search.

So I'm still not clear on what the purpose of signing into an open house as myself or myself c/o my (potential) agent. Can anyone explain that?

And, just so the agents here know, in traditional scenarios - we will plan on using an agent.
0 votes Thank Flag Link Fri May 1, 2009
"she is not the one directing me to the open houses - so I really don't feel she has earned anything "

Just one more point - because this makes me crazy. Is an agent's value only in finding you the house? What about all of the work she did showing you the other houses? Even so, do agents really earn their commission from finding houses? Then why does anyone use them when they can search the internet for listings themselves?

Finding the property is probably the LEAST important part of a buyer agent's worth. Our true value comes out AFTER you find a house. Market analysis, knowledge of resale values, negotiating strategies, knowledge of adverse defects, vision to see potential in a property that other's can't see, knowledge of writing an offer that protects the client's best interests, smoothing the way with lenders, referrals to contractors & inspectors who aren't compromised, etc. Skill, experience, loyalty, knowlewdge - THAT is what I get paid for.

Saying she shouldn't get paid because she technically didn't find the house is like saying a professional painter shouldn't get paid for painting the room, because he didn't pick out the paint color!

Now, on the flip side - why didn't she email you the info on that house long before they even had an open? Are you going into areas or price ranges that you didn't tell her to look originally? (I once had a client tell me they only wanted a Ranch in Fox Point and they called me from an open house to write an offer - it was a Cape Cod in Thiensville! So, of course I wouldn't have thought to tell them about it!)

Anyhow, a good buyer's agent would have that info to you BEFORE there even was an open house, if you're clear about for what and where you are looking.
0 votes Thank Flag Link Fri May 1, 2009
Let's clarify some things here.

First off, if you do not have a signed Buyer Agency agreement, in Wisconsin, that agent does NOT represent you. That agent is a SALESPERSON.

Imagine going into a shoe store and the cl.erk assists you in finding shoes. Even though the clerk is assisting you, you understand that the clerk does not work for you - they work for the store. It's their job to sell you as much as possible and make more money for themselves. Same for real estate professionals working with buyers without an agency agreement.

A buyer agent works for YOU and has to represent your best interests - even putting your interests above their own - this is state agency LAW.

It's a common misconception that working with the listing agent has some magical power influencing the seller. It's just not true. Even if the agent negotiates a lower commission, because they get to keep the commission they would otherwise have to share with a buyer's agent, that savings would be carried over to their client - the seller - before the buyer. (If they don't keep the whole thing for themselves.)

That agent's job is to get the seller the most money and the best terms. If they do anything not in the seller's best interest - like offering a deal to the buyer - they seriously risk their license. The listing agent has no special power to get the buyer a better deal over an offer that would be better in the seller's interests. If they do pressure a seller to take a worse offer and the seller is naive enough to cave, that agent could easily find themselves on the wrong end of a lawsuit. Most likely, a listing agent will be more motivated by the chance to keep the whole commission, but they won't be motivated to give the buyer a deal - they'll be motivated to get the buyer to write the best offer for the SELLER, so the seller accepts the offer. (In rare cases, you may come across a small broker, who may reduce the sellers commission to allow the seller to take a lower offer, but these aren't as common.)

A Buyer Agent doesn't cost the buyer any more than working with a listing agent or a salesperson agent - a buyer's agent gets paid by a cobroke fee - the amount that the listing broker offers as incentive in the MLS.

A GREAT buyer's agent, on the other hand, will know how to write an offer and negotiate for their client and get them the best price and terms. They are motivated to do so by the potential future business they will get through referrals from that happy buyer client.

I had a buyer client get convinced by the seller, behind my back, to get rid of me and he'd get a good deal on the house. The buyer sked me to back off and I did. The buyer wrote the offer, reflecting the subtraction of the amount I would have received and the seller told him that HE was going to keep my share of the commission. THAT is what you can expect by cutting out a real buyer's agent - the seller or the lister expects to keep it, not pass it on the the buyer. My client brought me back in and I was able to get him the price HE wanted, inspite of my commission being there.

There is a difference in Buyer's Agents. Some consider themselves that because they got the buyer to sign the agreement. These agents wouldn't BEGIN to understand representing buyers - they still think like seller agents. A true buyer's agent doeesn't want you to sign the agreement because it binds you to them. They want you to sign because they truly know it is in your best interest and allows them to properly represent you. These agents are usually ABR (Accredited Buyer Representatives.)

You truly didn't have a clear understanding of agency in Wisconsin, because no one has adequately explained it.. I highly recommend you find an ABR and sit down with them, so they can explain it to you fully. It sounds to me that you have only met salespeople or agents who don't understand true buyer agency themselves.
0 votes Thank Flag Link Fri May 1, 2009
This whole procedure seems a little bizzare to me,

~~~~~~~~~

As I explain when I present the agency disclosure, most of what have to tell you is a result of a lawsuit. It may seem bizarre to you, but it is in place to prevent us from being sued because you don’t know whose side we are on. It would be to your benefit to use a buyer’s agent. It would also be really nice, if this agent has shown you many homes, to actually buy your home thru them. Not only will you have someone on your side, but the agent will get paid for all the time they put it.
0 votes Thank Flag Link Fri May 1, 2009
I'm not sure why anyone would NO want to work with a buyer's agent when buying a house. The agent has to work for someone, either the buyer or the seller...If I were the buyer, I'd want that agent looking out for my best interest and negotiating for me!

I do have some buyers who prefer not to sign buyer agency, maybe they just don't totally understand it, but I have no problem working with them. I always explain to them that my loyalties are to the seller even though I may never have met him, and I just spent endless hours with this buyer showing them homes. Obviously, I'm not going to disclose as much to them as I would if I worked as their buyer's agent.

I really don't see the great benefit of working with the selling agent on a listing. They 100% will be looking out for the seller's best interest unless their a dual agent.

If your buyer's agent is not fulfilling her obligation to you, that's a completely different story. You should have been given a list of obligations that are owed to you from your buyer's agent as their "client". If they are not fulfilling those owed duties, they may NOT be earning their commission.

When going to open houses, you should always tell the lsiting agent whether or not you have a buyer's agency with someone. If you're not happy with that agent, by all means discuss it with them. Maybe amending the buyer's agency contract is in order...Be totally honest in what you're trying to accomplish in your home search so both you and your agent are on the same page.

Good luck to you!
0 votes Thank Flag Link Fri May 1, 2009
Let me also clarify, I do truly understand the reasons to use a buyer's agent. But there have been a couple of properties for sale, where we believe it would be in our best financial interest to go through the listing agent - utilizing my attorney to protect me.
0 votes Thank Flag Link Fri May 1, 2009
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