You don't have to work with an "EXCLUSIVE" Buyers agent to be represented as a client by a broker. For example, the firm I work for represents both buyers and sellers but that doesn't mean that if you work with a Coldwell Banker Burnet agent that you will be working with the listing agent. You are entitled to representation other than the listing agent, but that does not mean you need to choose a buyer's only company like Susan's.
I'm sorry Susan, but for someone who is so concerned that Mike gets all of the information before he makes a decision, you really don't tell the whole story.
Moral of the story. Mike you are entitled to work whomever you like and that does not have to be the listing agent.
If the listing agent has fulfilled certain step in the process thus far it is unlikely "your" agent will get paid a commission by the seller (obligating you to pay the commission), but that is how our system of cooperation works. If you do choose an agent ,whether a "buyer's only model" or a "traditional model", be sure to walk them through exactly what you have and have not done thus far. Before you sign a contract with them, tell them that you are concerned about "Procuring Cause" and that you would like a clause in the agency representation agreement exempting you from payment if your agent is not rewarded procuring cause. It may be an issue and it may not but it is something that you should be aware of.
If you should have any questions about what I have brought up here, you are free to contact me, but for the good of the Trulia community it would be best to post your questions back here so the entire community can learn from your situation.
Here is some basic information about these resale units in these complexes:
* 13 Active Listings ranging in price from $79,900 - 219,900 ( 10 range between 900-1300 SF)
* 5 Sold so far in 2008
* Association fees range from $90 - 278 per month
* 2 Active listings ranging in price from $149,000 - 204,900 (both at 900 SF)
* 1 unit sold so far in 2008
* Association fee is $265 per month
* 4 Active listings ranging in price from $139,900 - 209,900 ( 800-900 SF)
* 2 Units sold in 2008
* Association fees range from $271-535 per month
* *** It might be important to note that 3 of the 4 listings are Bank Owned
* 5 Active listings, only one is listed under $200,000 at 895 SF
* the last unit for sale sold in December of 2007
* Association fees range from $400-559 per month
* 5 Active listings for sale, only one under $200,000 at 854 SF
* 6 units have been sold in 2008
* Association fees range from $245-471 per month
A couple things you will have to think about when it comes to condo buying is the square footage you would like for the price. Obviously you know where you stand on that. But something else to look at is the monthly fees charged that go to the condo association. Costs are across the board for these buildings, as I have noted, so you will need to think about what you can afford out of pocket each month. Things covered by these fees might include :
Building Exterior, Hazard Insurance, Outside Maintenance, Professional Management, Sanitation, Snow/Lawn Care, Water/Sewer
And of course, you will want to take into consideration your parking options.
As for resale in the future, right now there is no way to tell what will happen with the condo market in Minneapolis or Saint Paul. Right now there are about 507 condo units for sale in Downtown Minneapolis and in Saint Paul it is 148. That is a lot of units available and a lot of competition. But if you buy for the long term, like at least five years, you might be ok with re-sale. If you plan on selling in two years, then it might be better for you to rent than buy, because I doubt you will make a great return in that small amount of time as you will only be relying on appreciation for increased value. That's a long shot right now.
I hope this helps with your decision, and if you have any questions, feel free to contact me. Good Luck!
Don't get too hung up on what you or someone else thinks the future might hold. Nobody can predict the future and I don't think there is a single Realtor in the business today that hasn't had a wrong impression of where the current market was headed. Buy the condo that best fits your needs and budget today and worry about the sale when the time comes. Something might happen that makes condos worth more than houses in the coming years, the market is far too dynamic for any one person to predict.
St Paul is dead in the nights and on the weekend. They really haven't had a lot of luck reviving lower town like they had wanted. On the flip side every wearhouse in the wearhouse district of Minneapolis is now a "loft" and the market is way over saturated. There should be good deals to be had in both, make sure you work hard to get one of them. Remember that you make money when you buy a house not when you sell it. Drive down to each of the areas today and then on a Wednesday afternoon around 12-1, the differences will become pretty evident to you. From there decide which city you like best and then focus on which building.
While it may seem like I am not really giving any advice, the moral of my story is to stop thinking about resale and start thinking about what you really want in a house. When I can finally get my clients around this corner, many of them find that they already have found the house/condo of their dreams they have just been hesitant for this reason or that to not move forward.
Please let me know if I can be of any further assistance.
As you have noticed, there are a lot of condos on the market. My recommendation would be to view "all" condos.. and don't forget about N.E/St. Anthony Main area. The North Loop is obviously very popular right now as well, and there are some great deals. "Buying right" is the most important variable...even above and beyond what the market will do. Look at "ALL" the inventory, and once you feel like you know the market, start making offers!! Feel free to go to http://www.hutchinsonandsovis.net for all listed properties.
Coldwell Banker Burnet
When a realtor goes over a contract with their buyer that is something they expect and it's not practicing law.
Giving legal advice is, reading a contract with them is not. In my state of New Jersey we are also required to have every contracts 1st page be something called opinion 26 which clearly states that...
The agent is not an attorney and therefore cannot give any legal advice and it is suggested they contact an attorney for any legal advice because a real estate agent is not licensed or authorized to do so and this goes on for a full page repeating the message in various ways so they fully understand and adding the capacity in which the agent is representing the buyer / seller in the transaction which is on other documents as well. (Repetition so its all clear)
I suppose in your state you don't have an attorney review process and therefore knocking agents for going over the contract with their clients is in your best interest as an attorney to represent it as a federal crime because they're taking business away from you? Is that correct? Many states don't use attorney's for closing, I rather they do to avoid the wrath of attorney's wanting their piece of the action personally and DO think they should consult a professional in their respected field for legal advice, home inspections, mortgages, etc, etc..
Are you still in the market to buy a home? Still looking in the North Loop? If so, I would love to see if we can help you out. My office is in the HEART of North Loop, next to twins Stadium. Do you have a realtor yet? If not we have preferred ones we can get you in contact with. I would like to see if I can help you out with a home mortgage. I will try and make this a very easy process. Please let me know how to help out.
MN District Branch Manager
NMLS # 387408
Gold Star Financial Group
I know you're getting inundated with a lot of answers, if you'd like to meet in person, grab a cup of coffee and talk about the condo market in the north loop I'd be more than game.
Give me a call or shoot me an email and let's get you into a home :)
Coldwell Banker Burnet
"The state of Minnesota uses standard forms pertaining to real estate transaction that have been written and approved by the State Forms Committee, which includes real estate attorneys. You really need to have someone go over these forms with you, line by line, until you are absolutely satisfied that you are clear about the rights, obligations and duties of everyone involved. Again, an online discussion is not the place for this. If your Realtor canâ€™t do this to your satisfaction then you should consult with their broker or an attorney."
1. The so-called "standard forms" this poster refers to are the Realtor Association's forms. They are from the trade association who represents the Realtors. They are not standard forms and to call them that is misleading. The Forms Committee he speaks of is again the Realtor's Association's forms committee. It is not a State government committee (as a consumer might infer from that post). There are much better consumer oriented forms available offered by the Minnesota State Bar Association. Those forms don't have another agenda in mind when they were drafted. Attorneys don't have an interest in the outcome of the transaction, Realtors do.
2. Realtors should NEVER be going over forms line by line and their brokers sure better not be doing that either. Real estate licenses allow agents to fill in the blanks. Once they stray from that function they are engaged in the unauthorized practice of law.
Wow, a couple of condo questions sure did open up a messy can of worms here! An online discussion might be an appropriate place for real estate professionals to debate agency, but it is not an appropriate forum for consumers. The state of Minnesota uses standard forms pertaining to real estate transaction that have been written and approved by the State Forms Committee, which includes real estate attorneys. You really need to have someone go over these forms with you, line by line, until you are absolutely satisfied that you are clear about the rights, obligations and duties of everyone involved. Again, an online discussion is not the place for this. If your Realtor canâ€™t do this to your satisfaction then you should consult with their broker or an attorney.
But, thatâ€™s not what Iâ€™m here to talk about.
There are many places to search online for condo listing in the Twin Cities, but in a blatant act of shameless self promotion Iâ€™m going to recommend my website; http://www.GoWithGregg.com. Every Monday I update downtown condo listings for both St. Paul and Minneapolis broken down by price range. This is a quick, easy way to keep your finger on the pulse of the downtown condo market for both cities. If you would like information and my opinion of individual buildings or units, please feel free to contact me directly as I would rather not promote or â€œbashâ€ individual properties here.
As far as square footage goes. I pulled up the downtown condo sales for both cities over the past year and found that for condos that sold for under $250,000;
36% of the Minneapolis units were between 800-1000 finished square feet with 855 square feet falling right in the center of the bell curve.
24% of the St. Paul units were between 800-1000 finished square feet with 934 square feet falling right in the center of the bell curve.
Of course more square footage is usually better at resale time, but unless buyer expectations change drastically in the future 800-1000 square feet should not be an obstacle to selling.
Dual agency, by definition, is the abandonment of a client when they need you most. Dual agency typically involves fraud and manipulation. Not only do most consumers not understand dual agency, but many Realtors don't either.
I am appalled at the lack of respect for Mike and the misleading legal advice provided by Mr. Piper.
For the record, I am a real estate attorney and Executive Director of a Real Estate Consumer Organization.
Let me know when you are back in the states. I will have a historic condo on the market that might appeal to you, one that has always been a condo (not a conversion). It is always good to take a look at some of the older buildings as well, to get an idea of what is best for you...a new condo development, or an older one with some renovated units.
Anyway, I didn't mean to cause arguments amongst any of you. I will probably look to find an agent to work with when I return to the States. I am on an overseas assignment which is why I am doing a lot of groundwork on the internet before I get back and really start looking. I was just trying to get some general feedback and feel of what's out there - builder quality, good locations, good associations, things to stay away from...etc. I have a general idea of what I'm looking for and I found some units on the MLS listings which is why I posted the initial question. I was really just hoping to get feedback on those and maybe some other suggestions of similar properties with listings in my range.
Seems like a lot of real estate professionals arguing amongst themselves about procuring cause. Perhaps we should get down to business and actually finding you a condo. Attached is a link to my website where you can view a condo I have in the Downtown Area listed (once on the website, go to properties, then featured properties). It is one of my own properties and I have it listed for $192,500. Being that you do not have an agent, I would sell it to you for $185,000. My wife and I bought it 2 years ago for $215,000 but with the current market are unloading it for a lot less. Someday, the market will re-adjust and the value of the condo will go back up. It was just built in 2005 and has underground parking, a workout facility and a nice party room.
Let me know if you would be interested in viewing it
SKY Sotheby's International Realty
Since you don't know how I relate to my clients, you would have no way of knowing that I am whole heartedly committed to building ongoing relationships with my clients. I have already worked with the same clients 2 and 3 times for home purchases. It's just that my clients find the single agency representation I provide to be of value to them. There's nothing wrong with dual agency if it's properly disclosed from the beginning so the client is not misled. I realize that the more traditional real estate process is more wide spread. I have great respect for my colleagues who conduct their business this way. I refer all of my buyers who become sellers to dual agents that I respect and have had successful dealings with to make sure they have an agent who is conscientious. If you are truly in the business of building relationships with your clients, then we have that in common, so no need to make it adversarial where it doesn't have to be. I respect you for what you do, so I hope I can expect the same from my colleagues in the real estate community at large.
Procuring cause can be a complicated issued, but from my experience, it is usually easy to discover who is the procuring cause very quickly. Going deep into it is not needed for this question, as it is not the main subject of this string...thus the reason for my simplification. but you are correct, it can be a heated and in depth argument for those involved in a dispute.
Thanks for the support on procuring cause. I would encourage you to not oversimplify things though. The agent that writes the offer is not automaticaly entitled to procuring cause, the decision making process is far more dynamic than that. I would encourage you to take a look at the arbitration panel guidelines as published by NAR, you will see that the panel (of which I have been a part of) has far more flex in how they decide the dispute. I do think that it is important for a buyer to be aware of it, becuase they obligate themselves in a written contract to pay the commission if the seller's broker doesn't. In Mike's case we are talking about $5K-6K which would be a big deal.
Great point about the faciliator relationship. I was operating under the assumption that without a contract the buyer was okay with no representation, but we all know what they say about one who assumes.
I wholeheartedly agree that a buyer first needs to select an agent and then find the house.
I can't help but respectfully disagree with you about Dual Agency. In my opinion the premis of your argument reduces the real estate relationship to a real estate transaction. The first advice that I give to anyone, whether on Trulia or elsewhere, is to find an agent you can trust and get along with. If that is first and foremost in a consumer's mind then they won't seek the services of an agent who can only provide help to them in half of the real estate transactions in their life. I'm sorry by my buyer's are just as concerned that I am able to help when they sell someday as my sellers are concerned that I will be able to help them when they sell their house and they are a buyer. I choose to build my business on relationships and you choose to do transactions. Neither is right, it is just a different way of doing business.
Dual Agency is a very common and well established practice in the real estate fiduciary relationship. I'm sorry, but lest we all forget that dual agency is what allows exclusive buyer agency to exist. It wasn't too long ago that everyone worked only for the seller and owed all resonsibilities to them, regardless of who you were "working" with. Be careful in how critical you are of the concept, I would hate to see it disapear and leave you without a job.
I have to agree with Cameron, procuring cause is important. There are many buyers who go out and look at open houses to get a feel for what they like, without their agent. If the agent in that home/condo starts to send you info, call you, etc, then they could have a case for "implied" agency. However, honestly, this really should not be worried about by the buyer. If you have an agent representing you, just tell anyone you come in contact with that you are being represented, that will solve the issue right there. From my experience with procuring cause, the agent that actually brings about the sale of the home is the one usually rewarded procuring cause. In cases I know about, if the agent brings about an offer through consultation with the buyer, etc, then they are the procuring agent. Just because an agent that sits in a condo/home tells you a few things about the unit, DOES NOT mean they are procuring cause.
For Sale by Owner:
Many times a FSBO will discount their home without the listing agent fee included. So when you go to negotiate, the asking price reflects that. Many FSBOS don't offer a buyer's agent fee so it has to be negotiated into the deal anyway. If you went to a FSBO by yourself, I don't know any seller who is going to give you the agent's fee, but you can negotiate a lower selling price no matter what.
Written buyer's agent contract:
I am constantly amazed by the amount of agents who say that in MN you do not have to enter into a contract to be represented by a buyer's agent. Actually, the state of MN law says that if you want to be represented, then you MUST enter into a written contract with that agent or else you will not be represented. In fact, with no contract, the agent will treat you only as a customer, not a client, and they will owe you no fiduciary duties except confidentiality. In MN this is called a Facilitator. A Facilitator does not have to be loyal to you, obey any of your requests, account for funds, honor disclosure, etc.
Now, yes, in other states, this is not the case. In Florida, where I am also licensed, it is not law to enter into a written agreement, but you do have to sign a agency form agreeing to the type of representation you have between the parties.
Websites about Builders:
The only website I know that is popular for people to leave good and bad comments about contractors and builders is Angie's List. Maybe you can check that out for people's opinions about builders in the area?
While we are playing devils advocate I want to take this time to dispell a couple of myths that surround hiring a buyer's agent for you just in case you carried a misconception about what they do and what they cost. I also want to encourage you that your argument is a very common misconception. I have thrown another one into the mix just for fun.
1. Some people think that doing the work without an agent will give them the ability to negotiate out of the seller the fee for the buyer's agent. This concept is false. The listing agent's commission is protected by a written contract and as such there is nothing forcing the agent to give up any amount of commission because the buyer came in unattached. Buyer's, whether they do some reasearch and find their home or not, are not professionals. There is a lot to do after the house is "sold" and before it closes and since the buyer isn't a pro, they will need assistance throughout. The listing agent can fill that role by default (if you find the house on your own) or you can hire someone else to do it for you before you go looking. Either way, someone will be paid for holding the buyer's hand from contract to closing.
If you were the listing agent and you felt like kicking in some commission to make the deal come together, would you give that break to the sellers, with whom you have an existing relationship, or the buyer who you just met? My money would be on the sellers.
2. A buyer's agent will cost me money. Mostly False. The buyers agent will be paid by the seller. There is a fee that will be charged by your agent that won't be paid by the seller and it is called a broker admin fee. Please keep in mind that regardless of whether of not you choose your own agent or work with the seller's agent, that fee will be charged to you, so it is a wash in either case.
I'm sorry that I assumed that you had visited some opens, that is a lesson for me. Generally, people who have narrowed down their search to a couple of buildings have already visited them. Here's to not assuming. That said, I wouldn't worry to much about prucuring cause then. If you haven't contacted any seller's agents then there will be no problems for you.
Does that help with understandings?
So here's another question - let's take "For Sale by Owner" for example. The benefit for the seller is he doesn't have to pay a seller's agent fee correct? So if I went to open houses or just worked with the selling agent myself, or "Buying by Buyer" shouldn't I be entitled to the Buyer's agent fees or can I work on a lower selling price, using the fact that there is no buyer's agent fee as leverage?
Don't get me wrong, I am all about having a buying agent and feel they deserve every bit of the commission on the sale - I am just playing devil's advocate and challenging the selling agent's right to all of the commission.
I am starting to feel like the bad guy jumping in to disagree with the other agents here. It kind of makes me look like the naysayer, but you asked so I will clarify.
Scottâ€™s statement that â€œyou do not need to signâ€ (a contract?) â€œand/or compensate your buyer's agent in Minnesotaâ€ while technically correct, will be very misleading to the majority of the public. Scott is correct that there is no law that says you have to sign a contract for representation to buy a house, but it really fails when put to practice in the real world. Most agents donâ€™t work for free (at least if they can help it) and since signing a contract is the only way to get paid, Scottâ€™s statement is very misleading.
Whether you sign a contract at the time of the offer or you select an agent to work exclusively with ahead of time, 99% of the time you will be asked to sign an exclusive right to represent buyer contract with the agent. While not mandatory, few agents or brokers will do any work without one. In the end this is the document that entitles the agent to collect payment for the work that they do. Without it they are hoping that all the cards fall into place and they get a paycheck after the dust settles. Look at it this way, the agent that helps you find the unit, write the contract, etc. is going to want to get paid for their effort. Without the representation agreement they have no entitlement to payment.
In MN (as with most states I would venture to guess) the representation contract states that as a buyer you will pay X fixed dollars or X percent of the sales price to the broker for their representation of you, and that if the sellerâ€™s broker pays the buyerâ€™s broker, that amount may or may not reduce your obligation to pay said amount. Iâ€™ll break that down a bit more for you:
1. The buyer signs an agreement stating that they will pay an amount for a service (seems fair)
2. The buyer authorizes the agent to negotiate and receive a fee paid by the sellerâ€™s broker
3. That fee will or will not reduce the buyer obligation to pay said fee (make sure you agent checks â€œshallâ€ on line #43 of the buyer representation agreement)
4. If they check shall, that means whatever they receive from the seller will reduce your obligation to pay them. So if they receive 2.7% and you agreed to pay 2.7% then you donâ€™t owe them anything.
5. 2.7% is a very standard number for buyerâ€™s agentâ€™s to receive in MN on the buyerâ€™s side of the transaction. I would be very leery of any agent that asks you to pay more in their contract.
Because the contract normally reads that whatever the sellerâ€™s broker pays the buyerâ€™s broker will reduce the buyerâ€™s liability, you must be careful of those times when the sellerâ€™s broker doesnâ€™t pay the buyerâ€™s broker. I was also a little shocked to read Scott comments that you shouldnâ€™t worry about Procuring Cause. While this is generally something left up to the agents to figure out, if you read the MAR (MN Association of Realtors) approved buyer contract it says: (lines 50-54)
CAUTION: BUYERâ€™S ACTIONS IN LOCATING A PROPERTY MAY AFFECT PAYMENT OF COMPENSATION BY SELLER(S) AND MAY THEREFORE OBLIGATE BUYER TO PAY ALL OR PART OF THE COMPENSATION IN CASH AT CLOSING. FOR EXAMPLE: THE ACT OF GOING THROUGH AN OPEN HOUSE UNACCOMPANIED BY YOUR AGENT OR SIGNING A PURCHASE AGREEMENT THROUGH ANOTHER AGENT OR WITH OWNER (FOR SALE BY OWNER), MAY REQUIRE YOUR PAYMENT OF THE FULL COMPENSATION TO YOUR BROKER
I donâ€™t know what Scott is talking about but Procuring Cause is so important to buyerâ€™s that MAR thought it was prudent to take up 5 lines of a 103 line form to warn buyers about it.
The essence of Procuring Cause is this; whoever does the work gets the paycheck. If the listing agent was the person who introduced you to the property and got you started down the road of purchasing unit #123 at XYZ building then they should be rewarded for having done the work of the sale. Remember that a buyer is entitled to representation from any agent they want at any time but the services are only â€œfreeâ€ if the buyerâ€™s agent truly does hold procuring cause.
Fortunately or unfortunately there is no finite answer to who holds Procuring Cause in a transaction so I really canâ€™t give you a definite answer in this forum. My strongest advice would be to select an agent now, stop visiting open houses/models, and start working directly with your agent to find the right condo for you. Why not, they do all of the work and there fee WILL MOST LIKELY BE covered by the sellerâ€™s broker anyway.
If you end up buying a condo from a building you already visited on your own, I would insist that your agent call the listing agent and get something in writing from the listing them stating that procuring cause will not be an issue. Failing that, you may be obligated to pay your realtor out of your own pocket like the MAR representation agreement says. This is why I said you should get an exemption to the contract for procuring cause, because if the sellerâ€™s broker doesnâ€™t pay, your agent could ask you to perform on your agreement to pay them.
I hope that makes sense, do let us know if you have any more questions.
It looks as though the conversation has diverted its attention, but to answer your question, if you "buy right", I truly believe you will be happy with what the market will bare in the future. With that said, look at a lot of units, and place many offers....and MOST IMPORTANTLY, wait until you get that "right unit" at the "right price". I would not worry about procuring cause for agent compensation; however, I would highly suggest working with a realtor that will help you on the buying end...and to answer your question, you do not need to sign and/or compensate your buyer's agent in Minnesota. If you want any other specific developments, please feel free to contact me :)
Jennifer - Thanks for the general breakdown of all the buildings, I was working on something similar for myself but obviously it takes me longer than it takes you. Do you know of any other listings/buildings that would be good for me to look at? I don't mind the peace and quiet of St. Paul, and if I live in Minneapolis, I'd like to be near shops, markets, cafes, bars, etc...
Cameron - Thanks for both of your responses. I'm a little confused about the listing and buying agent topic. You stated:
"If the listing agent has fulfilled certain step in the process thus far it is unlikely "your" agent will get paid a commission by the seller (obligating you to pay the commission), but that is how our system of cooperation works."
How do I know if the listing agent has fulfilled a certain step? What is the certain step?
You also talked about signing a contract with my agent if I chose one. Is this common. I know when I bought a house in TX a few years ago, I never had a contract with my agent.
Thanks again - this is good information. I always thought as a buyer, I was never obligated to pay agent fees and it solely rests on the seller but maybe this is not always the case. I assume it's probably more complicated with condo sales than homes but maybe not.
P.S. Keep the good feedback coming!
It would be in your best interests to talk to an EXCLUSIVE buyer agent. That's what our company does. We ONLY ever represent buyers. Read this article about condo buying in Minneapolis and St. Paul where my company and I are mentioned, and you'll see why it's important to at least give me a call to ask your questions.
It's of value to buyers that they don't have to deal directly with the same agent who represents the seller.
See my website to know why it's essential for you to know that BEFORE you go in and talk to the agents that are advertising the property. They might think you want them to represent you, too, and they will not be able to provide you with a full level of services.