Home Buying in 90401>Question Details

David Loeb, Home Buyer in Santa Monica, CA

Is there an agent in Los Angeles who is worth the commission?

Asked by David Loeb, Santa Monica, CA Sun Feb 22, 2009

I'm looking at Santa Monica & LA properties in the low seven figures. I'm finding the houses I want and thanks to the internet it's not hard to determine how much to offer. So would someone please tell me what the agent will do to justify 20 - 30K or more. I figure filling out the paperwork is worth about 1/10 of that, TOPS. And don't tell me the seller is paying as the seller will be getting the funds from me. I'm open to working with an agent who can convince me they offer good value, otherwise I'm going to try it on my own.

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SERGEY FEDNOV *** 424-777-9377’s answer
Hope info below will answer your question.


____________________

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Sergey Fednov

President - Realtor®
- Trust Sale Realty -

Residential & Commercial Real Estate
_______________________________
Toll Free: 1-855-TRUST-55
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Phone: 424-777-9377
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2 votes Thank Flag Link Fri Apr 27, 2012
Hi David - Great question. A good buyers agent can and will help you with:

Preparing the initial offer (there are 32 signatures required on that paperwork alone) along with proof of funds and a preapproval letter. In this market it is not uncommon to go through three of four counters before getting to the final deal.

Once the offer is accepted they would:
Recommend great inspectors for the home (general, sewer, chimney, roof).
Coordinate timing for all inspections.
Negotiate the escorw company fees on your behalf.
Negotiate the repair request.
Review your title and get any unresolved issues answered prior to contingencies being released.
Negotiate with your lender to give you a promissory note before you release your loan contingency.
Make sure the seller has given you all disclosures and that you understand the potential issues with the home.

All of this is done within a 30 day timeframe and if the agent is good you will know what you are buying and feel good about it.

I'd be happy to discuss in more detail. My previous buyers would be happy to tell you their experience with the buying process and how important a good agent was to them.

Sandy Miller
7 votes Thank Flag Link Thu Feb 26, 2009
Then do it unrepresented and let the listing agent get the money. I don't know what benefit that would be to you but its your choice.

I am not in your area but would not help anyone who would want me to beg for their business.
4 votes Thank Flag Link Sun Feb 22, 2009
Tracking the loan process
1. Add lender and other vendors to transaction management program so agents, buyer and seller can track progress of sale
2. Contact lender periodically to ensure processing is on track
3. Relay final approval of buyer's loan application to seller

Home Inspection
1. Coordinate buyer's professional home inspection with seller
2. Review home inspector's report
3. Enter completion into transaction management tracking software program
4. Recommend or assist seller with identifying and negotiating with trustworthy contractors to perform any required repairs

The Appraisal
1. Schedule appraisal
2. Provide comparable sales used in market pricing to appraiser
3. Follow-up on appraisal
4. Enter completion into transaction management program

Closing Preparations and Duties
1. Coordinate closing process with buyer's agent and lender
2. Update closing forms and files
3. Ensure all parties have forms and information needed to close the sale
4. Confirm closing date and time and notify all parties
5. Work with buyer's agent in scheduling and conducting buyer's final walk through prior to closing
6. Request copy of closing documents from closing agent
7. Assist seller in providing homeowner's warranty, if applicable
8. Review closing documents carefully
9. Coordinate this closing with seller's next purchase and resolve any timing problems
10. Refer sellers to three of the best agents at their destination, if applicable
11. Change MLS status to "sold." Enter sale date, price, selling broker and agent's ID numbers, etc.
12. Close out listing in transaction management program


Follow-Up After Closing
1. Answer questions about filing claims with homeowner warranty company, if applicable
2. Attempt to clarify and resolve disputes about repairs if buyer is not satisfied
3. Respond to any follow-up calls and provide additional information required from office files, if appropriate.
3 votes Thank Flag Link Fri Apr 27, 2012
Entering Property in Multiple Listing Service Database
1. Prepare MLS profile sheet
2. Enter property data from profile sheet into MLS listing database
3. Proofread MLS database listing for accuracy
4. Add property to company's active listings list
5. Provide seller with MLS profile sheet data form
6. Take photos for upload into MLS and use in flyers

Marketing the Listing
1. Create print and Internet ads
2. Coordinate showings with owners, tenants and other REALTORS®
3. Return all calls, including nights and weekends
4. Install electronic lock box if authorized by owner.
5. Prepare mailing and contact list
6. Generate mail-merge letters to contact list
7. Order "just listed" labels and reports
8. Prepare flyers and feedback faxes
9. Review comparable MLS listings regularly to ensure property remains competitive in price, terms, conditions and availability
10. Prepare property marketing brochure
11. Arrange for printing or copying of supply of marketing brochures or flyers
12. Place marketing brochures in all company agent mailboxes
13. Upload listing to company and agent Internet site, if applicable
14. Mail out "just listed" notice to all neighborhood residents
15.Provide marketing data to prospective buyers
16. Provide "special feature" cards for marketing, if applicable
17. Submit ads to company's participating Internet real estate sites
18. Convey price changes promptly to MLS and all Internet groups
19. Reprint/supply brochures promptly as needed
20. Send feedback e-mails/faxes to buyers' agents after showings
21. Discuss feedback with seller to determine if changes will accelerate the sale
22. Place regular weekly update calls to seller to discuss marketing and pricing

The Offer and Contract
1. Receive and review all offer to purchase contracts submitted by buyers or buyers' agents
2. Evaluate offers and prepare a "net sheet" on each for the owner for comparison purposes
3. Counsel seller on offers. Explain merits and weakness of each offer.
4. Contact buyers' agents to review buyer's qualifications and discuss offer
5. Fax/deliver seller's disclosure to buyer's agent or buyer upon request
6. Obtain pre-qualification letter from buyer
7. Negotiate offers on seller's behalf, setting time limit for loan contingency
8. Prepare and convey any counter offers, acceptance or amendments to buyer's agent
9. Provide copies of contract and all addenda to escrow
10. When offer to purchase is accepted and signed by seller, deliver to buyer's agent
11. Record and deposit buyer's earnest money into escrow
12. Deliver copies of fully signed purchase contract to seller
13. Deliver copies of purchase contract to selling agent
14. Provide copies of signed purchase contract for office file
15. Advise seller in handling additional offers to purchase submitted between contract and closing
16. Change status in MLS to "sale pending"
17. Update transaction management program to show "sale pending"
18. Provide income and credit information to seller if property will be seller-financed
19. Assist buyer with obtaining financing, if applicable, and follow-up as necessary
20. Coordinate with lender on loan lock-in
21. Order septic system inspection, if applicable
22. Receive and review septic system report, if applicable
23. Verify mold inspection ordered, if applicable
24. Verify mold inspection ordered, if required
3 votes Thank Flag Link Fri Apr 27, 2012
LIST OF 114 TASKS THAT REQUIRED IN TYPICAL REAL ESTATE TRANSACTION

Pre-Listing Activitiess
1. Make appointment with seller for listing presentation
2. Send seller a written or e-mail confirmation of listing appointment an call to confirm
3. Research comparable currently listed properties
4. Research sales activity in the neighborhood
5. Research "average days on market" for property of this type, price range and location
6. Review property tax roll information
7. Prepare "comparable market analysis" (CMA) to help establish fair market value
8. Prepare listing presentation package
9. Perform exterior curb appeal assessment of property
10. Compile and assemble file on property
11. Review listing appointment checklist to ensure all steps and actions have been completed

Listing Appointment Presentation
1. Give seller an overview of current market conditions and projections
2. Review agent's and company's credentials and accomplishments in the market
3. Present company's profile and position or "niche" in the marketplace
4. Present CMA results to seller, including comparables, sold, current listings and expired
5. Offer pricing strategy based on professional judgment and interpretation of current market conditions
6. Discuss goals with seller to market effectively
7. Explain market power and benefits of Multiple Listing Service
8. Explain market power of Web marketing, IDX and REALTOR.com
9. Explain the work the brokerage and agent do behind the scenes and the agent's availability on weekends
10. Explain the agent's role in taking calls to screen for qualified buyers and protect seller from curiosity seekers
11. Present and discuss strategic marketing plan
12. Explain different agency relationships and determine seller's preference
13. Go over residential listing agreement

Once Property is Under Listing Agreement
1. Review title information, if appropriate
2. Discuss possible buyer financing alternatives and options with seller
3. Identify homeowner association manager, if applicable
4. Verify homeowner association fees
5. Verify security system, current term of service and whether owned or leased
6. Ascertain need for lead-based paint disclosure and other disclosures
7. Prepare detailed list of property amenities and assess market impact
8. Explain benefits of homeowner warranty to seller
9. Have extra key made for lockbox, if needed
10. Verify if property has rental units involved. If so:
* Make copies of all leases for retention in listing file
* Inform tenants of listing and discuss how showings will be handled
11. Arrange for installation of yard sign
12. Assist seller with completion of seller's disclosure forms
13. Complete new listing checklist
14. Review results of curb appeal assessment with seller and provide suggestions to improve salability
15. Review results of interior decor assessment and suggest changes to shorten time on market
16. Load listing into transaction management software program

Entering Property in Multiple Listing Service Database
1. Prepare MLS profile sheet
2. Enter property data from profile sheet into MLS listing database
3. Proofread MLS database listing for accuracy
4. Add property to company's active listings list
5. Provide seller with MLS profile sheet data form
6. Take photos for upload into MLS and use in flyers
3 votes Thank Flag Link Fri Apr 27, 2012
Framing the question as it is, the answer is likely to be "No" to the poster.

And as for commission, by contract the Seller is paying the same commission regardless of whether you represent yourself or have an agent represent you, so it doesn't save you anything *not* to have an agent on your side.

As for myself, I pride myself on giving my Buyers pros and cons of every property they're considering and I usually spot things they hadn't considered that feed into both current sales price and appreciation down the line. And in fact, three times in my career I've talked Buyers out of writing an offer they wanted to write because I thought they were making a mistake and in each instance they were happier that they waited for a better property.

Going through the process as a non-professional, you may be able to spot some "wrong answers." I'll spot more, if they exist, and it's virtually certain that in comparison you'll miss some of the "right questions" that come into play.

You're right...filling out the paperwork isn't worth $20K to $30K more. But understanding some of the implications of the way an offer is written and presented is worth a fair piece of change. And knowing how to sell an offer is worth another piece of change.

Right now I'm working with a Seller who is looking to sell and move up. I sold him the townhouse eight years ago. Why did he come back to me? Trust and appreciation for my expertise. The husband has Ph.D. and national reputation in his field...but he knows what he knows and knows what he doesn't know.

Caveat emptor.


Jim Brunet,
RE/MAX Westside Properties
(310) 508-6878
http://www.SantaMonicaHomes.net
2 votes Thank Flag Link Sun Feb 22, 2009
...Per the listing contract, the Seller agree's to pay from the proceeds the Broker they have hired a commission of "X." As Seller's agents, we list the homes on the MLS and offer to share a portion of our commission with the agent who brings us a ready and willing buyer. This money comes from the Seller's proceeds of the sale so yes, the money is coming from you but that money came from the Seller when they bought and so on. So, depending on how you look at it, its up to you but I can promise you this, statistics have shown that buyers and seller's who represent themselves end up costing themselves more money than if they had hired an agent. Not to mention, commissions may be tax deductible. Check with your accountant.

Hope this helps you. If you are looking in the 7 figures, I'm surprised you do not have an agent being that you do not have access to the most current information. There is up to a 30 day delay on some sites for listings that may be sold by the time you are notified.

Good luck with your search. Doing it on your own, you're gonna need it.
1 vote Thank Flag Link Tue Jun 23, 2009
An accepted offer is the start of the process, not the end of the process.
Once you get into deeper the home buying process, you will appeciate having an expert on your team.

best,

Jodi Summers
The SoCal Investment Real Estate Group
Sotheby’s International Realty
310. 392.1211
fax: 310. 392.1001
jodi@jodisummers.com
http://www.SantaMonicaLandmarks.com
http://www.SantaMonicaPropertyBlog.com
http://www.SoCalMultiUnitRealEstateBlog.com
**
There are only two ways to live your life. One is as though nothing is a miracle. The other is as though everything is a miracle. - Albert Einstein
1 vote Thank Flag Link Sun Feb 22, 2009
Dear David,

As a buyer, you would not need to pay the commission, I'm sure you knew this. But I understand your concern to hire an agent that earns his or her commission. Most sellers and agents representing the seller, especially in the high-end market would prefer to enter into contract with a professional licensed agent like myself to protect themselves from liability. On my own listings, I prefer to work with another professional agent, and not with the buyer directly.

So, the comparison I like to mention to my prospective client is, just like with another professional such as a physician, an attorney, a CPA, etc, you hire them for their knowledge, experience and service. It is no different in real estate.

I'd be happy to earn your business and confidence in my services. Please feel free to contact me directly. I'd be happy to explain why my clients from the most prestigious financial institutions to the regular seller have chosen me to represent me. I know real estate and I know Santa Monica. I've resided in Santa Monica for over 25 yeas and my children attend the local schools.

Looking forward to hearing from you,
Elizabeth Sorgen
310-469-0500
0 votes Thank Flag Link Wed Mar 7, 2012
A buyer agent is paid at the closing on your new home by the seller of the property out of their profits.

Commission is included in the asking price for the property by the seller. It is an amount ageed to by the seller, and the listing agent. It is a negotiable percentage determined between the Seller and Listing Agent. In other words, the seller makes the decision on what to pay the agents for selling his home.
Commissions are paid at closing (typically 50% to the real estate office that lists the property and works for theSeller, and 50% to the real estate office that brings and represents the Buyer).
Commissions are paid out of the proceeds of the transaction from the total purchase price.

The seller does get payment from you, in exchange for the property.. You now own the property.

What the seller does with that money, that now belongs to him..is pay commissions out of it. His profit is less on the sale because He chooses to pay the agents for their time.
0 votes Thank Flag Link Tue Jul 14, 2009
Hello David,

I appreciate your concern in trying to determine if you should hire someone to work for you, or try to save the commission and take on the task yourself.

In trying to determine why you should use a real estate professional, here is a message I found on the
NAR website. I thought it might interest you.

Only about half of all real estate agents are REALTORS® -- who work independently, for small agencies, or for large brokerages. They help people buy and sell residential or commercial properties, vacation homes, and land; they conduct appraisals; they operate in the United States and in other countries; some specialize in auctions; and others are buyer's representatives.

Here are 12 ways a REALTOR® will make your home buying or selling experience better.

All real estate licensees are not the same. Only real estate licensees who are members of the NATIONAL ASSOCIATION OF REALTORS® are properly called REALTORS®.
REALTORS® are committed to treat all parties to a transaction honestly. REALTORS® subscribe to a strict code of ethics and are expected to maintain a higher level of knowledge of the process of buying and selling real estate.

Real estate transactions involve one of the biggest financial investments most people experience in their lifetime. Transactions today usually exceed $100,000. If you had a $100,000 income tax problem, would you attempt to deal with it without the help of a CPA? If you had a $100,000 legal question, would you deal with it without the help of an attorney? Considering the small upside cost and the large downside risk, it would be foolish to consider a deal in real estate without the professional assistance of a REALTOR®.

But if you're still not convinced of the value of a REALTOR®, here are a dozen more reasons to use one:

1. Your REALTOR® can help you determine your buying power -- that is, your financial reserves plus your borrowing capacity. If you give a REALTOR® some basic information about your available savings, income and current debt, he or she can refer you to lenders best qualified to help you. Most lenders -- banks and mortgage companies -- offer limited choices.
2. Your REALTOR® has many resources to assist you in your home search. Sometimes the property you are seeking is available but not actively advertised in the market, and it will take some investigation by your agent to find all available properties.
3. Your REALTOR® can assist you in the selection process by providing objective information about each property. Agents who are REALTORS® have access to a variety of informational resources such as local community information on utilities, zoning. schools, etc. There are two things you'll want to know. First, will the property provide the environment I want for a home or investment? Second, will the property have resale value when I am ready to sell?
4. Your REALTOR® can help you negotiate. There are myriad negotiating factors, including but not limited to price, financing, terms, date of possession and often the inclusion or exclusion of repairs and furnishings or equipment. The purchase agreement should provide a period of time for you to complete appropriate inspections and investigations of the property before you are bound to complete the purchase. Your agent can advise you as to which investigations and inspections are recommended or required.
5. Your REALTOR® provides due diligence during the evaluation of the property. Depending on the area and property, this could include inspections for termites, dry rot, asbestos, faulty structure, roof condition, septic tank and well tests, just to name a few.

6. Your REALTOR® can help you in understanding different financing options and in identifying qualified lenders.
7. Your REALTOR® can guide you through the closing process and make sure everything flows together smoothly.
8. When selling your home, your REALTOR® can give you up-to-date information on what is happening in the marketplace and the price, financing, terms and condition of competing properties.

9. Your REALTOR® markets your property to other real estate agents and the public.
10. Your REALTOR® will know when, where and how to advertise your property. There is a misconception that advertising sells real estate. The NATIONAL ASSOCIATION OF REALTORS® studies show that 82% of real estate sales are the result of agent contacts through previous clients, referrals, friends, family and personal contacts.
11. Your REALTOR® can help you objectively evaluate every buyer's proposal without compromising your marketing position. This initial agreement is only the beginning of a process of appraisals, inspections and financing -- a lot of possible pitfalls. Your REALTOR® can help you write a legally binding, win-win agreement that will be more likely to make it through the process.
12. Your REALTOR® can help close the sale of your home.
0 votes Thank Flag Link Tue Jun 23, 2009
Just get a lawyer to help you with the final details on making and closing the offer. Maybe $2,500 and they will be able to handle all.
0 votes Thank Flag Link Thu Feb 26, 2009
David,

Escrow officers do a lot of the paperwork for Realtors and may help you navigate through the paperwork. There are many more Realtors that will agree to ala carte services. This is a challenging time for most Realtors. Treat them kindly and honestly. Get a professional home inspection to learn if the listing price adequately defines the condition of the home.
0 votes Thank Flag Link Sun Feb 22, 2009
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