Buyers' agents get nothing if there is no sale, so they want their clients to buy no matter how bad the deal is,
Theace, maybe thats what you do with you're clients, or do you call them customers. You say you are a real estate pro, but you only spend a few hours to help a client buy or sell a house? Boy, not much of a pro are you? When you understand what professionalism means, then you can come back and post. In the mean time I would keep my opinions to myself, until you get an education.
The answer to the first question is in two parts. I believe that someone already suggested that you ask for a referral from your acquaintances. This often works out well. Thereafter you need to decide whether you truly feel good about entering into a buyer agency agreement with that agent. It is a legal agreement, and binds you to that agent for the term of the agreement. Everything about it is negotiable though, including any fee the agent may request.
There is another theory about selecting an agent to which I subscribe. Someone who is new to the business is likely to serve you as well as any experienced agent. The difference between the experience of a new agent and an "old" pro is usually more than put into balance by the help and advice a new agent can get from their broker, office manager and fellow associates.
The laws related to agency and whether an agent can obtain a fee from a buyer likely differ from state to state, so there is no pat answer for either of your other two questions. I imagine though that an agent is likely to be allowed to ask for a fee. Whether they can collect the fee up-front or at closing is another matter.
What they may charge will depend on what the agent thinks his/her services are worth. Typically, the charge should be no more than what the agent thinks it will cost to serve your needs if they request an up-front payment.
My daughter and her husband are buying their first home, and I advised her to enter into a buyer agency agreement. Their agent asked for $225 to take them on, and my daughter called to ask about it. I do not charge my buyers, but saw nothing untoward about the fee, and replied that it seemed reasonable. I'll be sending her a check to cover it, in addition to other financial aid they may need.
Remember though that, like any legal agreement, the terms of the buyer's representation agreement are negotiable.
And like I stated in a previous post, the Seller, the Sellers agent and your own agent are Not working for your interest they are working for there own. They all have a vested interest to get you to over pay for a property in order to fatten there commissions.
So I are you saying, that all of the teachers that are now realtors, which are many, earn less money than someone who dropped out of high school? Interesting, you know in California, I believe you need a 4 year college degree to become licensed as a realtor or broker. I guess they do not make any money there. The simple fact is that it is training the seperates the good from the bad. if you are serious about a career in real estate and are professional, then you are worth what you get paid. Everybody thinks 6% is a lot of money. Remember we are independent contractors that pay for are own health insurance and expenses. Stock Brokers are not independent contractors. just so you know. I would not mind being paid hourly, then buyers and sellers would need to put their money where their mouth is. We can all represent ourselves in court can't we, but how many of us excercise that right, not many? And when you hire an attorney how do you know they are any good? Just because they graduate from law school does not make them smart, they can just be vey persistent. Also when selling stocks what is the legal risk for the stock broker versus the real estate agent selling a house, big difference. I have to run now, I am going to collect money that I did not really earn, because I sold a house that the seller could not sell for 9 months. We got it under contract in 3 weeks, once we took the listing and priced it correctly. He lost about 30K by messing around, but I should cut my commission, because I sold it too fast by doing all the research, which the seller could not do. Which you know only takes 10 minutes to do. My job is so easy.
You see, these kind of blatantly false statements are the reason why real estate pros are looked upon as no more ethical than used car salesmen. Any seller or buyer savvy enough to have Internet access can quite easily do the research and yes it can be done in 10 minutes.
An honest real estate pro.
Thank you kindly for your support but don't worry your pretty head about me or the insults that I endure for speaking the truth. Some people just can't handle the truth and it's nice so see that there's at least one other real estate pro out there that also speaks the truth.
Buyers' agents get nothing if there is no sale, so they want their clients to buy no matter how bad the deal is, the exact opposite of the buyer's best interest. Agents take $100 billion each year in commissions from buyers. Agents claim the seller pays the commission, but always fail to mention that the seller gets that money from the buyer. Think about it: who brings the money to the table - the seller or the buyer? All money comes from buyers. No buyer, no money.
If a stock broker were to charge 6% on the sale of stock, he would quickly go out of business. Real estate brokers don't do much more than stock brokers, so why should you give up nearly two years of your working life earning money to pay a realtor for the few hours they may put into helping you buy or sell a house? 6% of the 30 years it takes to pay off a house is 1.8 years of donating your working time to your realtor.
There are good buyer's agents who really believe they are helping the buyer, but they're in denial about their conflict of interests. Author Upton Sinclair had a great explanation for this: "It is difficult to get a man to understand something when his salary depends on his not understanding it."
An honest real estate pro.
Since when did a Realtor become a professional, you need more than a GED to be classified as a professional. A degree within an an honest profession at the very least is a requirement to be called a professional .
Calling a Realtor a professional is akin to calling a used car salesman or a taxi driver a professional.
you have had several answers already, SO I will keep this short and try not to be repetitive. we work 93% BY REFERRAL, which means that the other 7% comes from the internet or UNREFERRED clients.
Ask for references, and not "their version' of the reference. Here are what a few of my recent clients say about our services.
if my team and I can help, just let me know.
We believe in not pressuring clients and focus on education them and giving them ALL the info to make wise decisions especially in this buyers market; we work as "single agents" for our buyers so that means we are ONLY working 100% for you, we care more about our clients than selling any one house which is why we have clients for life and our purpose is to have raving fans because then the rest takes care of itself. Hope this helps - good luck in your home search!
I have to agree with some of his comments. The barrier to entry (education level, experience, etc.) is very low (HS) to become a Realtor or a Mortgage Broker. Also regulatory oversight is minimal.
I came from the Securities Industry and on May 1, 1975 the "fixed" commissions were abolished. Before May Day it didn't matter which stockbroker you went to, you would pay the same commission if you sold or bought 100 shares of IBM. It took about 20 years (1990s) and the internet but now we pay $10 for a trade that may have cost us $500 or more. Realtor commissions are decreasing, too. I would bet that eventually the Realtor system will switch to a flat fee (rather than the 6% model). It may take another 5-10 years, however...
Real Estate is a bit more complicated than doing a stock trade, however. The most difficult part is calming the Seller and Buyer because they get very emotional at times. This is where I see the most value in having a Realtor. Also, of course negotiating is a crucial service offered. Most buyers/sellers I've met have very little strength in negotiating.
One interesting study found that the lower the education level of a Realtor, the higher the annual earnings. PhD's earned less than Masters, Master Degreed less than BS and the highest earners had less than a Bachelor's. That may tell you that being "book smart" may be inversely proportional to being "street smart"!
There are many "buyer rebate" Realtors (perfectly legal in Florida but not all states) who are willing to share their commissions (instead of sharing it with their broker), so if you're comfortable with a more "do it yourself" type of plan, try one of those Realtors, TheAce. Also there are Flat Fee listing Realtors but you should still pay 3% to attract a Realtor to show her client your property--especially in this market where we have a glut of available homes.
Fun to read the emotional reactions to TheAce's comments...
A buying agreement is something you should look at and read very carefully. This is a contract for you to work with him, produce any necessary documents the Realtor asks for, so on. The Realtor's part of the contract is to find that house for you, facilitate the contract/negotiations, and see that the closing is handled properly. Some buyers agents will do more than what's written, out of the kindness of their heart.
1) How did you find your hair stylist?
Your Dentist or Your Attorney? You asked friends most likely Do the same.
2) Your REALTOR represents you, but is paid from the proceeds of the sale. If you take 200K to the table, then roughly 5 to 7 K is for services. It comes from the sellers part, after the bank and other expenses. SO it bites into the sellers profit portion. But the seller should have negotiated a fair price based on those fees being deducted and therefore everyone should be happy.
3) again, from the proceeds of the sale. What they charge is what they are paid on the transaction. Some buyers agents will ask you to sign a buyer brokers agreement, which is not an evil document. I spend about 1000 in gas alone every month, so I cannot afford to be a travel agent and tour guide. If you are getting in my car, and I can find you a home, I expect to be compensated for my time, effort, and expenses...so that document protects me. If I don't do my job, then I don't get paid...It's that simple.
Your main question should be, how do I find the best Buyers Broker FOR ME??????...!!!!!!!!!!!!
Gary De Pury
Bay Vista Realty & Investments, Inc.
Chairman, Communications Committee
Director, Florida Association of REALTORSÂ®
As far as how to find and decide on the right buyers agent, some recommend looking at the names on signs, but these are listing agents. They can and usually do also represent buyers, however remember that if they show you their own listings where is their real allegiance. They then have to be kind of neutral. They still have to give you all the material facts of the property, but are they really giving you full representation, and are they working to negotiate the best deal for you. More of the responsibility lies with you at this point.
Many wil say personal references which can be a good way, however remember that different people like or don't like agents for certain reasons. Some buyers like to do almost all the work. They look online then drive by the homes, and if they like what they see they then call the agent to show them the home. To a person like this, what they need is just someone who can open the doors, and to negotiate the contract for them.
Other buyers like to be truly represented by the agent. What I mean is that the buyer may still look online, but also want an agent to find them homes that meet their criteria. The buyers agent will then work to find you the homes that are the best buys. For example, when I look at homes on the Multiple Listing Service (MLS) I generally find 10% - 15% of the homes have a great price, maybe another 10% have a good price, then the rest are overpriced or in some cases are overimproved resulting in a high price. What I mean by this is if you look in a subdivision or community, you may see most of the homes have the same basic features. One homeowner may have added on, put in multiple upgrades and has made the home much nicer than the other homes in the area. This home has been overimproved for the area, and even though the seller wants a lot more money the neighborhood will not bear the price being asked.
In my opinion the best way to find the right agent for you is to talk to several of them. Call them on the phone. Do they answer their phone? If not do they call you back in a reasonable amount of time? If you email them do they respond in a timely fashion? If they do not, how good will they be to work with?
Next the questions to ask:
1. How do you get paid?
2. What happens if the seller does not pay a commission?
3. How long have you been a Realtor?
4. How successful were you in 2007?
5. How many homes did you sell in 2007?
6. Do you work as an individual or in a team? (Hint: Teams may say they sold 100 homes, but have ten agents. This might be the same as an individual agent selling 10 homes in a year.)
7. If you email properties, what properties do you send me? (Hint: some Realtors just put you on an automatic MLS email program where you are emailed every home. This requires no work from the Realtor. Other Realtors go through all new listings daily that meet your criteria and send you the ones that are priced right, and that best meet your needs. Do you really want to receive 100 properties including ones that are priced tens of thousands of dollars too high>)
8. Do you preview the homes that seem best? (This is especially important for a buyer that is not local)
9. What kind of training do you have? Look for Realtors that go to more than just the basic training classes.
10. Do you have any designations? Look for the letters after their name, such as CRS, e-PRO, and many others. These require many hours of extensive training and testing.
11. Do you work as a Realtor full-time or part-time? (Many of the less successful agents, especially in a slow market end up taking another job, and are only available to you part-time. Do you want an agent that cannot stay in the business full-time and can only show you homes on certain days.)
There are many other questions you can ask, but you should have a good idea with these. And remember, if you start working with someone and are not happy with them, you can drop them and work with someone else. If a Realtor asks you to sign a Buyer Brokerage Agreement, which is fine in that it builds committment for both parties, make sure that you can fire that Realtor at no cost to you, if they do not do the job the promised or even if you just do not get along. You want a knowlegeable Realtor that you feel comfortable working with.
Buyers agents are paid by the sellers broker. The listing agent advertises a % for commission. If you find a FSBO and the seller will not pay the buyers agent a commission then at that point if you feel that the agent has done a good job then you could pay them an agreed upon commission. There is no blanket fee for being a buyers agent. Everything is usually negotiated.
Please contact me if you have any further quesitons. I am a buyers agent here in the Tampa area. My number is 813-240-4022 and my email is firstname.lastname@example.org