If you are needed the help of a Realtor to purchase a home, my question to you might be is the time right for you. You might be pushing the envelope of affordability for you and that could cause you problems in the future. That is what got a lot of people in homes that they truly could not afford. Remember you should be thinking long term because it is not likely you will be purchasing another home in the near futureâ€¦so you need someone in your corner to give you information for your to make the best decision for you and your family and who can get you the best deal.
April Tavares, Realtor
DRE License #01742179
Excuse me for being snarky, but how well would you work for a lower salary?
If you use a place like redfin, then the agent is prepared to work at a discount...so they go into it knowing what the cost is.
Please don't ask us half way into the transaction to give you money, not fair, and you risk annoying the agent, and you really want that agent on YOUR side.
Unless you are in the very top of the price range, be prepared for agents working harder with their other clients that are looking for a good deal, but not going to ask for money. We all have a long list of clients wanting a good deal, in the starter home range. It is only human nature to work harder for those that aren't going to grind money out of you.
If you are looking for a full-service, ethical Real Estate agent, be prepared to pay full price. You want the best!
Plus, you are not paying the commission, since it has been negotiated with the seller.
Your agent has a fudicuary responsiblity to you. A good agent will negotiate well beyond the 'discounted' commission.
Just my 2 cents!
Joanna Bateman Realtor DRE 01792532
First, it comes as no surprise to see this question in this market. Buyers have a lot of negotiating power.
However, let me tell you a few reasons why negotiating commission is a bad idea.
If your friend regularly purchase homes, meaning they invest, such an arrangement is not so unusual. Not knowing the circumstances of your friend's purchase, I can only comment that you likely get what you pay for when you reduce compensation. If an agent is trying to do a "volume business" by offering what is essentially a kickback, they're not really doing themselves, nor the buyer a favor.
The average buyer is better off using an agent who is intelligent and has years of experience. A particularly good eye is invaluable in this business. The number of considerations in a typical transaction is huge and sometimes staggering. And by the way, there is no typical transaction. After 25 years in the business, I can assure you there is good reason to hire someone who has an eye for problems and negotiating items.
Realtors typically know the neighborhoods and the homes in their area. Many can tell you the history and what is happening in the local economy. That includes crucial information like there has been an underground gasoline leak in one part of town or there is a shallow water table. It includes knowledge of a builder's reputation and much more. It often includes savvy that can only be acquired through years of providing this service.
Ask yourself how good the service is going to be from an agent who is offering a reduce rate. Real estate is a business like any other. A business model that is returning an unspecified amount of commission has to make up for that lost revenue. It usually means a business is cutting service. It also means an agent or even two or more agents are spending less time marketing the property, visiting a property and performing any of the other countless chores involved in a real estate transaction. They have to spend their time away from these important activities devoting more time to marketing themselves to capture more volume.
A home purchase is the most important consideration many buyers make in a lifetime. Does it make sense to give the responsibility for guiding that transaction to the lowest bidder?
My practice is to offer clients the best service in the industry. I have the experience, knowledge and business acumen to back up that claim.
Best of luck to you both.
We have had Redfin and other discount brokers in my state for quite a while. State law varies, but it appears to be common in California based on the number of offers you've received to do business.
My belief is this; focus on the commission is misplaced. Find the most competent, talented, knowledgeable and experienced agent you can find. 1-2% of your purchase price equals 1/3 to 2/3rds of the agentâ€™s commission. As others have said, if they are frivolous with their commissions may not be respectful of your money.
I've looked at discount companies and considered if they would be a good fit for me, I've decided they wouldn't. I would have to do 2-3 times the volume to earn for my family what we need and I would have to give each client much less time, attention and focus. For me to work harder, earn less and most importantly provide less service for my clients is not a good option.
Some discount agents may do fine, and some full price agents don't do a good job, but if a good full service agent is hard to find, a great discount agent will be even more difficult.
My advice is find the best agent first, focus on commissions later. If all an agent has to sell is a cheaper commission model, they may not be in a good position to truly look out for your interests first.
Look for an agent that is dedicated to getting you the best deal, not sharing their professional fee. You will actually end up better off. If you are looking for an agent who "shares" their commission they will most likely end up either not wanting to help, and throw their buyers into homes to get a quick commission or someone that is so anxious to get paid that they are looking out for THEIR interests not yours.
An agent that will negotiate on your behalf and take all the time necessary to help will possibly save you thousands on the purchase price, help you find a great lender with a lower rate that will save thousands more and help in repair negotiations, saving even more.
Don't forget, the seller is most likely paying the buyers agent.
Removing the reward is like removing the pleasure that triggered the desire to help some one. A person seeking help most deprived forgotten when the simplest meaning of "do unto others as you would have them do unto you". In a hypocrite world of 'self" expectation, it is gratifying that the balance between giving and receiving is the difference of knowing the pleasures of the reward that comes to both that gives and the one that receives.
If you asked me if I want half salary, of course not. But if everyone do the same job and quality as I am, and they are competing the same job with half salary, then I have to lower my salary -myself- to be competitive. Complaining about it won't solve the problem, doing a better job and adding more time and service will add value to it and hopefully kill the competitors. Insisting on my current salary will just make me lose my job and customers.
No, I don't ask dentist for a 'break' (maybe I should), but if another dentist that provides similar service for half the cost, I'll switch.
If you still don't get it, it's about competition. There are so many people unemployed or receive less salary because of global competition, including me. If you as a realtor can not handle competitors that offer similar service with less commission then that's just too bad. I definitely want to make use of my now-less-income the best that I can, including giving less commission to realtors assuming they all provide similar quality of service.
If you think you deserve higher commission, then mention what you do 'extra', otherwise you're just yet-another-realtor.
My questions to the brokers is what kind of added services you offered that value brokers do not? As far as the price nego, it all come back to the buyer and not really the agent who decide. Full paid agents do not necessary mean they will represent the buyer to the best of ability, many just want to close deals asap to max commission.
I would be willling to bet you that the seller/buyer does not hand part of their paycheck back to their company on pay day.
You do NOT always get what you pay for.
Get real, please.
Couldn't agree more on the impression adjusting commission should project. If a realtor is that poor a negotiator, should that realtor be negotiating on your behalf?
An analogy: Would you rather have the plane you're flying in piloted by someone making the same pay as a bus driver? Or better: How about the surgeon removing your appendix?
Rather than wait, however, I believe a buyer should review their finances and adjust their sights lower. Don't buy all the house you can. That strategy is not a good one as you note - even as the Fed's Biege Book report today was positive and business execs have suddenly become very positive in San Francisco. Standard investment advice is never to commit all your money to one investment.
In this case however, I think its a discussion worth having (even though its been discussed many times prior) because like it or not, times, they are a changin'.
If I'm the Buyer's Agent, I may be working for free b/c the Buyer may choose not to use me after chauffering them all over the planet, so anything I make off the next transaction helps to compensate me for any loss. We are self-employed and all we get paid is commission but there's alot of up front fees to consider.
In Florida, it's illegal for us to split our commission with anyone. We are allowed to return a portion to OUR buyer or seller but that's about it. Even that way, it MUST be disclosed to all parties ahead of time.
These days, it literally takes month to even make any money and sometimes we still have to wait past closing before it's payday.
It should be illegal to give rebates but unfortunately it's not. It's funny how RESPA wants to stop lender and Title/Escrow fraud through gifts, money, etc., but they do nothing to stop buyers from the same senseless practices.
Only with experience will other Realtors figure it out, that rebate buyers are in it for themselves and will rarely ever refer you to another friend/relative buyer. It's all about the one deal and thats it!
As in any service business bear in mind you only get the service that you pay for. That said, it is a common misconception that fees are fixed at 6% when in fact fees are negotiable. However, it is the seller that dictates the total fees (as they are the ones who are paying!!!) and also what the buyer's agent is to receive. For example, some sellers will offer the buyer's agent 4% commission.
In today's economy everything is negotiable! Find an agent you can work with and then negotiate.
Good luck in your home search.
Your friend got what they paid for and you will too if you proceed down this path, a desperate, weak agent willing to do anything for some business. Ask yourself this, "If the agent is so willing to give me part of their hard earned salary, how hard will they fight for me when negotiating on a home?"
Here's the truth, Weak, inexperienced, poorly trained agents (and there are many of them out there) can only offer one thing, they'll buy your business. The public should know this and understand it. While they may talk about "new business models" it's only spin designed to persuade you and other gullible people into working with them.
If this is good enough for you, then by all means look for a broker willing to discount. If on the other hand you want a great Realtor, let them earn their money and help you find a great home at a great price and make sure that your largest financial transaction is a successful one.
I wish you all the best and have included a link to a blog post I've written here on Trulia on how to find a great Realtor.
real estate wealth in Silicon Valley. Michael Young 415.286.0831. Working with a qualified reputable real estate professional is key to your success. Please let him know Saundra Allman referred you. Sincerest wishes for your satisfaction. Saundra Allman
"Remember, you get what you pay for", and in this case the buyer isn't even buying.
Highest and best regards,
REALTORÂ®| Century 21 Elite Home Finders
Certified BPO Specialist
5401 S. Kirkman Rd., Ste 725 | Orlando, FL 32819
Direct: 407.256.8190 | Fax: 407.264.8073
But sure I share my commission. With my wife, my daughter, my sons, my grocery, my mortgage holder, my tax man both federal and state and of course local real estate taxes. Feeling generous at times, I share with charities, churches. With some of these folks I get a return of a little love, a little satisfaction, a little peace of mind, a place to live unmolested by authorities. If I can figure out where to put my sharing with you in all therse benefits I receive by giving you a little of my income, I might agree. I guess you might buy using someone else and I get nothing. Since it is bad precedence to give my income to customers as a bribe to work with me or use my services, most of us would pass on the opportunity. It does not happen in other major purchases so why a home? But if the seller can pay at least 3%, half of which is my fee, I will consider being bribed. Let us know how this works out for you, please. Nothing wrong with asking by the way. Thanks for sharing though.