What facts are you presenting? You must get a kicker from Redfin as that's the only thing I hear. If Redfin is an option in the markets they're in, great for them and all the folks involved with them. Redfin isn't in Atlanta but there are agents that will discount their buyer fees so the end result is the same, I don't do that. What you quoted from me is accurate - buyers typically do not pay for buyer representation and I think buyers that go in unrepresented are foolish. If you want to continue the drumbeat that buyer agents are paid to do nothing, then have at it. I've seen buyers with your opinion get hosed by working with discount agents or trying to go at it alone. The agents giving away the majority of their commissions simply want deals closed - you have a higher degree - draw your own conclusions about the level of service you get. I don't do that, I don't have to do that and I won't do that. If I have someone like you who seems to see a boogie man behind every door then I'm only too happy to refer you away. Can that be said any more clearly?
As far as ad hominem attacks, look in the mirror. You opened up on the entire process with a completely unsupported argument. You still provide nothing to support your assertions, instead leaning on Redfin and Zillow as your...your what? What exactly is your argument anyway? That buyer agents should give buyers discounts because of whatâ€¦.all the data available? Or is it that agents are unnecessary and overpaid? You maintain that Iâ€™m trying to â€œhideâ€ something? Hide what? What deep dark secret is the real estate world trying to hide from Bill Taylor? And just who is involved in all of this?
Obviously you have a bone to pick with agents in general, but as I pointed out I have many of the same issues. What went on in this business over the last several years was reprehensible and agents were in the middle of it. The internet is improving this business dramatically; the data available makes everything more transparent and much easier for everyone. With that information comes increased efficiency for agents and increased understanding and confidence for consumers. Agents remain a necessity and the level of proficiency of agents will increase, or as you so eloquently stated â€œthey will dieâ€.
While I enjoy the ying and yang with you, Iâ€™m at the point of diminishing returns. Letâ€™s summarize: I donâ€™t know of any â€œagent conspiracyâ€ regarding commissions, weâ€™re all on our own with that; I donâ€™t practice dual agency or cut my buyer commissions; we both agree that there are unskilled and ineffective agents out there; and the internet is a wonderful source of data that agents must embrace or risk imminent death.
OK Bill Taylor, I have to prep for an appointment with a CPA (higher degree guy from Wake Forest, lots of letters after his name). He called Monday after learning that the small apartment building he and his partners (more professional higher education guys spending 7 figures) just contracted has about three pages of issues ranging from zoning to structural to value to environmentalâ€¦whoops! Should I tell him to get on Redfin?
Writing the contract
Inspection (yes, you can find someone to do one... do you know anything about the inspector... have you used him before... is he good with vintage, or contemporary... is he thorough? Once the inspection has been completed.. how comfortable are you knowing which items are worth ignoring, which should be credited [and how much] which must be repaired, and which items are bad enough that you should walk away from the deal. Most inspectors will not give you that kind of information.. it's not their job)
keeping track of the loan
interaction with your loan officer
(attorney, if you use one in your are)... how to find one, and interactions with them
I think you'll agree, that it's helpful to have someone on your side who's done all this before, successfully. The listing agent, while they'll attempt to be helpful, has his loyalties to the seller... and the seller only!
as far as commission... the seller has already contractually agreed to offer a percentage for the buyer's agent. So you don't pay anything "out of pocket" to the buyer. Since the seller is paying that amount, whether you have an agent or not, why not take advantage of it, and bring your own agent?
In addition, most foreclosure properties show, "as-is, no disclosure". However, a good agent will get concessions despite that "as is" nonsense. My last buyer got a home warranty, closing costs, repairs and all kinds of things because she had an agent that knew how to get those things for her. I would like to offer my services.
Further, with your status as a first time home buyer, it is important that you be made aware of the assistance programs that are available that could get you into more house for the same low monthly payment. Read the blog at the referral link below for more information.
All my best
If this "intelligent" buyer is so capable, he will offer what the market indicates the home is worth. He is focused on what that home is worth to him at that point in time based upon the supporting data available at that time. That's it - nothing else matters - that house is worth what he is willing to pay at that moment.
What the seller is paying in commission doesn't matter, what the seller thinks of value doesn't matter, what the seller owes doesn't matter - all that matters is what the buyer decides to pay based upon the data.
Business models don't matter to the buyer, whether or not there's a 1, 2 or 3 or 10% commission DOES NOT IMPACT WHAT THAT HOME IS WORTH TO THAT BUYER.
Now, if the buyer sets his price at such a point that the agents have less than what they expect for a commission, they have to resolve that if a deal is to be made - THE BUYER ISN'T PAYING ANYTHING and the buyer's agent and listing agent will have to resolve any issues between them. As I've said I do not negotiate my buyer fees - I earn my fees, I collect my fees, I have a good supply of valued clients (including commercial normally at 10%) and I don't intend to change my business model. My clients are happy to have me represent them because I SAVE THEM MONEY, TIME AND HEADACHES.
Agents set their own fees, just as many other professions do. Unlike you, we have the ability to earn based upon the service we provide to our clients, weâ€™re not hoping for a bump in the minimum wage like you are.
Not only are you ignorant, you're just plain dumb if you can't understand this. And knock off all of the agent bashing - at first it was a spirited back and forth, now you're just displaying a very strange obsession about a field that you obviously have no use for and one that has no use for someone like you. You are unable to present a cogent argument and dealing with you is akin to dealing with a kid on a playground. Get on top of the slide and tell all the boys and girls about those bad real estate agents, at least you'll entertain them.
To be conscious that you are ignorant is a great step to knowledge.
If a seller lists a home with a 6% commission he WILL pay that commission at closing. Whether it is shared with a buyer's agent, the listing agent gets it all or it goes to the man on the moon... it makes no financial difference to the buyer. The BUYER does not contribute to the commission.
I'm going to ignore posts to this question in the future and not bother to read them.... nothing anyone can say will make you understand that you are confused on this issue.
The benefits to using a buyers agent:
1. The buyer agent is ethically and legally bound to act in your best interests to get you the best possible terms in the transaction.
2. The buyer agent would use their knowledge to point out defects when viewing homes. (An old roof, old mechanicals, water problems, foundation issues, location issues, etc.)
3. The agent would also have more experience with contract negotiation. I would assume that many buyers may purchase a few homes in their lifetime, where as real estate agents close many transactions a year. Your agent will advise you on the sellers motivations as well as protecting your motivations in conversations with the seller/their agent.
4. Your agent would have contacts with reputible mortgage lenders, home inspectors and title companies. It is difficult to know who to trust- as an individual not involved in real estate. Your agent can tell you what the market rate should be at that time/acceptable and customary costs for your type of loan.
5. Problem-solving. Each transaction is unique and creates its own set of issues and problems to overcome. Knowledge and experience can be the difference between a transaction closing and not moving forward.
You should seek out an exclusive buyer brokerage in your area. These agents would be looking out for your best interests at all times, with no potential for a conflict of interest.
I won't however, agree with you that I'm threatened by you presenting options; quite the contrary I find it amusing. Repeatedly, I've ask for some support on your position and all you provide is nonsensical banter about this industry. Bring something tangible to the table. If you insist that I don't being value then that's fine, don't hire me and we'll both be better off. If you're an advocate for doing it yourself, have at it - just as you can with taxes, contracts, legal issues....and more. Go get'em tiger, put that advanced degree to work.
Me, I'm fine working with clients that appreciate my expertise, skills and insights. These clients refer me a ton of business and my repeat business is significant. I'll stick to my outdated fee structure, you stick to running around waving your hands.
My level of comprehension is just fine, I can see that I'm dealing with...what's the right word Bill?
The commission the listing broker gets is the same whether they bring the buyer or not. If a buyers agent brings the buyer then the listing broker has to share with the buyer's broker.
As for the benefits you may want to take a look at my blog post. Good luck with your home buying! I'm not in your market but if you have any questions please feel free to contact me.
The core of your point and my point are not far off, you're just fixated on the commission issue and refuse to get past that. I agree with you about the qualifications and ethics of some in my field and I have personally hung agent and appraiser skins on the wall. There are far too many unqualified, unethical and just plain dumb agents out here; that situation is changing. Given that we agree on this, is it not wise for this buyer to interview and use a QUALIFIED agent to ensure he's not dealing with a substandard agent on the other side? If he properly interviews and validates his agent, he'll likely get a good one. Is that too great a leap for you?
One more time on the commission issue - I don't practice dual agency to if he comes to me unrepresented I will tell him go find an agent. I do not discount my fees - period. I do not offer any buyer "rebates, bonuses, or other incentives". I'm happy to pass any client looking for this type of activity to another agent. I also said there are flat fee, discount agents and those agents that might cut fees - how am I misleading anyone? Clearly you're having issues understanding this, probably because it agains has to do with commissions.
You're right in that you have every opportunity to offer an opinion - even a baseless and unsupported one such as yours is. At least you're confident in your ability to navigate the real estate field but your ego is way ahead of your ability, ignorance is bliss so have fun.
You harp on Redfin as if thatâ€™s some magic bullet thatâ€™s going to free every buyer and seller. Redfin isnâ€™t in Atlanta, but if it were it would be another vehicle for clients to use. There are a plethora of sites and services that anyone can use in Atlanta. Clients can choose to go it alone, use a flat fee agent or go with a full service agent. Doing this since 1989 (and evolving quite well with the technology) my clients have been and remain highly intelligent; intelligent enough to trust one of their largest purchases to an expert in the field. Bring whatever argument you want to the table, nothing beats experience and my clients appreciate what I provide. Iâ€™m also very fortunate to have the opportunity to refer clients that I choose not to work with.
Your commission slashing thoughts are again predicated on the idea of an unrepresented buyer. I made it clear that I donâ€™t practice dual agency â€“ but of course there are agents that do despite the obvious conflict of interest. Your logic of that agent automatically reducing the commission in half is unsupported â€“ especially in this market. While it might happen, most agents are spending more money on marketing, carrying homes much longer and making much less than they have in previous years.
Another myth perpetrated by web realtors like you is that you can save money going at it alone with new homes â€“ more nonsense. Developers will not cut fees and all those offers of rebates and closing costs are recaptured by junk fees buried in the fine print. Additionally, unrepresented buyers in new homes are unrepresented when issues arise. New communities live on agent referrals â€“ if a developer doesnâ€™t provide client service word gets around. Solo buyers donâ€™t have that ace. I know youâ€™ll say use a real estate lawyer â€“ good luck stroking those checks and getting anything done.
If you were closer to Atlanta and had any real clue about this market Iâ€™d be happy to put you in my truck and ride you around to the thousands of foreclosed homes; primary residences, investment units, new construction, fraud dealsâ€¦..We could spend some time reviewing real data, see the number of deals bought by clients not using an agent and getting hoodwinked (infomercial addicts and experts like you). There are of course those using agents getting hoodwinked as well â€“ along with skeevy appraisers, lenders, lawyers, inspectorsâ€¦.these are the times we live in. Oh, these clients include doctors, engineers, and professorsâ€¦.all â€œintelligentâ€ buyers. To run your mouth as you have spouting dime store advice is simply ignorant.
I donâ€™t believe Iâ€™ve overestimated my services, in fact if you read my answers Iâ€™m quite contrary to most realtor positions. As a broker and an SRA designated and certified appraiser, Iâ€™m going to be busy appraising and liquidating inventory around here for years. The smart buyers recognize that this business is fluid like never before and your wonderful web data is like a loaded gun in the hands of a nut; a disaster waiting to happen. I could get angry about being called dishonest, but Iâ€™ll consider the source.
So Bill Taylor, we can agree to disagree and I wish you luck getting over whatever issues you have with agents. As Bob Edwards said - A little learning is a dangerous thing but a lot of ignorance is just as bad.
By the way, what is it that you do for a living?
I won't argue with you on finding the home, although I would challenge you that I could likely reduce your time looking for homes that do not match your criteria better than you can.... On to benefits.
The biggest benefit is the fact that a good realtor is doing this every day. I typically save my clients well over what I usually get compensated for on a transaction. A good analogy is driving to the airport. A good Realtor will make the trip feel like a limosine. A mediocre one will feel like a taxi. Doing it yourself is like hitchhiking.
The best part is that 99.9% of the time, you don't pay a dime. The seller pays for the buyer agent and at least with all of my clients we have a contractual agreement that I will look out for their best interest.
There's more to buying the largest investment you'll ever make than just looking at stale MLS listings and incorrect market evaluations on websites.
I'm sorry that I did not join this frayed discourse earlier.
I believe my first question to you is what has been your experience with real estate agency?
If you have not ever worked with a contingent commissioned real estate professional, then I have a different way of understanding your two main questions.
If you've been burned by one of the "numb-skulls" in my profession, then you have a different view of agency. If you are a property purchasing virgin, and watching every penny then I would understand your questions differently.
So, here's a quick way to judge any professional services business model - real estate agency service provider or not - I refer to the definition of "consulting" from Atlanta's John Adams:
"Consulting is nothing more than the application by a specialist of technical information to a problem which, when solved, offers a disproportionate benefit to the client compared to the fee he pays."
So, by profession, I am a consultant. My specialty is helping Intown Atlanta and Decatur buyers buy, and Intown Atlanta and Decatur sellers sell, residential real estate. On their terms. On their schedule. On their budget. I'm cool like that.
Only you can determine whether you are getting disproportionate benefit for you and your way of looking at the mathematics of a real estate transaction.
I'm usually hired by busy people who value my services as a consultant, for whatever reason they have. I've never been told that I overcharged someone, and after 4 1/2 years and about 150 closings, I'm honored to have the opportunity to earn the business of my clients.
Guys like Hank and I can determine the value of doing business with a guy like Bill Taylor, really quickly. We never work with people like him...We'll sometimes engage them in some sort of egocentric banter on Trulia and then they usually end up bothering some other real estate agent. Thank goodness for companies like Redfin and Duffy because they thrive on the opportunity to work with folks who want to keep their costs low and who seek "know-it-all" status at every touchpoint in the real estate process.
More power to Bill Taylor - he's educated and apparently has a lot of free time. Real estate purchasing and sales is not rocket science, and consumers like Bill are empowered to work without agency, or with an orderly limited service provider. If savvy, and if time permits - go for it.
The full service agency model thrives because many consumers are way too busy to bother with the minutiae, the tedium and of course the occasional A-hole. Nobody has much time for A-holes, especially now.
The thriving agency model exists because real estate is a hyper-local business and increasingly so.
Hank Miller is one of the greats and ATLBuyer, I suggest that you hire him if you are buying in Roswell. You'll get disproportionate benefit
"Could a listing with 3% buyer commission be pulled and replaced with a 0% commission listing?"
Only if the seller does not want any buyer agents to show their property. If you have 1,000 homes on the market and 999 of them are offering a 3% co-op and yours is offering 0%, good luck selling the property!
What if a buyer wants to purchase a property and not use an agent? The listing agent will get the entire commission that was agreed to with the seller prior to the home being listed. Likely 6%.
An agency agreement is between the seller and the listing agent and are agreed upon prior to a buyer ever seeing the property. The seller agrees to give the listing agent a commission-that agent then advertises a co-op on the mls with other agents to bring a buyer. It is the listing agent's commission and it is their decision as to where the money goes. Why would they give it up to a buyer?
I agree with Bill that no one would be paid a commission if the buyer did not purchase the home. However, it is clearly a seller cost as disclosed on the HUD settlement statement at closing. The sale price of a home DOES NOT increase because a real estate agent is involved.
Regarding rebated commissions, consumers are recieving very limited services in exchange for a rebate. For example, their agent may only show a limited # of homes, or they may not show you homes at all. They may only represent you at contract signing and closing.
You have yet to refute any of the statement I've made about buyer's agents. The only thing you've brought to the table is repeatedly calling me childish names, repeatedly telling the world what great service you provide your "clients", and repeatedly asking me to explain things to you that, as a professional, you should already know. You have become tiresome. It's like trying to explain quantum physics to a three year old.
And Thomas, no amount of burying your head in the sand will change these facts.
Real estate agents really need to stop underestimating the intelligence of their customers.
Let's look at what you actually said not half a page down:
"As in almost every situation the buyer's agent is paid from the seller's commission, there is no cost to you. There is no good reason not to use a skilled buyer's agent - you will not save anything despite what you think!"
Again, this is a blatant lie. It is obvious that you want to hide the fact that is becoming more and more obvious to buyers these days; that with the tools available to the general public, educated buyers are able to do the majority of the work in a real estate transaction with minimal help from the likes of you. Your 3% commission is getting harder and harder to justify when companies like Redfin will do just as good, if not better, than you do for 1/3 the cost. It is rather arrogant of you to think that most buyers are unable to navigate a negotiation and closing without you to hold their hand.
If you must respond by calling me ignorant for a third time, please try to back that claim up with actual facts to support your poor misguided logic. BTW, I have a job that actually requires a professional higher education degree. Do you?
Also, you DO constantly mislead the poster into thinking that commissions are not a negotiable commodity. You know that they are, yet lie to the poster that they are not. That would be dishonest in my book. Don't shoot the messenger, as I just call it like I see it. Let's hope that if ATLBuyer does to choose to go with an agent, that he/she will choose an ethical one as opposed to you.
As far as listing agreements go, Hank is correct in that the seller agrees to pay the listing agent a set commission, often 6% (as I also stated earlier.) What Hank fails to tell you is the fact that agents will often refund part of their commissions to the seller in order to bring a buyer and seller together on price. So if you, ATLbuyer, reduce your offer by 3% and the seller does not want to accept 3% less, the agent often will refund that 3% in commission to the seller in order to make the sale. The way the listing agent sees it, they would not have kept the 3% anyway had you shown up with your own agent. If you do not acknowledge that this practice exists, Hank, you are not only obtuse, but dishonest as well.
Your comments, Hank, show your complete disregard for the education of your clients, and your over-estimation of the value of your own services. Sure a few buyers may need to be lead through every process along the way, but ATLbuyer has framed in his/her question the fact the he/she is an informed buyer with a brain. One that may not need to pay an additional 3% in commissions for a service of very little value to him/her. You can mislead buyers about Redfin and their competitors all you like, but the business is evolving. That is a fact. You can either evolve with it or die.
Iâ€™ve heard arguments like yours before, but I havenâ€™t seen the argument so poorly presented. As is usually the case for this topic, the myopic view offered focuses only on money. At the end of the day, a buyer without an agent or using the listing agent is not represented to the highest level. Let something go wrong (and things do) and see how well Zillow and Redfin work for you.
Do you seriously think that a listing agent is going to cut their commission in half because the buyer is unrepresented? Personally I typically insist that there be a buyer agent for two main reasons - I never want there to be a situation where dual agency exists as I don't want my loyalties questioned; if the buyer comes unrepresented I tell them to find an agent and second, unrepresented buyers are like working with for sale by owners - they have no clue as to what needs to be done and easy things become cumbersome. Deals fall apart because there is no guidance or the sole agent has to do double duty. If I have a buyer that wants to make a run at a for sale by owner, I'll negotiate a higher commission because I know it will not be a smooth transaction - and most often sellers understand that and agree.
On listing agreements, the seller is paying a set commission; there is no renegotiation if an unrepresented buyer comes along. The idea that this buyer will negotiate a 3% reduction is ridiculous. Same for new homes; the developer pays a set commission whether or not a buyer is repped. As far as negotiating, youâ€™re off point on that as well. Price is one aspect of negotiation, what about warranties, closing costs, personal property, repairs, possession datesâ€¦and more. Agents often have relationships with mortgage reps, inspectors, lawyers, movers, landscapers, repairmenâ€¦.all looking for business and those solid relationships will be worth piece of mind as well as money saved for the buyer. And donâ€™t forget our ability to pick up the phone and get things done with these folks. I know youâ€™re thinking â€œkickback kickback kickbackâ€ but dismiss that â€“ like every other profession we have laws and standards.
As far as your comments about the data available on Zillow and Redfin, youâ€™re kidding right? Youâ€™re seriously planting a flag in that data? Even if that data was the ultimate benchmark for all things real estate, do you have the expertise to properly interpret and apply it? Being a WebMD guru does not a doctor make. Most of the data on real estate sites is worthless as real estate is local â€“ micro markets even. The only way to effectively apply it is to be in it.
So Bill Taylor, other than these minor points you are spot on. Itâ€™s not like buying a home is a significant investment or somewhat complicated; your points drive home the ease of purchasing one and completing all other aspects. Youâ€™re in Seattle â€“ does spending a few hours on Flight Simulator qualify you to sit in the right seat of a Boeing 767?
Hank Miller, SRA, ABR
Associate Broker & Certified Appraiser
REMAX Greater Atlanta
A skilled agent will guide you through the process and explain each step. Good, easy to understand data will allow you to see exactly what's going on. The negotiations continue through the offer and inspection - a good agent will save you time and money as well as ensure that you are legally represented as best as possible.
As in almost every situation the buyer's agent is paid from the seller's commission, there is no cost to you. There is no good reason not to use a skilled buyer's agent - you will not save anything despite what you think!
Hank Miller, SRA, ABR
Associate Broker & Certified Appraiser
REMAX Greater Atlanta
Well, when the property did not appraise for the agreed upon sales price, their in-house lender would not close on the loan. The builder would not reduce the price, the agent would no longer return telephone calls and this buyer is now a renter once again since the $1,500 she lost was all the money she had available at the time. This entire avoidable scenario is one among others that occurs frequently.
Representation by your own Metro Atlanta REALTORÂ® usually costs you nothing on the purchase of your Atlanta, Georgia Houses or Atlanta Condos for sale (and no, they usually won't consider lowering the price further since you are not represented), but can save big!
You have the benefit of a buyer agent's experience, since they are in Real Estate full time, they have a better handle on local market conditions. If they know the area you are interested in, they will also know the best places to look for a suitable property. In my case, I have listings that are not on the MLS from past clients, and business aquaintences. I can locate property, when none seems to be available. I know which areas are good investments..and which ones are risky.
The commissions are not paid by you, as a matter of fact, my services to you are without charge. I will be paid by the property seller.