Unlike your job which is likely salary driven, this job is paid when you close - huge difference. I work seven days a week, a good 14 hours a day. I'm fortunate to be a Swiss army knife - I can adjust my appraisal volume to meet the requirements of my broker business. I also happen to enjoy this in some convoluted way as Iâ€™m not chained to a desk or working my butt off for someone else. Those knock off deals that you think are so easy are also mixed in with the deals that blow up after weeks of attention for which we get zero compensation - as a paid by the hour/salaried employee you don't worry about that. The listings we take are out of pocket expenses in time and money, when they donâ€™t sell or the client pulls them who repays us? The easy deals mix with the complicated deals mix with the non-deals.
Typical, you go right back to the â€œbooksâ€ in running math. Your example is wonderful, and the math supports your position â€“ and itâ€™s also out of context. You are an expert, the vast majority of flippers are nitwits. Consider the variables: if the math completed to estimate purchase price is wrong, repair estimates wrong, estimated value after repair is wrong, estimated cost of repairs is wrong, estimated time of repairs is wrong, estimated scope of work is wrong (mold is missed a good 90% of the time), estimated marketing time once offered for sale is wrong, targeted audience after renovation is wrongâ€¦.then your snippet is nonsense. Most folks â€“ not you â€“ will need guidance on that. Of course handling the contractors, billing and quality of work are also issues â€“ for others.
You might think I was kidding when I said I see real estate â€œexpertsâ€ stacked on the foreclosure steps â€“ Iâ€™m not. I do good 50-60 foreclosure appraisals a month â€“ thatâ€™s the only appraisal work I do â€“ and probably 25% of those are â€œinvestorâ€ homes that were purchased, rehabbed to some extent and lost. Why? Because the dummy owners thought they were going to save money like Carlton Sheets said and like they saw on HGTV. The biggest reason for them burning out is a lack of understanding about market trends, level of updating to do and return on income. Of course they also fail to research carrying costs, selling costs (damned blood sucking agents) and the aggressive buyers coming at them â€“ sharks eat sharks. The last gasp on many of these come with â€œdiscountâ€ agents â€“ you know the type, the ones that charge flat paid up front fees â€“ and believe it or not, they donâ€™t sell. The vampire agents though, being paid in advance, donâ€™t lose sleep.
For the umpteenth time on here and everywhere, let me say that more agents need to go and that this business needs to raise the performance and requirement bar. This remains a part time profession for many and the public at large loves to complain about realtors but does nothing to force change. Few adequately interview and vet them, too many use DNA agents (part time friends/family) without regard to skills or experience then whine and the industry is concerned only with collecting fees. How many more nonsensical designations can be invented? A competent agent doesnâ€™t need to waste money on alphabet soup designations â€“ you get infinitely more from working every day.
Almost last point; is your vitriol also directed at lawyers, CPAs, mechanicsâ€¦..etc? Are you stocking the shelves with â€œfor Dummiesâ€ books on all of that as well? Handling all of that yourself to avoid blood suckers in those fields? I hope youâ€™re getting into the health care issues and insurance companies, which makes bloodsucking agents mosquitos on a cowâ€™s butt. Handle that then bring the troops back â€“ actually get them back first.
It sounds like thereâ€™s a closeted realtor here, clearly thereâ€™s a jealously and a desire to live this extravagant lifestyle. I would submit that if you could break the chain, embrace chaos, deal with personalities you simply cannot imagine, many folks that refuse to acknowledge hard data and do it in a business now partnered with a wonderfully caring administrationâ€¦.and get paid only if deals closeâ€¦.then you should join us. Most people donâ€™t have the guts to work a job like this with no security, no guaranteed pay check or even client base, no benefits, little to no support, no vacations and really no respect (which we are to blame for).
You have a few good points, several that I agree with but I think weâ€™re going to agree to disagree to most others. Gotta run, need to go swamp a few sail boats with my Donziâ€¦..
Having 9+ years in the Army Corps of Engineers both enlisted and commissioned provided ample experience working with engineers and the â€œtechnicalâ€ side of your field. We completed all types of design projects from design to finish. This included vertical and horizontal projects; from airfields to bridges to housing to sewage treatment plants and everything in between. We also destroyed just about everything. I say that to let you know that I understand your business.
The margin of error for your business is far less than mine. Your business has multiple checks in place; you're not likely (likely - I don't know for certain) to release something unverified - engineers love redundancy. The likelihood that someone in your singular position (even if you have a PE) is going to put lives at risk is unlikely. That said, obviously engineering disasters occur but responsibility is placed at a much higher level and not on one engineer. Multiple checks at multiple levels reduces the chance for error.
I can also draw a parallel to real estate and engineering â€“ multiple ones. As an individual, I donâ€™t need a PE to stamp plans, I can use a draftsman or experienced builder. I donâ€™t need an engineer to design a retaining wall, I can use landscapers. I donâ€™t need an engineer to design a roof support system; I can go to building supply stores and have them do that. I can even buy modular homes or components for a mixed design. Or even better, I can exploit any of the engineering universities around here (GA Tech is rumored to be pretty good) and consult with interns or grad students and use them. If I want a PE stamp, then I can just bring work to you and offer you 30% of your design fee since youâ€™re just pushing a pen and stamping a paper. That is assuming that youâ€™re a PE of course. If not, I can always find another willing to work cheap.
There is virtually no redundancy in real estate; agents are essentially unsupervised independent contractors that can sling whatever they want to whoever will listen. Supervising brokers, review brokersâ€¦whatever you would like to call them do not review every transaction. Those that claim to cannot legitimately tell me that they do a comprehensive review; itâ€™s not possible with their other demands. Unlike your business which loves redundancy and accuracy; this business cares less about it.
So while your dramatic statement about lives being at risk in your business sounds wonderful, itâ€™s really nonsensical due to the levels of actual review. In this business, lives arenâ€™t at risk but financial lives are. Engineers like things in boxes but thereâ€™s more to this business than just data. Just as Web MD doesnâ€™t make you a doctor, all the real estate sites donâ€™t make you a broker. You need to filter the garbage from the data, apply the proper data, write the proper contracts, develop proper pricing, negotiate properly, deal with emotional variables from other parties and deal with an industry being micromanaged by Washington. Everything doesnâ€™t fit into the boxes that engineers like to use. Unlike engineers, good brokers embrace and control chaos.
I could bore you to tears with the examples of â€œinvestorsâ€ that jumped into the market (and still are) to make money by buying foreclosures. Uneducated, naive, and completely ignorant of the process, these homes are back in the foreclosure pool. Home buyers overpaying because they â€œgot an agent rebateâ€ when they didnâ€™t pay for buyer rep to begin with â€“ now well underwater because they used a transaction agent to â€œpush papers and collect 4Kâ€. There are many agents happy to do exactly what you described and watch you walk of a cliff â€“ financially speaking of course because only engineers have lives in their hands.
Clearly you have a grasp on things with your approach and thatâ€™s great. For others, ignorance is bliss and those bodies (there I go again) I mean foreclosures, continue to pile up. For me, my clients and especially my commercial folks, we save tremendous amounts of money and have a much more enjoyable experience using the university assets for our engineering requirements. Itâ€™s enjoyable to work with a group of ambitious and open minded folks eager to learn and understand that not every problem fits into a box. Of course knowing that professors are riding herd is also a great benefit â€“ but the best thing is that all of this adds zero to the clientâ€™s bottom line.
As you have reduced your realtor requirement, we have done even better having reduced our engineer requirement to zero; with the resources we have there is no need for independent engineers. You are a dying breed.
As far as contacting listing agents for shows, the potential issue there is procuring cause; parachuting in with a buyer's agent after being unrepped when looking at the house will likely cause issues.
I guess I'm a lucky paper pusher, I've never been asked to cut my fees.
Just curious Open, what vital job do you hold that someone else can't do for a fraction of the cost?
I wouldn't be name calling (calling the Realtors who've answered Dario's question stupid) if you are the one who is uneducated. I'm not sure if every state is the same but from Craig's answer I can see that at least Florida is the same as Georgia in that the listing agent receives both commissions if there is no buyers agent involved. This is clearly stated in the listing agreement. It's probably the same in most (if not all states).
It's uneducated and mean spirited people like you that perpetuate these types of incorrect ideas.
It is widely considered a good idea to refrain from making bold statements regarding areas you're not an expert in.
I'm just saying...:)
Craig, thank you for stating the facts so clearly.
The sellers agent will receive the full commission. Commissions cannot be paid to an unlicensed person. According to listing agreements if there is no buyers agent, the sellers agent retains all commissions in accordace with the agreement.
Nice try though.
Better get an education before making comments.
Wow... you certainly received a great number of responses and everyone has given good respective to what you're attempting without gaining the full story. Are you making an offer on bank owned properties? Are you making offers on HUD owned homes, new construction or FSBO (For Sale By Owner)? Each of these require a different technique, expertise' and many cases be a registered licensed agent in Georgia. Many listing agents and banks will not negotiate directly with a buyer. Too much liability.
If you take a little time and speak with a few "Realtors" (professional designation) you should see why we are required to be licensed.
Simply think of it this way... you wouldn't cut your own hair, would you? You wouldn't perform surgery on your self would you? Seek a professional.
Robin Lanese, Realtor,
Accredited Buyer's Representation
Real Estate Owned Specialist
Solid Source Realty
Direct Line: 678-231-1412
A possible (and suggested) work around might be to contact his managing broker. Ask him/her if they could either assist this agent or have another better skilled/more experienced agent work with you and him. The broker should honor your request and you should be very candid in your reason for asking for this. The broker can work a referral for the "helper" agent or do the work themselves out of a sense of responsibility - this is after all one of his/her agents! If that didn't work there are more aggressive routes but those tend to get messy.
Bottom line is that there are far too many noodnick agents out here - you as a buyer shouldn't be put at risk or not get the best service possible. Of course this would have been a lot easier if you had acted much sooner, I don't think you suddenly had reservations?
You should know that if you signed a Buyer's Agency Agreement with the agent you are working with you need to (and should) honor it. You really don't have a choice. The Agency Agreement states that your agent has earned his/her commission and if you wait for it to expire there is a protection period (typically 90 days, depends on what you agreed to) that will protect your agent. So, even if you purchase the house after the expiration your agent will be entitled to the commission.
As the other agents have stated, I wouldn't recommend trying to go through this transaction without representation (even if you aren't thrilled with the agent). If you feel very strongly that your agent isn't doing a good job and representing your best interests then your only recourse would be to contact the agent's broker and discuss it with them. You can be released from the agreement but only with written consent from the broker. The broker may do this if there are compelling reasons but most likely won't. Even if the broker does release you from your obligation to work with this particular agent the broker will insist that you use another agent under that broker (since the Agreement is really between you and the broker, not the agent).
You really should have addressed the issue of not being happy with your agent earlier...you would have been in a better position to get out of the Agency Agreement and/or getting another agent to work with.
From your question it seems as if you found a house and would like to write an offer. If that is the case then...It is legal for you to submit an offer on a house for sale. However I agree with Craig who already answered your question. There are many unknown risks you put yourself in if not represented when purchasing a home; this is true regardless whether the house is listed or a for sale by owner. When listed, the listing agent has the seller's best interests in mind, not yours, and you can easily say or do something that can put you at a huge disadvantage. When a for sale by owner, both parties really don't know how to handle the transaction and there are many problems that can come into play.
I'm not saying this to scare you into working with an agent, I'm telling you this from experience. I've dealt with many buyers that have tried to work on their own and have had some pretty bad (and expensive) experiences. If you have any more questions or would like my assistance I would be happy to help and would love the opportunity to work with you. If it would make you more comfortable I have a list of clients (both buyers and sellers) you can speak with to find out how I work.
Hope this was helpful and good luck,
Buyer's Agents are paid by the Seller. We provide you with the knowledge of the most recent sales in the area, the list price to sales price ratio, the amount of closing costs the Sellers are typically paying for Buyers, etc. There is no other way you can recieve this information without a Realtor.
You can not be paid a commission without being a licensed Realtor.
I am an Accredited Buyer Representative. I speacialize in finding the perfect home for Buyers and negotiating the best terms for Buyers. Fewer than 3% of Realtors have achieved this designation NATIONWIDE. You would be making a HUGE mistake to not hire someone like me. Especially when you know it's a free service.
Keller WilliamsRealty First Atlanta
Can I act as my own doctor?
Can I be my own brain surgeon?
Can I be my own lawyer?
Yes, but if you tried to do it on any of these profession, people would think you are crazy. What makes people think they should try to represent themselves in one of the largest financial transactions of their lifetime? Real Estate is a professional business that requires professional expertise when it comes to real estate contracts, negotiating and working for your best interests. You would be crazy to represent yourself.
Data research, interpreting and applying the data, negotiating, writing effective contracts, finding homes, working inspection issues, appraisals, finding best mortgage deals....on and on and on....
To boot - representation is typically free for buyers. You'll get inundated with answers - cruise my site for an education on how we can help -
Hank Miller, SRA, ABR
Associate Broker & Certified Appraiser
Prudential GA Realty
Some of the brilliance bombs that Hank dropped on the knowitall engineer and the cheapskate attorney made me laugh out loud, chuckle incessantly, and generally hang on every word across 31 answers.
Dario - you got all the right answers. And, thank you so very much for asking this question because you somehow attracted a couple of really interesting commenters. Commenters who are now reeling from Hank's can of whoopass...
Short answer, no.
If you know what you're doing, and you're comfortable handling all the little intricacies that come with seller a property, (advertising/marketing, writing copy, holding open-houses, pricing, negotiation, inspection, dealing with the buyer's lender... etc, etc, etc... 'till closing) as you've clearly done... then you certainly can sell your home on your own. It is 'not' rocket-science, and it can be done.
But most of the public is not comfortable handling all those aspects of a sale. They're smart enough to know what they don't know 'could' cost them money, so they're willing, if not eager, to hire a professional to handle their sale. Some hire attorneys, some hire full-services Realtors, others hire flat-fee agencies (as you did) to list them on the MLS.
There's a real estate model for just about everyone. You can have as much or as little as you need.
So you want to talk margins, so here's an example for you. I recently purchased a distressed property for $130k, I put $30k into it (all costs including transaction, financing and closing), and sold it for $195k. That's a profit margin of $35k. If I had used a realtor to sell it, I would have dished out $11.7k, reducing my profit by over 33%! Conversely, I only spent about $300 putting the property on MLS and marketing it myself. I got multiple offers within two weeks. If a realtor was involved the the first transaction, it would have been $7.8k. So for both transactions nearly $20k would go to realtors.
I read all these comments and realized all the fear mongering that was going on here and had to speak up. I have heard the argument "It's the largest purchase of your life, use a professional". On the contrary, "Don't squander your hard earned money by dishing out a large percentage of the largest transaction of your life."
The simple answer to your question is "Do you need an agent or Realtor to submit an offer on a property?"... No, you don't... you can certainly submit an offer on your own as the buyer. You cannot, however, represent someone else (for profit... THAT requires a license).
To address your second input... that you're working with a Realtor and have found a property (presumably with them)... can you wait for that buyer's agreement to expire, and then buy it without him.... Well, you can... but you may still be obligated to pay him a commission, and if you approach the property without your Realtor... it may make YOU liable for that commission, since the listing Realtor may not be required to pay him. It's a bit of a morass, since you found the property with your agent, but now want to circumvent him.
A better solution might be to approach your current agent's managing broker, and tell them about your dissatisfaction with your agent, and ask them to reassign you a new agent to make this offer. That will make it clean and you'll hopefully be better represented (as the managing broker will probably be keeping a close eye on the transaction)...
I am an engineer and part time real estate investor. You can try to draw a parallel to engineering work, but if engineering is extremely technical and if done wrong, lives can be at risk. On the other hand, real estate is a buisness transaction, and of all my transactions I consistently end up with significantly more $ in my pocket at the end of the day when I have the least amount of realtor involvement.
The truth is that price sells homes. If you can list a $250K home on MLS for less money because you're saving on realtor commisions ($15,000 at 6%), odds are that you will end up with more in your pocket and sell the home quicker. A large majority of the "marketing" of a home is simply listing it on MLS anyway. In the olden days without internet, the realtors would work with other realtors and search criteria to compile the prospective homes for buyers, but now most buyers simply search MLS themselves and the criteria can be narrowed down with a click of a button. And if you are selling the home yourself, you could also post it on craigslist, local paper, even internet ads. If you do these things, you will probably be marketing it more than 95% of realtors would.
As far as representing yourself as a buyer's agent when there's already a seller's agent, there is one option that I employ:
1. Search for homes yourself on websites that have MLS data such as Zillow.com.
2. Contact the seller's agents to arrange times to see the homes you are interested in.
3. When you have decided on a property you would like to make an offer on, call local realtors and tell them you'll hire them if they rebate some of their commision back to you at closing. Personally I ask for half and I don't take less. This is justified because you've done most of the work yourself as you found the property, they are only stepping in with the transaction. That's 1.5%, or nearly $4k on 250k as a check in your pocket at closing. Some will try to tell you that their services are worth more, blah, blah, blah. But you will find a realtor who will do it, as it's just a business transaction and they're still making nearly $4k for mostly pushing papers around.
You need to be Licensed to act as a REALTOR or a Real Estate Agent. As a REALTOR, you are an active member of the National Association of Realtors and abide by the Code of Ethics and By-laws which are required. It is un-lawful for you to receive a commission. As an un-licensed person, you can put an offer on a listed property or one offered By Owner, and have your Attorney draw up the contract. However, why would you want to go in un-represented on one of the biggest purchases of your life? Why would you give the Seller and un-fair advantage in the negotiations and on home inspection issues?
I would recommend you speak with a Real Estate Professional to represent 'your interests' in the transaction. You as a Buyer don't pay for his service... There is a mis-concenption that you will get a better deal from the Seller, since he is not paying a Buyers Agent-wrong! The listing agent would receive the entire commission as stated in his Listing Agreement. Your Agent will research comparable homes sales to give you the best advise on the approx. value of the home, ensure you are pre-approved with a reputable lender, write up the offer and go over it in detail with you, work as an excellent negotiator to get you the best price for the home and the best terms. Your Real Estate Agent earns his commission by his knowledge and expertise.
Don't go it along..It's a recipe for disaster.
Best of Luck,
David Jaffe SRES, CDPE
The contracts used in real estate transactions which involved a licensed listing agent for a buyer would need to use State required form which you are not licensed to do so. The listing agent can submit your sales offer on the correct form HOWEVER listing agent would now be also your buyers agent
Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
My buyer was honest and told me this. Before I could say anything my buyer told me they were going to us me anyway and wanted to make sure that I received my commission. Let me tell you I worked harder for this buyer and did way beyond extra work. It was a $650k FSBO house that was purchased for $280k and appraised way above the purchase price. I also saved my buyer additional money because how the FSBO Builder seller wanted to put one sided special stipulations in.
If buyers and sellers are honest with experienced realtors and not try to squeeze pennies out of relators they would be better off.
John J. Reinhardt
T 770.475.1130 Ext. 6806
Now if the buyer doesn't have a realtor and buys the same home for $100k. Sellers realtor gets $3,500 and buyer gets his $3,500. Seller receives $93k. Buyer pays $96.5k.
Cut out the middle man and do it yourself.
Everyone's pretty much got this question covered, but I did want to mention that you MUST use a licensed, HUD-registered agent if the property is HUD-owned.
The Campbell Team at RE/MAX Results
Your Biggest Investment is Our Biggest Concern
Web Reference: http://www.BestGeorgiaHomeSearch.com
Just an FYI: Not all real estate licensees are REALTORS. Only those licensees that hold membership in the National Association of REALTORS can claim that title. Whether you choose a licensed agent who is a REALTOR, or one who is not, it is most likely in your best interest not to act as your own agent. In the current market there are many complex issues to nagivate. Wouldn't you consult an accountant for an issue over $100K, or an attorney for an issue over $100K? How much risk are you willing to take with your investment?
Marcie Sands, REALTOR
Simply The Best Real Estate Company, Inc.
You can but when you are on the buying side, you are not responible for paying the Realtor. The seller will pay the Realtor fees at closing. You should ask family or friends for a referral to someone they like and trust. Remember, your Realtor will work very hard to represent you and you will not pay a fee.
The Realtor Referral Assistant
No you can certainly submit your own offer, but I woul dnot recommend representing yourself. It does not cost you anything to have representation as the buyers agent is paid from the proceeds of the sale as agreed in the MLS. Unless you have Real Estate training, you may find yourself unaware of some pitfalls which could cost you more than you think.
Again, this is just my opinion, but there is no reason to represent yourself when you can hire someone for FREE.
Craig Fialkowski, GRI, CDPE