1) RE contracts in OR are fixed regardless of the property you buy
2) The information on comps, etc, is a few clicks away plus subsequent drive-by to verify
3) All of the heavy lifting around the sales contract is done by the appraiser and the title company for which they charge around $500 and $1000, respectively
4) A buyer's agent in OR adds value under limited circumstances: for out-of-towners who need advice on trends and neighborhoods, and for first-timers who need re-assurance in the process. Both of these are undeniably value-added services.
5) A seller's agent CAN add a lot of value if they are any good by properly indicating cosmetic improvements, packaging and promoting the property, and being honest with their customer on what the market will bear. This is a service that, when provided properly, is well worth 2-3% of the property value. Taking a few lousy images of the property, hosting an agent's tour and an open house or two does not rise to that level (BTW, a course on basic photography, proper use of a wide-angle lens and color balancing should be a mandatory :-)
6) A motivated DIY-er who knows the neighborhood(s) they want and is willing to drive themselves around has very little to gain from a buyer's agent, particularly in the presence of sites such as Trulia, Redfin, etc, that as best as I can tell include everything that I have seen on RE agent sites when I have been their customer and add a lot of value-added functionality such as links to street views, statistics for the neighborhood, etc.
For anyone willing to rebut any/all these points with specific facts and examples, I will gladly engage in a factual debate. And finally, I never said that RE agents do not deserve to be paid. My assertion is that the average payment on the buyer's side is grossly out of proportion to the services rendered. To prove otherwise would require that those in the business disclose how many hours they spend on a typical transaction by breaking it down in two categories --- driving the clients around and actually doing work related to the transaction (research, comp analysis, etc). Only then we can then make a conclusion on how the hourly rate relates to other professional services.
I'm going to assume you are an intelligent person with good intuitions.....I'm sure you will be able to tell if you are working with a good Realtor or not. A good one is going to know their facts, present them well, and help you get the best price and terms possible for a new home purchase. Use one! Do not sign a buyer/broker agreement and you can switch agents any time you feel you are not being serviced correctly....even if you are in escrow, if you feel misrepresented, you can contact the agent's broker to help you further.
That being said....the entire sales commission is paid by the seller....unless something is disclosed to you up front or in a counter offer. (I've seen a few short sales where the bank has slashed commissions and the listing agent tries to recoup by asking the buyer to pay....but this is very clear). If the listing is handled by a listing agent, then ALWAYS use your own agent, the listing agent will get the full commission if you don't and has a first duty to represent the SELLER....NOT YOU. Have someone on your side.
And use your judgement about who that should be...as with most forums, only those consumers with bad experiences spend the time to complain about it....those who are happy are too busy being satisfied to hang out and berate an industry. :)
I am sure that may of the RE professionals that have responded to this thread will disagree with my opinion. I would be perfectly OK being discredited as someone who does not know what they are talking about, but that would require that the licensed professionals who post here provide specific advice on how they can make a difference. And let's stay away from the trivial examples of providing advice on neighborhoods. The assumption of my post is that the buyer is a DIY-er who is willing to do the legwork with respect to neighborhoods and schools.
The contract between listing agent and the seller may specify that the agent will reduce their comission if they are getting both sides, or it may not. A listing agent may also be willing to reduce their comission to increase the "net gain" to the seller to make the deal go through, or they might not.
However as a buyer you just pay whatever price you want and hope your offer is accepted, weather you have a buyer's agent or not doesn't change this.
You do not have to pay your Buyers agents commision. The Buyers Agents commision is paid by the seller.
I hope this helps!
East Metro Specialist
You as a buyer should not be required to pay a real estate commission. The real estate commission should be paid by the seller. The seller has a realtor working for him, and you should have one working for you..
Happy House Hunting!
Why would you want to...why not have professional representation since it's free to you! The wise answer would be use a qualified agent to your benefit. Remember to, that a licensed agent carries EEO insurance that covers errors that may be made in a transaction that you do not have. Want more info...contact me at 503-887-5323 or email@example.com.
Listings agents typically love it when a home buyer tries to buy the home themselves because they can control the transaction for their clients. Not having representation puts you at a great disadvantage unless you are very knowledgeable of the market in your area. Even if you are able to get the listing agent to give up some of the sellers commission that was for the buyers agent you could end up paying a lot more in the end. So unless you have experience in all aspects of the purchase transaction your best interests will be served by using an experienced agent.
From what I understand of a few other states as well as in my own state (California), the Seller usually pays the commission. There are other circumstances that could alter that such as a Buyer/Broker Agreement specifying terms of the relationship.
Mostly commonly the large part of the fee is paid by the Seller, there may be a small percentage that is due from the Buyer. There are no set percentages and there are always exceptions to the rule.
Having a REALTOR looking out for your best interest is the most important thing. I personally became a agent then a broker because I purchased my home without the assistance of a REALTOR. Bg mistake!!!!!
We live in the state of Oregon which allows agents to represent both sides of one transaction, the buyer and the seller. The listing agent may, or may not represent you. You would have to request the listing agent for representation. Some agents will, or won't since this can be a conflict of interest and some agents feel uncomfortable representing both sides with priveledged information.
However, if you have your own agent, or you use the listing agent to represent you-the commission to represent the buyer is paid by the seller.
I alway reccomend using your own Buyers Agent- who is unbiased and works only for your interests.
I hope this helps!
I agree that you should always use a good realtor unless you are very proficient in all aspects of the transaction.
I did buy without one when the market was hot and told the realtor that she could negotiate her 6% with the buyer but my price was not moving an inch. I think that I induced her to decide whether to convince the seller to take the offer, or lower the commission. In the end she took the deal and the 6%. Do I think I saved a couple of thousand dollars.........yes maybe!
However, if you do not know what to look out for it can cost you much more than that..
The fee is usually charged to the seller. He usually takes a 6% commision and splits that with the buyers realtor. If the buyer has no realtor, he usually keeps the 6%. As a buyer you are not being charged a fee by anyone so not using one you are still not being charged a fee.
If you are buying a new built home without a realtor and about 50% of people do it this way you are still paying that commission. Home Builders do not discount a home further if you are going it alone. Many Builder sales representatives have stated this as a fact right here on Trulia and Zillow. I would say that if you are considering a new build you would definitely want to use a Realtor as they can pull comps so you know what to offer.
Builders are less likely to negotiate but if you have hard facts from the MLS about similar sales you will have a better chance of getting a price reduction. Most builder sales are not in the local MLS so you will want to look at resales in the subdivision and newer homes nearby.
Good luck to you.
If you had to appear in court on a serious criminal charge would you defend yourself or find the best attorney that you can afford.?
if you broke your leg would you go to the pharmacy and get aspirin or would you seek out the best doctor that you could afford.?
I am sure that you would do the best to protect yourself.
Just like in any other profession there are great realtors good realtors and not so good ones and awful ones. If you get a good one they are worth their weight in gold. If you get a bad one it will feel worse than using aspirin to heal a broken leg.
Do your due dilligence and ask friends neighbors and coworkers for referrals and recommendations. Interview the realtors like you would interview someone who was going to be handling the biggest financial investment of your life.......because that is what they are actually doing.
In most cases the seller will be paying for their services anyway.
Most contracts b/t realtor and seller proivde a clause that sttates that if a buiyer returnes to the property after the expiration date, the seller remiains iable for a comission foir a period of1 180 days (6 montths) . Should you choose not to use a buyers agent, the stated comission willl go to the listing agent . . . . bottom line comission is paid either way. Rarely is there anty savings to the buyerm by not usinga Realtor.
In my view, it would be in your best interests to use a buyers' Realtor as they would most approipriately represent your wants and needs and fight for the lowest possible price.
Just today, I had a listing agent unconventtionally show up at my buyers home inspection wherein she indicated that a CofO was not necessary. In my view, this property is devoid of the necessary fire protection devices as per the townshipo's ordinances.
So, as a buyers agent, I have another fight on my hands to ensure that mt client is protected. Had I not been there, the buyer would have bought into the no inspection needed ascertiuon.
Yoyg can certainly givei it a go, byt it mught certainly COST uin\\ the long term.
Francesca Patrizio, Realtor, ePro, SRES
Coldwell Banker Residential Brokerage
DIRECT/CELL: 732.606.2931 (24/7)
NJAR Circle of Excellence '06, '07
Million Dollar Sales & Marketed '06 - '08
â€œTOP TENâ€ in Units CLOSED â€“ 2009
Yeah, you know; it's only a conversation when there's another person involved.
- Nor is it a disputable fact that when most RE agents selling $200-$300k homes are driving around in $50k+ luxury cars there is something incommensurate between value delivered and value received.
This, Groovy Geek, is a good example of mudslinging - throwing handfuls of loosely-crafted jumbles of words at a target with the objective of simply making a mess.
All the best,
I assume that in their desire to protect customers from overpaying, the vast majority of RE agents in the US have sold zero properties in the past few years? Because any advice to buy during that time frame would have been a dereliction of fiduciary obligation to the customer, right?
I will be the first one to admit that the above is an unfair accusation because bubbles are always "obvious" in retrospect (though there were plenty of people who were sounding the alarm bells on this one, most of them from outside the industry). However, this does not negate the fact that while RE agents may be well informed on "what the market will bear today", they are not necessarily aware of what the fair economic value of a property is. Or that many continue to deceive their customers by stating that "there has never been a better time to buy".
The question of true economic value is rather simple, and requires a comparison of the long-term valuation AND inflation trends, both of which can be had for free from Case-Schiller and the Bureau of Labor, respectively. For the specific case of Portland one can get the historical inflation rates from here
It is then a simple exercise to compute that a house that the fair value of a house that used to cost $100k in 1990 today is around $173k, or that a house costing $100k in 2000 should cost around $130k today. It is also a fairly straightforward to dig up historical price trends showing that a house that sold for $100k in 2000 actually sells for around $160k now. The data is rather clear-cut that the statement "there has never been a better time to buy" is not in the best interest of the customer, yet there are scores and scores of Portland RE agents who make precisely that claim, all it takes is a quick Google search to find them.
Last but not least, buying an asset whose value is inversely-related to interest rates at a time of historical lows is a sucker's proposition. This is true whether you are buying bonds or a house. Every 0.5% upward move in interest rates is equivalent to about 5% reduction in the market value of a home. Buying today without the expectation of staying in the home for a decade or more is a sure-fire way to be underwater when trying to sell 5 years later.
Yes, the purchase of a primary home is more than a spreadsheet exercise, and is not subject to the same dollars-and-cents review that one should subject other investments. However, it is an undeniable fact that the house is often the largest asset owned by most, and that by not educating their customers on the economic realities most RE agents are not providing BUYERS a service that is worth anything close to the 3% they charge. Nor is it a disputable fact that when most RE agents selling $200-$300k homes are driving around in $50k+ luxury cars there is something incommensurate between value delivered and value received.
I think that if your criteria for evaluating information includes whether it is "self-serving," you are going to make a huge amount of mistakes in judgement.
- For anyone willing to rebut any/all these points with specific facts and examples, I will gladly engage in a factual debate.
Whether you engage or not is up to you. My assertion, without specific facts and examples, is that you have a good recipe for overpaying for or underselling a property.
What you do with that assertion is also up to you.
In real estate sales, the norm does not seem to live up to very high standards. In addition to Groovy's 5 portland agents, I can throw in about a dozen New York agents, and Im just one seller. Im sure as you ask other seller's and buyer's the list will grow to encompass a very large portion of real estate agents in the US.
Sorry for being a little facetious.....you had to know your response would make a few people a little unhappy though. In any line of work you explore - you're going to find some people that do/don't do things that spoil the reputation of all if you choose to let it. The key is to not accept that as the norm and go find someone that is doing a great job to work with. The choice is yours.
Typically a buyer's agent gets their fees paid by the listing agent (it is specified as the BAC in the listing on MLS - BAC = Buyer's Agent Compensation.
Of course, the inverse of this question is a different story - can I get compensated with a fee if I do not have an agent and am unrepresented? Now Jenerra, trust me, I know that is a different question that what you asked. But bear with me for the sake of completing this answer, the answer to the 2nd question is "No, you have to be licensed in the state of Oregon to receive a commission for real estate services."
I wholeheartedly agree with the other real estate professionals on this board - as a buyer you should never go into a transaction without a real estate professional looking out for your best interests. They will help you find a property, will complete a CMA (comparative marketing analysis) to determine the appropriate value, the will write the offer, educate you on the process, negotiation the deal, work with you on the inspection, negotiate repairs (including recommending contractors to assess the impact of magnitude of said repairs), and will project manage the deal through a successful close (including working with the lender, the title/escrow fees, etc.). When it is all said and done, every home buyer should have a Realtor on their side and their fees are typically covered by the listing agent - even better for the buyer! Hope this helps!
As a "buyer" it is customary to NOT pay any fees for professional services. This is normally paid for buy the seller of the property.
So do not hesitate to find an agent to support your real estate interests..........
Happy house hunting
I am sure you know by now that you don't pay a fee if you buy a home WITHOUT a Realtor, and you would only pay a fee to a Buyer's Broker if you have a Buyer-Broker Agreement- which would usually only come into play if you were to purchase a home when no cooperative buyer agent fee is offered by the listing broker or the unrepresented seller.
:A Word of Advice; it is never in your best interest to purchase a home as an unrepresented buyer. There are too many risks and ways for a buyer to be taken advantage of in a real estate transaction; sometimes not intentionally but still there may be details that you, as a buyer may not know to ask about. There are many details a Buyer's Agent will be sure to cover on your behalf; the Realtor you choose must enter into a fiduciary agreement with you to look out for your best interests throughout the entire transaction.
If you are looking for an professional representative , you should consider a Realtor who has a high level of customer service, willing to go the extra mile on your behalf. For instance, if you would like recommendations of my service and an interview with some of my clients please feel free to ask. In the mean time, you can go to http://www.qualityservice.org. Add my name and Portland, Or as the city. You will see that I have a perfect 5 rating and have been awarded the Platinum service award.
I wish you well with the search for the right agent. Of coarse I would love to help you; however, there are several other good agents to choose from right here on Trulia. You can check our profiles and contact us for interviews if you so choose as you look for the right one to serve you.
Best of home buying to you!
June Lizotte, Realtor
Providing REAL Service
Prudential NW Properties
6400 SE Lake Rd., Suite 200
Portland, OR 97222
firstname.lastname@example.org- email me directly
503-310-8032 - call me directly
I have been a Realtor for 12 years now and the only time a Buyer ever paid a fee for my services was when we found a FSBO who flat out refused to pay more than $1000 in commission. My Buyers knew how hard I had worked for them (they relocated here) in locating and narrowing down properties as well as helping them with their transition to our city and decided to pay me an extra amount (although I had NA on the form of the Buyer Agency Agreement that detailed the commission they would owe me).
I recommend to all my friends and family to be represented in every transaction.
Real Estate Broker & Residential/Commercial Loan Officer
Commonwealth Real Estate Co. & Sunset Mortgage Co.
In most cases, from the buyer's perspective, the Realtor who represents you is paid by the seller via the listing agent's broker.
I would suggest that you sit down and talk with the Realtor that you select as your representative and ask for an estimate of funds required to purchase a property. This will also provide you with an opportunity to see if you and the Realtor get along.
If the listing is in the local MLS, most (99%+) buyers are not charged a commission. The commission to the listing and buyer's agent is paid by the seller. So, if you have the listing agent write the offer on your behalf, he/she may keep all the sales commission paid by the seller (depending on the agreement between the seller and the listing agent). They aren't necessarily obligated to reduce the total commission if a buyer's agent is not involved.