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Dan
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Dan’s Answers (30)
Dan answered:
Alan,
Maybe if they offered a 15% commssion to the buyer's agent? And if that doesn't work take it up to 25%. After all, we all know you always "get what you pay for"!!!!
Maybe if they offered a 15% commssion to the buyer's agent? And if that doesn't work take it up to 25%. After all, we all know you always "get what you pay for"!!!!
So Steve there ya go. Offer 70% commission, list your house for $10,000,000 and watch the "pros" sell it in seconds!!! (Please note the sarcasm).
The whole "you won't get agents bringing their buyers around" is pretty comical. Unless the agent is the one buying the house, the buyer will make the decision on what they want to see and I doubt if how much their agent is going to make is sitting at the top of their list of priorities when they are looking.
It may have made sense 15 years ago when agents could "puppy guard" the listings in the MLS. But nowadays when a home hits the MLS it is automatically flooded to a thousand and one websites that is open to every buyer to see. I guess there is the chance though that an agent is representing one of the six people left in the world who has never heard of the internet. But chances are if you get your listing agent to take great pictures, market it, and if you price it correctly, your home will sell despite the selling agents commission.
The whole "you won't get agents bringing their buyers around" is pretty comical. Unless the agent is the one buying the house, the buyer will make the decision on what they want to see and I doubt if how much their agent is going to make is sitting at the top of their list of priorities when they are looking.
It may have made sense 15 years ago when agents could "puppy guard" the listings in the MLS. But nowadays when a home hits the MLS it is automatically flooded to a thousand and one websites that is open to every buyer to see. I guess there is the chance though that an agent is representing one of the six people left in the world who has never heard of the internet. But chances are if you get your listing agent to take great pictures, market it, and if you price it correctly, your home will sell despite the selling agents commission.
You know JR I would. But I've decided that my 2 weeks of training would be better spent getting a medical license or passng the bar exam. It's all the same right? I'll then be able to charge $300 an hour doing brain surgery!!!
Andre you asked,
"Let’s say there are 5 identical houses in a subdivision but the buyer’s agent has only time to show 3-4 of them, what are the chances that the one with lower commission gets shown?"
If I'm the buyer who's being represented by that agent and the one with a lower commission is one I truly wanted to see? I'd say the chances of me seeing that home are 100%....or I'd get another buyer's agent.
"Let’s say there are 5 identical houses in a subdivision but the buyer’s agent has only time to show 3-4 of them, what are the chances that the one with lower commission gets shown?"
If I'm the buyer who's being represented by that agent and the one with a lower commission is one I truly wanted to see? I'd say the chances of me seeing that home are 100%....or I'd get another buyer's agent.
Karen,
I apologize. I assumed based off the fact that most on here are talking about buyer's agents taking the "cut" in commission that you were referring to the buyer's agent bringing the buyer and a full price offer. If that wasn't your intent, I misunderstood.
I apologize. I assumed based off the fact that most on here are talking about buyer's agents taking the "cut" in commission that you were referring to the buyer's agent bringing the buyer and a full price offer. If that wasn't your intent, I misunderstood.
"If the Realtor were to bring you a full price offer it might just be worth the commission."
Karen, all I can say is "WOW"!!!! If you, representing the buyer, help to bring a full price offer while representing a buyer and that was based on your commission, how in the world can you say you've actually negotiated and represented in your buyer's best interest? And you people wonder why your profession ranks up there with Lawyers and politicians!!! INCREDIBLE!!!!
Karen, all I can say is "WOW"!!!! If you, representing the buyer, help to bring a full price offer while representing a buyer and that was based on your commission, how in the world can you say you've actually negotiated and represented in your buyer's best interest? And you people wonder why your profession ranks up there with Lawyers and politicians!!! INCREDIBLE!!!!
Steve,
From a buyer's standpoint it doesn't really matter. But let me tell you if it's the difference of lowering your price or offering more in commssion, lower your price. A few months ago my wife and I went out with an agent to look at homes. We gave her some we picked and gave her some leeway to "hand-pick" the properties she thought would best suit us. We had no issue with her choosing ones with higher commissions or buyer's agent bonuses. But we did notice a pattern. All of the listings with these special bonuses and higher commission were lacking in some point. Whether it was overpriced ("buyer's agent bonus with full price offer" was often the jargon used), next to a busy road, needed a new roof. Something that made the house a very "hard sale". It finally got to a point that we only agreed to see homes we pulled up and sent to her. If a buyer reaches this point the commission means nothing.
From a buyer's standpoint it doesn't really matter. But let me tell you if it's the difference of lowering your price or offering more in commssion, lower your price. A few months ago my wife and I went out with an agent to look at homes. We gave her some we picked and gave her some leeway to "hand-pick" the properties she thought would best suit us. We had no issue with her choosing ones with higher commissions or buyer's agent bonuses. But we did notice a pattern. All of the listings with these special bonuses and higher commission were lacking in some point. Whether it was overpriced ("buyer's agent bonus with full price offer" was often the jargon used), next to a busy road, needed a new roof. Something that made the house a very "hard sale". It finally got to a point that we only agreed to see homes we pulled up and sent to her. If a buyer reaches this point the commission means nothing.
Sara, and Sarah,
I think what you fail to understand is that, as a buyer, I truly do not care what your annual costs, taxes, advertisement, education, and licensing fees are. Really I don't.
As a buyer, all I care about is whether or not you are the person that I can trust to ensure that I can buy the home that meets my family's needs at the LEAST amount possible. I would like to buy a home this summer.
What does that entail for me. And I will more than likely ask the assistance of an agent. What do I INSIST from my agent.
1) Don't treat me like an idiot. I know that now is a HORRIBLE time to buy a home in my area. At least at current prices. We are just now starting the inevitable decent from our bubble highs that have been felt from San Diego CA to Phoenix AZ, to Miami, FL to Wash DC. My battle cry: "IF IT DOUBLED DURING THE BUBBLE IT WILL FALL" . We have enough data over the last 5 years to make this claim. If you do not agree and feel that some way our area will avoid this fate, then we are not a good match to work together. Find another client that feels that Hampton Roads is different and thinks that a 120% increase in home values in the last 5 years is sustainable here even though they weren't in the rest of the country during a recession!!!
But if you happen to one one of those agents that can look at real data and history, "smell the blood in the water" and can say "hey. now is a crappy time to buy, but I will spend every waking hour putting in "low ball after low ball" offers in for you until you find the home that you are comfortable with." Then I'm your client. And I bet you'll have more buyer clients than you'll know what to do with!!!!
I think what you fail to understand is that, as a buyer, I truly do not care what your annual costs, taxes, advertisement, education, and licensing fees are. Really I don't.
As a buyer, all I care about is whether or not you are the person that I can trust to ensure that I can buy the home that meets my family's needs at the LEAST amount possible. I would like to buy a home this summer.
What does that entail for me. And I will more than likely ask the assistance of an agent. What do I INSIST from my agent.
1) Don't treat me like an idiot. I know that now is a HORRIBLE time to buy a home in my area. At least at current prices. We are just now starting the inevitable decent from our bubble highs that have been felt from San Diego CA to Phoenix AZ, to Miami, FL to Wash DC. My battle cry: "IF IT DOUBLED DURING THE BUBBLE IT WILL FALL" . We have enough data over the last 5 years to make this claim. If you do not agree and feel that some way our area will avoid this fate, then we are not a good match to work together. Find another client that feels that Hampton Roads is different and thinks that a 120% increase in home values in the last 5 years is sustainable here even though they weren't in the rest of the country during a recession!!!
But if you happen to one one of those agents that can look at real data and history, "smell the blood in the water" and can say "hey. now is a crappy time to buy, but I will spend every waking hour putting in "low ball after low ball" offers in for you until you find the home that you are comfortable with." Then I'm your client. And I bet you'll have more buyer clients than you'll know what to do with!!!!
Sarah,
$1000 to drive up to a house, pull a key out of the "magic box" and open a door? Yeah, I'll bring my checkbook. Now I'm not suggesting that that's all you do but in your scenario if you looked to be handed a $1000 check just to look at houses most buyers will tell you to go "pound sand". You see, it's real easy to have an inflated idea as to how much you think your worth. But the only thing that matters is what a potential client who's actually going to shell out the money to pay you thinks your worth.
I too could sit here all day, "crunch" some numbers based off what I think I'm worth. I could then storm into my boss' office and show him how much more he needs to pay me for my services. He may give it to me. But the more likely scenario is that he would tell me to get back to work with the understanding that I'm free to walk off and find that dream job whenever I want. I'm sure you're free to do the same.
$1000 to drive up to a house, pull a key out of the "magic box" and open a door? Yeah, I'll bring my checkbook. Now I'm not suggesting that that's all you do but in your scenario if you looked to be handed a $1000 check just to look at houses most buyers will tell you to go "pound sand". You see, it's real easy to have an inflated idea as to how much you think your worth. But the only thing that matters is what a potential client who's actually going to shell out the money to pay you thinks your worth.
I too could sit here all day, "crunch" some numbers based off what I think I'm worth. I could then storm into my boss' office and show him how much more he needs to pay me for my services. He may give it to me. But the more likely scenario is that he would tell me to get back to work with the understanding that I'm free to walk off and find that dream job whenever I want. I'm sure you're free to do the same.
Hey Robert,
How about showing all of them and letting the BUYER, you know the one you're so-called "ethics" states you should be representing in good faith decide what he/she wants to buy. I know, silly concept.
How about showing all of them and letting the BUYER, you know the one you're so-called "ethics" states you should be representing in good faith decide what he/she wants to buy. I know, silly concept.
Sarah,
The "pyramid scheme" that I was referring to was the one that most of the country went through between 2003 and 2008. The one in which Buyer A buys home for $130K, no money down, turns and sells it a year later for 185K to another shmuck with no money down, who then in turn sells it for 285K 6 months later to another shmuck with no money down who then sells.....well you get the picture. You may remember it. It was all over the news, brought down an entire global economy? All along agents, brokers, bankers, appraisers, underwriters, day traders all making money "hand over fist".
Pyramid schemes are illegal mostly because it can never sustain itelf. It always has to have that next entry, in this case, that next buyer to pay the amount necessary to let the guys (the home sellers) cash out. All pyramid schemes fail. We are at that point.
My point to you and your rant on buyers and compensation is that instead of screaming at the next set of buyers because they refuse to jump in at the bottom how about changing the approach? And this advice is for all agents and I believe I speak for many a potential buyer. The next time someone wanting to list a home calls you and says "hey, I bought this house in 2007 for $285K, I'd like you to list it for 375K". Tell them very politely "No, the market will not hold that home for that kind of price and I refuse to waste my precious time and money marketing it. Now if you want to pay me hourly, I'd be glad to list it for whatever you want." Now if EVERY agent were to do this we may start to see some form of stability in this market.
I guess as a buyer I just wonder why, if everything is so even between sellers and buyers from an agent's stand point, was it so easy to ask buyers to bid 30%-40% more than asking price on homes 3 short years ago, yet asking sellers to list homes reasonably now is just unheard of?
The "pyramid scheme" that I was referring to was the one that most of the country went through between 2003 and 2008. The one in which Buyer A buys home for $130K, no money down, turns and sells it a year later for 185K to another shmuck with no money down, who then in turn sells it for 285K 6 months later to another shmuck with no money down who then sells.....well you get the picture. You may remember it. It was all over the news, brought down an entire global economy? All along agents, brokers, bankers, appraisers, underwriters, day traders all making money "hand over fist".
Pyramid schemes are illegal mostly because it can never sustain itelf. It always has to have that next entry, in this case, that next buyer to pay the amount necessary to let the guys (the home sellers) cash out. All pyramid schemes fail. We are at that point.
My point to you and your rant on buyers and compensation is that instead of screaming at the next set of buyers because they refuse to jump in at the bottom how about changing the approach? And this advice is for all agents and I believe I speak for many a potential buyer. The next time someone wanting to list a home calls you and says "hey, I bought this house in 2007 for $285K, I'd like you to list it for 375K". Tell them very politely "No, the market will not hold that home for that kind of price and I refuse to waste my precious time and money marketing it. Now if you want to pay me hourly, I'd be glad to list it for whatever you want." Now if EVERY agent were to do this we may start to see some form of stability in this market.
I guess as a buyer I just wonder why, if everything is so even between sellers and buyers from an agent's stand point, was it so easy to ask buyers to bid 30%-40% more than asking price on homes 3 short years ago, yet asking sellers to list homes reasonably now is just unheard of?
No Sarah, I'm not mad at all. A little disheartened because I'd like to be a homowner again. I've spent the last 2 years looking at possibly buying a decent home for my family. I've bought and sold two over the years and thoroughly enjoyed homeownership and never had a SINGLE problem with my agents..
I do think it's funny how when the "pyramid scheme" was in full force there was never any talk of "hourly based" compensation for agents. But now that they can't seem to find the next set of buyers to enter at the bottom and let those others "cash out" at the top, NOW we have to change the rules.
I also find it funny that the buyers are always dragged through the mud on here and belittled as "looky lous" just out there wasting everyone's precious time but did it ever occur to you how much is wasted on the buyer's side? You wouldn't find it a little frustrating to hear agents scream "It's a great time to buy jump in the car and let's go". Just to get dragged around for 2 days to wade through a bunch of overpriced "junk" that's been sitting on the market for 6 months. Then to have your trusted agent say "geez, this home has been on the market for 10 months, I betcha we could get them to pay some closing cost with a full price offer."
Excuse me if after working for 20 years, saving up a decent down payment and keeping my credit score all nice and tidy if I'm not interested in $250K "starter homes". But keeping buyers are the problem.
I do think it's funny how when the "pyramid scheme" was in full force there was never any talk of "hourly based" compensation for agents. But now that they can't seem to find the next set of buyers to enter at the bottom and let those others "cash out" at the top, NOW we have to change the rules.
I also find it funny that the buyers are always dragged through the mud on here and belittled as "looky lous" just out there wasting everyone's precious time but did it ever occur to you how much is wasted on the buyer's side? You wouldn't find it a little frustrating to hear agents scream "It's a great time to buy jump in the car and let's go". Just to get dragged around for 2 days to wade through a bunch of overpriced "junk" that's been sitting on the market for 6 months. Then to have your trusted agent say "geez, this home has been on the market for 10 months, I betcha we could get them to pay some closing cost with a full price offer."
Excuse me if after working for 20 years, saving up a decent down payment and keeping my credit score all nice and tidy if I'm not interested in $250K "starter homes". But keeping buyers are the problem.
Sarah,
Agent's services are free to buyers right? If I'm not paying it then it's no concern to me.
Agent's services are free to buyers right? If I'm not paying it then it's no concern to me.
I'm sorry Sherry, I was under the impression that part of a buyer's agent's job and expertise was to ensure they paid the least possible price for a home. If it's not, I stand corrected.
Yes rockinblu, I've heard that argument before too. But that doesn't show the big picture. Let me give a hyypothetical scenario:
An older lady passes away and leaves her home in Florida to her granddaughter. The granddaugher lives in New York and has no desire to move to Florida because she has an intense fear of alligators. The home is in pristine condition in an upscale neighborhood. The granddaughter lists the home for 300K but more important than price, the granddaughter just wants a quick sale. So an agent comes along with a buyer, the buyer loves the home and agrees to purchase it at full price and will put in an offer the next day. That night while at the gorcery store the agent happens to hear the granddaughter, the seller of the home, casually tallking about the property and hears her tell someone that she hates Florida and will be willing to let that house go for 150K just to get it out of her hair. The buyer's agent also has 8 homes, identical to it listed in the same neighborhood. Does the buyer's agent run back and tell their buyer the good news that she would be willing to accept 150K and there will be no reason to offer full price? Now all of a sudden the commission to possibly lose is $2250 plus that beautiful home sold at 150K now becomes a "comp" against her 8 other 300K priced homes. Now we're talking real money. In a situation like that how strong do you think that "Code of Ethics" will be?
An older lady passes away and leaves her home in Florida to her granddaughter. The granddaugher lives in New York and has no desire to move to Florida because she has an intense fear of alligators. The home is in pristine condition in an upscale neighborhood. The granddaughter lists the home for 300K but more important than price, the granddaughter just wants a quick sale. So an agent comes along with a buyer, the buyer loves the home and agrees to purchase it at full price and will put in an offer the next day. That night while at the gorcery store the agent happens to hear the granddaughter, the seller of the home, casually tallking about the property and hears her tell someone that she hates Florida and will be willing to let that house go for 150K just to get it out of her hair. The buyer's agent also has 8 homes, identical to it listed in the same neighborhood. Does the buyer's agent run back and tell their buyer the good news that she would be willing to accept 150K and there will be no reason to offer full price? Now all of a sudden the commission to possibly lose is $2250 plus that beautiful home sold at 150K now becomes a "comp" against her 8 other 300K priced homes. Now we're talking real money. In a situation like that how strong do you think that "Code of Ethics" will be?
"What other industry allows the public to take advantage of a professional's time, money, knowledge, and liability without ANY guarantee of compensation?!?"
And to answer Sara's question: Car Salesmen, Insurance Salesmen, Amway Salesmen, Mary Kay Reps, and anybody else who has decided to make their living in sales and commission. This is the third "rant" I've read that's been posted with this "I'm tired of my clients wasting my time we should be paid an hourly wage". If it looks to be so much more lucrative to do it that way then by all means, do it. But quit screaming about how clients are wasting your time. It's your job. You don't like it find another line of work already!!!!
And to answer Sara's question: Car Salesmen, Insurance Salesmen, Amway Salesmen, Mary Kay Reps, and anybody else who has decided to make their living in sales and commission. This is the third "rant" I've read that's been posted with this "I'm tired of my clients wasting my time we should be paid an hourly wage". If it looks to be so much more lucrative to do it that way then by all means, do it. But quit screaming about how clients are wasting your time. It's your job. You don't like it find another line of work already!!!!
"If it's so difficult and so many of you are indeed that knowledgeable, how did it come to be that so many current home owners overpaid for their homes? It wouldn't have ANYTHING to do with commission now, would it?"
Justaskin', I've been asking this question for a while now. You'll never get an answer from the experts.. Heck you won't even get a response. It's as if we're supposed to forget the last 5 years ever existed.
By the way, seeing that the buyer's agent gets paid more when their "client" PAYS more, what's the assurance that a buyer is getting the utmost representation in a real estate transaction? Oh that's right, the old "Code Of Ethics". the same code of ethics that most of you believe can be tossed aside (you know slide that listing at the bottom) if the commission isn't big enough. I know you guys think we are all idiots but you guys do realize that most prospective buyers and sellers can read right? GEEEZ!!!!
Justaskin', I've been asking this question for a while now. You'll never get an answer from the experts.. Heck you won't even get a response. It's as if we're supposed to forget the last 5 years ever existed.
By the way, seeing that the buyer's agent gets paid more when their "client" PAYS more, what's the assurance that a buyer is getting the utmost representation in a real estate transaction? Oh that's right, the old "Code Of Ethics". the same code of ethics that most of you believe can be tossed aside (you know slide that listing at the bottom) if the commission isn't big enough. I know you guys think we are all idiots but you guys do realize that most prospective buyers and sellers can read right? GEEEZ!!!!
Dan answered:
I was assuming that Concerned Mom had already decided that she was going to purchase. My opinion is that if you can't afford what you want you're better off renting than to buy, hold, sell and try to "move up" later.
Vicki, it may not sound like it but I agree with you. If you're not in it for the long haul, (and I mean LOOOONG haul) you're better off just not taking the plunge.
Vicki, it may not sound like it but I agree with you. If you're not in it for the long haul, (and I mean LOOOONG haul) you're better off just not taking the plunge.
My opinion is to buy something you absolutely LOVE and stay in it for 30 years even if it means you have to stretch. Make no mistake about it. There is currently no such thing as a "move up" market and won't be for a very long time. In order for a "move up" market to exist, homes have to show appreciation. That will be a long time coming.
Dan answered:
I think another part of the equation that doesn't get enough attention is the trust/credibility issues the industry is facing. Let's face it,.wWen you hear that prices are dropping 30%-40% means only one thing....people overpaid for houses by 30%-40%. Now I know that's a very simple view but think about it. 10 years ago when you bought a house you had faith that the mortgage broker was not going to qualify you for me than you could afford. The bank certainly wasn't going to lend you more than you could afford to pay back, The appraiser, working with a sense of integrity, certainly wasn't going to value the house for more than it was worth, and that buyer's agent with all there due diligence and ethics certainly wasn't going to allow you to pay more than the house was worth. We all know what happened. Greed permiated the system and no one has shown anywhere that the problem has been resolved or even addressed. Until that happens, buyers will be rightfully skeptical.
Ok, we have no found the culprit!!! It's not that easy lending led to over-inflated prices, the recession, loss of jobs, buyer's confidence in a system that brought a global economy to it's knees, or even foreclosures. It's the stupid, uninformed buyers!!!
Did I mention you get an $8,000 tax credit if you buy? Maybe I should say it slower for you stupid uninformed buyers!!!
NEWSFLASH!!!! BUYERS KNOW ABOUT THE DANG CREDIT!!!!
Did I mention you get an $8,000 tax credit if you buy? Maybe I should say it slower for you stupid uninformed buyers!!!
NEWSFLASH!!!! BUYERS KNOW ABOUT THE DANG CREDIT!!!!
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