why do I need a realtor to BUY?

[DementedReality]

with all due respect to the host of this forum, i hope this is an ok subject matter.

so tell me, why do i need a realtor to buy a place? sure, its framed that it doesnt cost me anything, but clearly it does because the seller signs a contract agreeing to pay my realtor, so there is a cost built in there.

from what i can tell:

1) they set up showings
so, why cant i call realtors directly for access to their listings?
2) they do the paperwork on the contract
the paperwork is a bunch of fill in the blanks, why is the seller paying them on my behalf to do this work?
3) they speak for me to the other realtor when i make an offer
i negotiate for a living and feel quite confident in my own ability to do such negotiating

i think the system is gamed to ensure the life cycle of a realtor. other then the experience of previous negotiations, i dont know what i need a realtor for when i am buying. i would prefer the seller knock off the cost of the buying commission and if i need real estate advice, i can pay a consulting fee for that advice.

i guess i am just not that impressed with the real estate system. i am not looking to turn this into a bash realtors thread, but would like some concrete discussion on why the system has to be set up the way it is.

i will get into the specifics of my circumstances as the feedback comes in, wanted to keep this more general for now.

[speede5]

You don't need a realtor, but if it is listed with one you will have to deal with their's. They will end up 'acting' on both parties behalf. No realtor will let you view a property without either your own realtor or themselves present, which is reasonable.

A good realtor will ensure you include everything you are entitled to in an offer to purchase, and ensure you get everything you paid for at possesion. You would be amazed at the crap sellers will leave behind and what they will take.

You don't need a lawyer either, but try processing your sale through land titles, or getting the bank to release funds to you without one.

If your buying, you don't usually save a whole lot bypassing a realtor, and they can find out a lot more about a property than you can, plus they have the inside track on new listings, exclusives, etc.

Selling is different, the hot markets we have had in recent years have made everyone think they don't need a realtor, and for the most part they haven't, but as times get tougher it is a lot easier to let a pro sell your house than yourself. I have done both, and selling is not my forte. Luckily I have arealtor friend who cuts me awesome deals on commision, so I have reverted to him and doubt I will try again on my own. FYI twice I have tried to sell private and gotten what I wanted in my pocket by using a realtor after failed attempts.

Selling on your own brings out all the tire kickers, nosy neighbors, etc. Realtors can bring in the same but for the most part they bring in buyers, and they deal with all the bs.

[DementedReality]

You don't need a realtor, but if it is listed with one you will have to deal with their's. They will end up 'acting' on both parties behalf. No realtor will let you view a property without either your own realtor or themselves present, which is reasonable. .


why is the that reasonable? the selling realtor shouldnt get both halves of the commission if i dont need their services.

ok, sure if i am the seller, i want MY realtor at the house, both to market the property but of course to ensure my belongings are safe.

but i still fail to see why i need a realtor, other then the system has been gamed to make sure that i cant get access to anything without one.

[Travis Munroe]

No issues with the thread what so ever. As a matter of fact, those are all very legitimate questions that are raised often.

Keep in mind that no 2 purchases are the same. There are often problems that arise throughout the process that your real estate agent has seen before. If you were not working with an agent then chances are you would end up paying more to your real estate lawyer for advice.
By calling the list agent directly you are not avoiding commissions on the buying side. You are giving both commissions to the list agent.
If you call a list agent for the property on 17th ave we have discussed as being a hidden train wreck then he can have you sign off as a customer (instead of client) and owe you no fiduciary duties. It is now 100% your responsibility to do all the homework. This can take hours of your time for something that would have taken me 3 minutes.
Some recent examples of how a Realtor makes things easier:
- Client just had their property go C/S. Monday i drove across town to drop off condo documents in Midnapore. We realized that many were missing and we had to have everything in within 24 hours. I ordered the documents and drove to the other end of town to pick them up. Now I had to drive back out to Midnapore to deliver the remaining documents completing the package.
There is obviously way more to this deal however that was a un foreseen circumstance that my client would have had to take the day from work to accomplish had I not been working for them.
- A friend/buyer just purchased a foreclosure downtown. Its a remarkable place and was had for under 200k. The process to buy a foreclosure is significantly different and designed to protect the bank and not the buyer. I ensured all efforts were taken so that my friend was protected and that he got the place well below market value. By viewing places in advance I was able to save him the time viewing 30 places and narrow it down to a handful based on his criteria.
- Right now I am working with a buyer looking to purchase another foreclosure. This involves me going to the court house on a specific day and waiting around from 9am to 12pm until the specific property is addressed. Throughout the process there are a number of things this buyer is/was not sure of. I think it would be fair to say he would not even be in contention for this property had he not been working with a Realtor/myself.

I think the easiest way to look at it is that the seller is paying the list agent the full commission's. The list agent then determines what of his offered commission will go towards someone who brings him a buyer.(should always be equal or greater IMO)
If you look at it this way then you will have to see if you are happy with the service being provided by the list agent. If you are a solo buyer then you need to accept the fact that the seller has paid that agent to sell their property and this is not something you can use as a negotiating tactic.
I understand those who try to sell on their own (although a very high percentage end up switching to a Realtor after exhausting time and money) as they see the potential to save however I really think that it should be a no brainer to use a Realtor when buying a property.


PS: I am not a writer so lets not discuss the flow or lack of in this post lol.

[Travis Munroe]

You don't need a realtor, but if it is listed with one you will have to deal with their's. They will end up 'acting' on both parties behalf. No realtor will let you view a property without either your own realtor or themselves present, which is reasonable.

A good realtor will ensure you include everything you are entitled to in an offer to purchase, and ensure you get everything you paid for at possesion. You would be amazed at the crap sellers will leave behind and what they will take.

You don't need a lawyer either, but try processing your sale through land titles, or getting the bank to release funds to you without one.

If your buying, you don't usually save a whole lot bypassing a realtor, and they can find out a lot more about a property than you can, plus they have the inside track on new listings, exclusives, etc.

Selling is different, the hot markets we have had in recent years have made everyone think they don't need a realtor, and for the most part they haven't, but as times get tougher it is a lot easier to let a pro sell your house than yourself. I have done both, and selling is not my forte. Luckily I have arealtor friend who cuts me awesome deals on commision, so I have reverted to him and doubt I will try again on my own. FYI twice I have tried to sell private and gotten what I wanted in my pocket by using a realtor after failed attempts.

Selling on your own brings out all the tire kickers, nosy neighbors, etc. Realtors can bring in the same but for the most part they bring in buyers, and they deal with all the bs.

Well put, and you are correct about dealing with the bs however it is mostly behind closed doors so it appears that nothing is being done.

Just to add to my post. I think the biggest advantage to hiring a Realtor is to save you time (and time is money) along with bringing their knowledge of the city/buildings/rules to the table.
Add up all the time built into a single transaction from showings to closing work and you quickly see the benefits of hiring a Realtor.

[DementedReality]

No issues with the thread what so ever. As a matter of fact, those are all very legitimate questions that are raised often.

Keep in mind that no 2 purchases are the same. There are often problems that arise throughout the process that your real estate agent has seen before. If you were not working with an agent then chances are you would end up paying more to your real estate lawyer for advice.
By calling the list agent directly you are not avoiding commissions on the buying side. You are giving both commissions to the list agent.
If you call a list agent for the property on 17th ave we have discussed as being a hidden train wreck then he can have you sign off as a customer (instead of client) and owe you no fiduciary duties. It is now 100% your responsibility to do all the homework. This can take hours of your time for something that would have taken me 3 minutes.
Some recent examples of how a Realtor makes things easier:
- Client just had their property go C/S. Monday i drove across town to drop off condo documents in Midnapore. We realized that many were missing and we had to have everything in within 24 hours. I ordered the documents and drove to the other end of town to pick them up. Now I had to drive back out to Midnapore to deliver the remaining documents completing the package.
There is obviously way more to this deal however that was a un foreseen circumstance that my client would have had to take the day from work to accomplish had I not been working for them.
- A friend/buyer just purchased a foreclosure downtown. Its a remarkable place and was had for under 200k. The process to buy a foreclosure is significantly different and designed to protect the bank and not the buyer. I ensured all efforts were taken so that my friend was protected and that he got the place well below market value. By viewing places in advance I was able to save him the time viewing 30 places and narrow it down to a handful based on his criteria.
- Right now I am working with a buyer looking to purchase another foreclosure. This involves me going to the court house on a specific day and waiting around from 9am to 12pm until the specific property is addressed. Throughout the process there are a number of things this buyer is/was not sure of. I think it would be fair to say he would not even be in contention for this property had he not been working with a Realtor/myself.

I think the easiest way to look at it is that the seller is paying the list agent the full commission's. The list agent then determines what of his offered commission will go towards someone who brings him a buyer.(should always be equal or greater IMO)
If you look at it this way then you will have to see if you are happy with the service being provided by the list agent. If you are a solo buyer then you need to accept the fact that the seller has paid that agent to sell their property and this is not something you can use as a negotiating tactic.
I understand those who try to sell on their own (although a very high percentage end up switching to a Realtor after exhausting time and money) as they see the potential to save however I really think that it should be a no brainer to use a Realtor when buying a property.


PS: I am not a writer so lets not discuss the flow or lack of in this post lol.

again and with all due respect to the hard working professionals in the industry, the system is gamed to make it difficult to work without a realtor.

for example, as a seller i have to pay a buying commision, even if the buyer doesnt bring one, it just means the seller gets both ends of it.

can you image if your client tried to negotiate this with their selling agent, the answer would be a blank look and a "thats not how it works".

as for knowing of common problems in a building or other industry inside information, why cant i pay a realtor a consulting fee to advise me once i have found my property?

in the process i am going through to buy a property, i just feel that i could do a much better job of negotiating instead of playing the telephone game where i tell my realtor, she tells the other parties realtor and then they reply through their realtor to my realtor and back and forth we go.

its a stupid system really. i should be able to at least negotiate directly with the other realtor, but that would be "frowned" upon in the real estate system of business.

[squiggs96]

I think the biggest advantage a good realtor can bring to the table is knowledge and experience. When I bought a townhome in Vancouver I was very pleased with my realtor up until I signed the offer. She was great in finding me places and talking me through everything, but once the nitty gritty went on, I wish I had someone else.

I wanted the microwave that was bought as part of the appliance upgrade package by the owners 3 years ago when the place was new. The contract said appliances and specified some, but didn't specify the microwave and the sellers took it. My realtor wanted a possession date two days before I did to make it easy for lawyers, but my possession date ended by making me the owner of record for the AGM and thus I had to pay $400 for a strata levy for a budget deficit. The money wasn't the problem here, just the fact that I wanted a different day and she didn't pick up that her date cost me money. The sellers took the window coverings and it took me two weeks to get them back. I even had to go pick up the keys myself from the seller's realtor because mine was busy that day.

I am much wiser on how to approach purchasing property now than when I bought my first one. Looking back, I feel that my realtor should have picked up some of these things. I am very happy with the property, but with a better realtor I would have had spent less money and had more things. Now when I interview a realtor I ask better questions and I get better results. Yes the paperwork can be done by most anyone, but the knowledge my realtor has and their willingness to fight on my behalf is what I value.

[ken0042]

The seller is paying the realtor fee; so I see no reason to not have a realtor of your own. He/she is there to look after your interests; I have seen enough shows on HGTV to see there is the potential for conficts of interest. Most of the time that ends up with the realtor saying "I cannot comment."

When I bought my house, my realtor pointed out that it looked like the house was being sold as part of a divorce. Seeing that motivation he helped me come up with an offering price that was to my advantage.

Also, as Travis said you can tell your realtor what you are looking for; and he can start sending you listings. Make him work for his money- that is why he is there.

[Travis Munroe]

again and with all due respect to the hard working professionals in the industry, the system is gamed to make it difficult to work without a realtor.

for example, as a seller i have to pay a buying commision, even if the buyer doesnt bring one, it just means the seller gets both ends of it.
Chances are that buyer showed up on the door step because of the marketing done by the list agent. Therefor I do believe the list agent brought the buyer.

can you image if your client tried to negotiate this with their selling agent, the answer would be a blank look and a "thats not how it works".
The 2 words you mentioned "negotiate and commissions" do actually go together. This is often done to put a deal together.

as for knowing of common problems in a building or other industry inside information, why cant i pay a realtor a consulting fee to advise me once i have found my property?

A very weak example that came to mind is doing your taxes. You can pay someone to do them with you and have the 1 on 1 and discuss tactics or you can pay a fraction of the cost on software and take the time to do it yourself and possibly miss out on some important aspects.

in the process i am going through to buy a property, i just feel that i could do a much better job of negotiating instead of playing the telephone game where i tell my realtor, she tells the other parties realtor and then they reply through their realtor to my realtor and back and forth we go.
It sounds like you just may not be happy with how your realtor is handling things.

its a stupid system really. i should be able to at least negotiate directly with the other realtor, but that would be "frowned" upon in the real estate system of business.

You are free to do whatever you like. realtors pay thousands of dollars each year to be a part of CREB, AREA, CREA and more. This gives us access to tools that the general public does not have. It is a short course that just about anyone can pass (unfortunate IMO as so many realtors are part time or lack knowledge which can bring a bad rep among all realtors ). I think if it were more difficult to be in the industry the profession would be more respected than it is.

[Travis Munroe]

PS: great thread lol, havent seen double digits visiting the section in a while!!!

[afc wimbledon]

Having bought and sold a few homes already when I saw my current home on the market (10 years ago) I called the listing agent and arranged a viewing, I made an offer through her that was significantly lower than the asking price (40,000 less on a 289,000 house). Told her she could split the discount with the sellor and her fee. She didn't like it, as she was licking her lips at the prospect of a double commision but it went through in the end.

Got the house for 249,000, now worth 720,000.

There is only one party paying the realtor fees in the end and that is the vendor. If you are buying you have no one looking after you in practise anyway.

[DementedReality]

The seller is paying the realtor fee; so I see no reason to not have a realtor of your own. He/she is there to look after your interests; I have seen enough shows on HGTV to see there is the potential for conficts of interest. Most of the time that ends up with the realtor saying "I cannot comment."

I would like the seller to NOT pay his realtor the buying commission and instead reduce the huose price. Failing that, the selling realtor could just give me the buying commission. But as I said, the system is gamed so that this would be a "huh, umm what" moment.

When I bought my house, my realtor pointed out that it looked like the house was being sold as part of a divorce. Seeing that motivation he helped me come up with an offering price that was to my advantage.

My understanding is realtors are specifically not permitted to discuss the sellers or buyers motivations. no?

Also, as Travis said you can tell your realtor what you are looking for; and he can start sending you listings. Make him work for his money- that is why he is there.

Seems to be a no brainer if the realtor wants me to buy something, makes sense they will send me listings to consider. thats not really me making them earn their money, thats them trying to get me interested in a listing.



I still feel the system is gamed so that realtors can be in business.

honest question - if i called a realtor and said i was buying without a realtor and -
a) wanted to view their listing
b) expected the buying commission to either be reduced from the purchase price or paid to me directly

what would the answers be?

[afc wimbledon]

I still feel the system is gamed so that realtors can be in business.

honest question - if i called a realtor and said i was buying without a realtor and -
a) wanted to view their listing
b) expected the buying commission to either be reduced from the purchase price or paid to me directly

what would the answers be?

a) What time do you want to see the house?

b) we can discuss price later.

[Travis Munroe]

a) What time do you want to see the house?

b) we can discuss price later.

Bang on...

I have done this and why wouldnt I.
I can be paid 1 side commissions selling the house with another agent or I can be paid 2 sides and discount some of the commissions so that the buyer, seller and myself are all happy!

[afc wimbledon]

I wouldn't recomend buying your first house without a realtor, but I had 3 under my belt when I found myself with money and no house to sell. Normally you are selling a house as you are buying and the one agent handles it all.

[DementedReality]

thanks all .. good discussion and let me get some stuff of my chest! now i gotta make some money, so will be back later to stir the pot if i can!

[Sliver]

Demented Reality, the best thing to do is negotiate the realtor's commission upfront. I also think paying a percentage of the sale price of the house to somebody for what can amount to a few hours of work is insane.

Every deal I've done I've made sure I don't pay full commission. Especially since I prefer to write my own feature sheet (and my wife designed it), MLS ad, etc. I also like searching MLS myself, not having my realtor vet things for me.

As for negotiating, I find it painful having to go through somebody on that, but I basically just made him say what I wanted. In the end he did earn what I paid him - I need him to get on MLS, enter houses conveniently, he handled all the paperwork, etc. But at full price I would have felt totally ripped off.

I think it depends a lot on the client. My realtor had to put maybe a couple of days total into my file to both sell my old house and buy my new one. I think he took us on about five showings (we knew exactly what we wanted and where). I can see how less decisive people could monopolize a realtor's time, need everything spoon fed to them, etc., which starts to make the standard commission schedule a lot more fair.

On my next house purchase I'm going to find a realtor that will work on an hourly rate, capped at the standard commission rate. I think that would save me even more money, and I'd still make it worth the realtor's time.

[SeoulFire]

The whole industry (to a certain extent) is a self-licking ice cream cone.

[bizaro86]

1) they set up showings
so, why cant i call realtors directly for access to their listings?


I actually tried buying a place without a realtor, and this ended up being a huge PITA. I'd call the listing realtor, and leave a message with the broker's main answering service. Then, two days later, I'd get a call back offering 2 times that weren't convenient to me to go see the place. I also got the privilege of talking each realtor down from trying to sign me up as their client. Lots of fun.

When I go with a buyer's agent I call me Realtor's direct cell line, and arrange all the times for the places I want to see, and I go see them all in quick succession.

[Winsor_Pilates]

To the OP, I think you should just try buying without a Realtor if you feel strongly about it. If it works out for you, great!
It seems you're looking to bait Realtors into an argument here, where any half decent Realtor would just respect your opinion and wish you well.

Why would we want to represent a buyer who doesn't value our service anyway? If simply saving the buyers agent commission is what you're after, than power to you.

[DementedReality]

To the OP, I think you should just try buying without a Realtor if you feel strongly about it. If it works out for you, great!
It seems you're looking to bait Realtors into an argument here, where any half decent Realtor would just respect your opinion and wish you well.

Why would we want to represent a buyer who doesn't value our service anyway? If simply saving the buyers agent commission is what you're after, than power to you.

i think you have it wrong and will leave it at that since i clearly touched a nerve with you.

[troutman]

Why Use A Realtor?

http://www.creb.com/public/why-use-a-realtor/value-of-a-realtor.php

Going It Alone:

http://www.creb.com/public/why-use-a-realtor/going-it-alone.php

[SeoulFire]

Why Use A Realtor?

http://www.creb.com/public/why-use-a-realtor/value-of-a-realtor.php

Going It Alone:

http://www.creb.com/public/why-use-a-realtor/going-it-alone.php

To summarize:

Using a realtor has great "benefits" as they created an exclusionary system that makes it almost necessary to use a realtor.

Not using a realtor means you are excluded.

I would hardly trust the source (CREB) as being unbiased as it is in their best interest to keep the system as is.

[Kavvy]

Thank you for all posting here, as I will be buying my first place in the coming months, this discussion has been extremely informative for me!

[DementedReality]

To summarize:

Using a realtor has great "benefits" as they created an exclusionary system that makes it almost necessary to use a realtor.

Not using a realtor means you are excluded.

I would hardly trust the source (CREB) as being unbiased as it is in their best interest to keep the system as is.

thats kind of the impression I get as well ... again, with all due respect to the hard working realtors who are members of this forum. i was not baiting, instead looking for honest feedback.

[newts]

I'm a realtor, and here's my thoughts on this.

Although I'm capable, I don't change my own engine oil because I don't want to. I pay a premium to someone to do it.

Although I'm capable, I didn't write my own will for my wife and I because I didn't want to. I paid a premium for someone to do it for me.

Although I'm capable, I don't rake/fertilize my lawn in the spring because I don't want to. I pay someone a premium to do it.

etc...

If you have the ability, time and no how to buy/sell your own place, you should do it. Save the money!

If you want someone to handle it for you, call me and pay me. You want to negotiate fees? Let's do it.

For everyone I come across who has the ability and time to manage the whole process themselves, I come across ten people who don't know where to even start, or don't have the time to do it. It's not rocket science, but my clients time is their money, and in this case they put their trust in me to handle things. For that I get paid.

[Tolwyn]

Everyone has different opinions on the matter. At the end of the day, do your homework -- ask for references and talk to other realtors. I've had bad experiences with realtors myself through friends and family -- at the same time, I've also had very good ones. I'd be more than happy to act as a reference and give you the name of a realtor that I trust implicitly as well.

There will always be a few bad apples. Heck, not all car mechanics are rip-off jerks, and not all car salesmen are slimy Larrys either.

To me, hiring a realtor that I trust and can work well with is a big deal. That's their line of business -- not mine. I don't need to know how everything works or all the ins and outs. I want to sell the house and buy another; and having someone you can trust and act in your best interest is very important to me. My time is extremely valuable to me both financially and personally; it's not a good use of time and resources for me to do this real estate stuff myself when I can get a pro to do it.

Bottomline, it is your time and money to do what you want with it. I'd just recommend knowing all the facts and doing your homework first.

[SeoulFire]

I'm a realtor, and here's my thoughts on this. and mine as well!

Although I'm capable, I don't change my own engine oil because I don't want to. I pay a premium to someone to do it. But you have unlimited access to the resources that would allow you to do so.

Although I'm capable, I didn't write my own will for my wife and I because I didn't want to. I paid a premium for someone to do it for me. I am not sure on this one.

Although I'm capable, I don't rake/fertilize my lawn in the spring because I don't want to. I pay someone a premium to do it.But you have equal and easy access to the materials that would allow you to do so effectively.

etc...

If you have the ability, time and no how to buy/sell your own place, you should do it. Save the money!

If you want someone to handle it for you, call me and pay me. You want to negotiate fees? Let's do it.

For everyone I come across who has the ability and time to manage the whole process themselves, I come across ten people who don't know where to even start, or don't have the time to do it. It's not rocket science, but my clients time is their money, and in this case they put their trust in me to handle things. For that I get paid.People who want to do it themselves are extremely limited as a function of the system that realtors created. Hence, the self-licking ice-cream cone analogy for the industry.

I should actually qualify what I wrote as well - I don't mean to belittle the hardworking realtors that are out there (I know you exist somewhere) but I have had terrible experiences in the past (3 buys and 2 sells) with little value added and lots of value taken.

My beef is that, while the option is there, the system (created and maintained by realtors) makes it extremely difficult to do so independently and there is not enough of a barrier to entry to promote confidence.

[bizaro86]

My beef is that, while the option is there, the system (created and maintained by realtors) makes it extremely difficult to do so independently and there is not enough of a barrier to entry to promote confidence.

While I kind of agree with you on this point (and I'm not a realtor nor do I play one on TV) the bottom line is the system is what it is. While there are some pretty strong arguments in favour of changing it, unless and until that happens it makes sense to use a buyer's agent when you're buying a place. In a hypothetical world where I was in charge of the system I might change it, but since that hasn't happened I may as well work inside the system to the best of my abilities.

No sense hitting your head against a wall just because you don't think there should be a wall there.

[troutman]

I have seen a number of clients "go it alone" and assume the lawyer will give them all the same advice a realtor can (and for free). This is not our expertise necessarily, or part of our normal core services.

[Travis Munroe]

All around great debate...I understand those whom are against it and feel that many will not understand the true value in a realtor's services until they have tried to go at it alone.

[Winsor_Pilates]

i think you have it wrong and will leave it at that since i clearly touched a nerve with you.
My apologies if I got it wrong.
Didn't touch a nerve, just seemed you already have your mind made up & maybe weren't really looking for any answers. I guess I could be wrong.

Ultimately, the onus is always on the agent to prove their value as either the listing or buying agent. Like any service, If they can't prove that value you shouldn't hire them.
A decent agent should always have their services and values spelled out for you when you meet them. It can be adjusted depending on the needs of each client, but in my obviously biased opinion good agents do add value to the process and that's why they're able to get repeat customers, referrals and make a living.

[Winsor_Pilates]

My beef is that, while the option is there, the system (created and maintained by realtors) makes it extremely difficult to do so independently and there is not enough of a barrier to entry to promote confidence.
Would agree with this whole heartedly. It used to be mandatory to be full time if you were going to be a Realtor in Vancouver.
You also needed to be sponsored and approved by a brokerage before being able to go out and get a license.
The quality of the industry is really degraded by the fact that pretty much anyone can get a license and call themselves a Realtor.

[Travis Munroe]

^^^ with that being said,
it is up to the public to do their research as to whom they hire.
A few simple questions can weed out 50% of agents.

[ken0042]

Question for you Travis- if a first time buyer is asking you to be their agent; do you ask them to sign a contract?

I ask because I didn't sign one until we were putting in an offer (which is understandable at that point)- however a few friends who have used what I consider "questionable agents" they asked them to sign a contract right away. I'm just wondering if my agent was too trusting, or if the immediate contract was something to watch out for.

[onetwo_threefour]

Late to the party, but I had a few thoughts to add.

Reasons to use a realtor include, but are not limited to:

Buyer's agent can and should pull title to the property and review the title before an offer is made. Technically, Joe Public can do this himself, but does Joe Public know what to think when he sees a reservation agreement on title or a road widening plan, or a development agreement?

Buyer's agent is in a fiduciary relationship with Buyer meaning the agent has a duty of 'utmost good faith' to the Buyer and consequences if such duty is not upheld. This duty ensures that the level of service you are receiving from the agent representing you is not diluted in any way by divided loyalties. DementedReality's earlier comment about motivation is a perfect example. While it is true that the listing agent would not be allowed to disclose the Seller"s motivation, if you have a savvy Buyer's agent who pulls title and notices that there is a CLP on title that looks like it was filed by a spuse, there is nothing at all wrong with that Buyer's agent suggesting to the Buyer that it looks as though there may be a divorce motivating the sale. The Buyer's agent has not duty to the Seller to keep the Seller's motivation hidden, except where the buyer's agent is a dual agent.

Buyer's agent has E&O insurance.

Those are just a few reasons to use a Buyer's agent.

BTW, in answer to the question about signing a Buyer's Agency/Brokerage Agreement right off the bat, I would not call it a warning sign. I always recommend to new realtors that will be representing buyers that they make a habit of it. Some do, some don't. Often the guys who've been a round for a few years and have been burned by a Buyer or three stringing them along will start asking for the agreement up front.

[Drury18]

Question for you Travis- if a first time buyer is asking you to be their agent; do you ask them to sign a contract?

I ask because I didn't sign one until we were putting in an offer (which is understandable at that point)- however a few friends who have used what I consider "questionable agents" they asked them to sign a contract right away. I'm just wondering if my agent was too trusting, or if the immediate contract was something to watch out for.

I was attempting to be a first time buyer a couple of years ago and the realtor I was working with (as recommended by my insurance broker) never had me sign any sort of contract stating they were my agent. The only things I ever signed were the offers. Of which I ended up putting in offers 8 different times on 8 different places over a span of 6 months, all of which were never followed up on and lost to other more agressive agents acting on behalf of their clients.

[fredr123]

I'm not entirely sure what this means, but in the couple dozen or so mortgage fraud cases I have worked on so far, they were all private sales with no realtors involved. I'm not one to confound correlation with causation but the absence of realtors in a real estate transaction is a red flag for me.

[Travis Munroe]

Over the years I have had 1, maybe 2 people sign a buyers brokerage. Although many agents (and very successful ones) swear by it I have a different view.
I feel that I am pretty good at reading people and can tell right away if they are using me to find places so that they can save their friend/aka realtor time and then write the offer with him/her.
If I am doing my absolute best job and performing in a way that the buyer is happy then I see no reason as to why they wouldn't use my services from start to finish. The client has a choice of over 5000 realtors to use and they have chose me. It is my job to work for them and ensure they stick with me instead of having a security blanket of knowing they are forced to stay with me.

I wanted to crack a joke about a buyers brokerage equaling a NMC but couldn't find the right context to put it in lol.

[Winsor_Pilates]

I too don't use exclusive buyers agreements, but know of many good realtors who do. It's a personal thing I guess. To me working in good faith and earning the right to represent the buyer is enough, but I'm luckily yet to be burnt on is. Touch wood

[Shades]

Of which I ended up putting in offers 8 different times on 8 different places over a span of 6 months, all of which were never followed up on and lost to other more agressive agents acting on behalf of their clients.

Can you elaborate on the quoted part, because I don't understand the criticism. Where you low-balling the seller each time? It seems unlikely you could put 8 different offers in and not purchase a house unless you had unrealistic expectations.

[fundmark19]

He could if it was during the boom times or his realtor didn't advise him that his offer would be to low and that he should up it or call listing agent and see if there were other offers and try to get hints as to what price range they were in

[Travis Munroe]

It happens...

Don't fall in love with the house but try around to get a great deal which will mean a handful of low ball offers. Although this option gives the opportunity to come back with another offer if you really want the place.

Have the offer conditional to selling your current home. If an offer is accepted conditional to selling of the buyers home, the property does not have to advertise as C/S. This allows other buyers to shop through the property and place an offer. 9x out of 10 a seller will accept a offer not conditional to a sale of home than one that is.

[Drury18]

Can you elaborate on the quoted part, because I don't understand the criticism. Where you low-balling the seller each time? It seems unlikely you could put 8 different offers in and not purchase a house unless you had unrealistic expectations.

We were going in an average of $5,000 to $10,000 under asking price, as per the Realtor's direction. I was pre-approved for a mortgage, was bidding on houses within this range and on the advice of the realtor putting in offers $5-10K under the asking price. It was in mid 2009 and people were still purchasing for over a price. My realtor kept insisting this method would be perfectly fine and how everyone did it so we would write the offer and then she'd tell me a couple of days later that it was rejected and the house was already sold so we couldn't bid again. I have no idea if any of those offers were even countered or not. One even went so far as while I was touring a house for the second time with my parents (that we wrote an offer for and thought she had put my offer in the night before and we were waiting to hear back) we were told we had to leave as the house was sold to someone else.

Quite frankly, I put 100% of the blame for the 8 offers solely on the Realtor in this case. It was my first attempt to buy a house and I took all necessary steps to give her my budget for a house, got pre-approved and had cash in hand for the downpayment and when she told me to look at things above my price I refused stating I had a budget. I think the fact that I was only looking to spend $250K and not the $800K plus her other clients and listings were I didn't get anywhere near the same service. After the 8th offer and her flat out telling me "I didn't follow up because I didn't think it was necessary" I decided that I was no longer interested in purchasing a house and continued to rent.

Note: I just want to clarify that I blame THIS particular Realtor I worked with, not all Realtors. I realize this is not normal Realtor behaviour as I currently work with 3 others and when I told them about this and showed them the offer sheets written up as they did not believe me either they were appalled and said they have never seen anything like this before either. I would use a Realtor again when I decide to try to purchase my first house again, but I think I would do far more research or interviewing of one to ensure its the right fit.

[Travis Munroe]

^^ appreciate the story and your understanding that this was one individuals poor performance.
1 realtor like that in your story is what gives 100 others a bad name.

[squiggs96]

The one common thing you see when a house is listed without a realtor, is that 9 times out of 10 the house is significantly overpriced. Welist usually means 'really cheap homeowner with a warped sense of the value of their home.'

I've seen that a tonne and it never makes sense. There will be a house that is worth $300,000, and even though it could go for about $280,000 since there are no realtor fees, it will be listed the other way at $320,000.

One reason I think this happens, is the people who list themselves aren't in as big of a hurry as people who go with a realtor. They can wait the market out for a while hoping to get their price, and they have a lot of negotiating room. If they end up needing a quicker sale, they can always go with a realtor at that time.

[squiggs96]

Touch wood

I always do when I have my laptop open.

[Burn13]

So i was told that certain buyer realtors wont show my current listing because we listed it with a flat commission rate and they will take their clients to see other "higher" commission listed homes. This is actual feedback from half dozen realtors.

so the use for realtors to me has now been explained.

[Travis Munroe]

^^ Totally depends on your scenario as so many agents try to win business over by discounting both sides of the deal making it appeal to you. While it sounds attractive at first you soon realize that every house on your street is selling accept yours.
I can only discuss so much in the public like this so if you wish to hear more or want some advice PM me.

[ken0042]

so the use for realtors to me has now been explained.

I think you can bring this into any sort of commission sales. So if you have ever bought a car, a bed, an appliance, clothes from a store at a mall, etc then you have also had commission salespeople trying to sell you the thing that makes them the highest commission.

[DementedReality]

So i was told that certain buyer realtors wont show my current listing because we listed it with a flat commission rate and they will take their clients to see other "higher" commission listed homes. This is actual feedback from half dozen realtors.

so the use for realtors to me has now been explained.

i think the buying realtor is doing a disservice to their client here. what if your house was the perfect house for the buyer? they would never know because the realtor wont show it?

a flaw in the system, no?

[Slava]

i think the buying realtor is doing a disservice to their client here. what if your house was the perfect house for the buyer? they would never know because the realtor wont show it?

a flaw in the system, no?

When we bought a few years back the house was listed with a cheaper commission. The house just wasn't shown as often as the others in the area, and we definitely got a better deal as a result.

I can't blame the realtors though; would you want to do the exact same work for the same outcome and get paid much less? Its not the preference of most people!

[DementedReality]

When we bought a few years back the house was listed with a cheaper commission. The house just wasn't shown as often as the others in the area, and we definitely got a better deal as a result.

I can't blame the realtors though; would you want to do the exact same work for the same outcome and get paid much less? Its not the preference of most people!

that would be the flaw in the system!

however, all business have different types of orders, some make more then others, but we still service our clients dont we?

you dont tell your clients you wont help them buy a type of fund because the commission isnt as much as the one you would prefer to sell them.

just as certain orders i take make me less then others, but i still help my clients out.

i dont think a realtor is serving their client by only showing certain properties, but i guess thats me.

[4X4]

I don't understand the resentment some people feel over how the MLS system works. It was created by realtors to serve realtors. Realtors pay to upload their listings on it, and that's why it exists. Only since the internet became common was it available for the public to view, but even now, the public doesn't see the most current listings on the MLS. That's still for realtors to keep the inside track. And rightfully so. They're the ones paying for it.

[Travis Munroe]

Thank you 4x4. Everyone has their own view and at the end of the day I enjoy a good debate like anyone. With that being said, DementedReality see's nothing but flaws in the system and no use for realtors. I think it is quite clear how you feel and every second post is about how messed the system is.
You do not have to deal with any realtor's if you do not wish.
As spoken above, I pay into a membership that gives me access to private real estate information. Best of all, a few months of your time and you can do it too!

Lastly, do not go mis understanding the industry as a easy industry to become a millionaire. 95% of the money in this industry is controlled by 5% of our agents. Just like any profession, the ones who are great make big money. The non go getter agents are fighting for scraps.

[Slava]

that would be the flaw in the system!

however, all business have different types of orders, some make more then others, but we still service our clients dont we?

you dont tell your clients you wont help them buy a type of fund because the commission isnt as much as the one you would prefer to sell them.

just as certain orders i take make me less then others, but i still help my clients out.

i dont think a realtor is serving their client by only showing certain properties, but i guess thats me.

Right, I don't operate that way, but that is by choice. I can definitely see the other side of the coin where advisors in my field will not work with funds where they make less money though.

Its not a problem with the system though, its a case where people think that others make too much money for their services. In this case you are expecting that someone should work for free or for much less than they would charge....which is your prerogative, just as much as its their choice to not do it.

[bizaro86]

....which is your prerogative, just as much as its their choice to not do it.

In this case, if a buyer would be best served by a certain property, wouldn't a Realtor in an agency relationship be bound to show it to them? Obviously that's not what happens, but I'm pretty sure they would be theoretically obligated to do so.


Brokerages and their licensees are legally obligated to protect and promote the interests of their principals as they would their own.

http://www.bcrea.bc.ca/buyers/why_use.htm#agency

[Travis Munroe]

^^ no doubt. I have never turned down showings because I am being offered less. Am
Am I a little shorter when asked for feedback or grab a extra chocolate out of the "take one" basket.....I will let you decide

[bizaro86]

^^ no doubt. I have never turned down showings because I am being offered less. Am
Am I a little shorter when asked for feedback or grab a extra chocolate out of the "take one" basket.....I will let you decide

That's human nature, I would think. I suspect those who offer less commission have bigger problems with buyer's agents than an extra chocolate...

[Slava]

Well thats all well and good, but while the realtor might still show the property I can totally see why they might not....they're running their own business and if they don't want to do that for that price isn't it up to them?

In my case there were quite a few places in the area to view, so I can easily see how our eventual choice was not shown by every realtor.

[DementedReality]

Thank you 4x4. Everyone has their own view and at the end of the day I enjoy a good debate like anyone. With that being said, DementedReality see's nothing but flaws in the system and no use for realtors. I think it is quite clear how you feel and every second post is about how messed the system is.
You do not have to deal with any realtor's if you do not wish.
As spoken above, I pay into a membership that gives me access to private real estate information. Best of all, a few months of your time and you can do it too!

Lastly, do not go mis understanding the industry as a easy industry to become a millionaire. 95% of the money in this industry is controlled by 5% of our agents. Just like any profession, the ones who are great make big money. The non go getter agents are fighting for scraps.

hang on mate, i never said i have no use for realtors, i was asking for comments on my observations. have i been disprespectful of the profession?

i buy sell and negotiate for a living as well so i understand the dynamics, but wanted to get to know the details better. i have learned here and also have some of my concerns reinforced.

[DementedReality]

Right, I don't operate that way, but that is by choice. I can definitely see the other side of the coin where advisors in my field will not work with funds where they make less money though.

Its not a problem with the system though, its a case where people think that others make too much money for their services. In this case you are expecting that someone should work for free or for much less than they would charge....which is your prerogative, just as much as its their choice to not do it.

Slava, i am not expecting anyone to work for free ... i wanted to know what i was getting when i use a realtor to buy. it seems the process that i just went through left a little to be desired and the great CP community was a place to come and get insight into the issue.

[troutman]

BTW, why is the buyer's agent called the "selling agent"? I find this very confusing. The seller's agent is the "listing agent".

Also, why are some realtor's e-mails hidden on web-sites, so that you have to fill out a form to contact them?

[Travis Munroe]

FOTZE... 24a st listing?? It came to mind because I sold a lot down the street and it was active at that time. A couple years later it is still active.

Troutman, it is confusing, especially when preparing a deal sheet and it asks for the selling realtor and list realtor. To me the selling realtor is the one who sold it and the buyers realtor is the one who brought a buyer.
As for emails, its because thats how many template sites are (including mine) and its a pain. There has to be an explanation for this though.

[Burn13]

i think the buying realtor is doing a disservice to their client here. what if your house was the perfect house for the buyer? they would never know because the realtor wont show it?

a flaw in the system, no?

exactly how I feel, somewhat unethical to their client and the industry.

What is bothersome is that they openly tell my realtor this! Probably talk their client out of a home as well when it comes to a decision. Definitely not in their clients best interest so in other words unethical.

They are suppose to represent their clients, that's what their job is whether its 7, 3,1% 5,3,1%, 3.5% flat doesnt matter. They signed up to help their client find a home or sell one.

[Winsor_Pilates]

Also, why are some realtor's e-mails hidden on web-sites, so that you have to fill out a form to contact them?


As for emails, its because thats how many template sites are (including mine) and its a pain. There has to be an explanation for this though.
It's spam protection.

The template sites like mine & yours are targeted by spambots that scour the net for email addresses and add you to their spam outs.

I had my email on my site, until myrealpage advised me to take it off for that reason and only use contact forms with spam proofers like those "type these words" or "click if you're human" type things.

[Bagor]

I can't blame the realtors though; would you want to do the exact same work for the same outcome and get paid much less? Its not the preference of most people!

Agreed, it's not, but at the end of the day their job is "supposedly" to act in their clients interest. If a house comes on the market that ticks all the boxes then one would hope they'd have the sense to appreciate that a smaller faster deal is better than no deal at all or one that's more time consuming. So in a way it's not necessarily the exact same work.

My experience ..... we sold ourselves a few years back inviting realtors at 1.5% and only had a couple of new (i.e. first time) viewings brought in by buying agents. The rest and the sale itself was a result of open houses whereby the buyers returned for a formal visit with their respective agent.

JMO and my experience but the biggest pain and hardest work of selling is the cleaning, decluttering and depersonalising of the house. If the realtor did that, I might have been interested.

[onetwo_threefour]

exactly how I feel, somewhat unethical to their client and the industry.

What is bothersome is that they openly tell my realtor this! Probably talk their client out of a home as well when it comes to a decision. Definitely not in their clients best interest so in other words unethical.

They are suppose to represent their clients, that's what their job is whether its 7, 3,1% 5,3,1%, 3.5% flat doesnt matter. They signed up to help their client find a home or sell one.

There is another side of that coin that nobody is mentioning. I'm not bringing it up to say I approve or disapprove, but think it's part of the conversation. It goes like this, when you engage a Buyer's agent to help you find a property it's not all that common for the expectations for that Realtor's remuneration to be laid out on the table. Now, we all know that the default position is 3.5/1.5, but not every listing is going to offer that. The Buyer's Agent could enter into an agreement with the Buyer to the effect that if the Buyer makes an offer on a property where the commissions being offered are less than 3.5/1.5 to the Buyer's Agent then the Buyer will have to pay the difference out of the Buyer's own pocket. Now it's fairly obvious to see why Buyers' realtors won't actually have their buyers sign such an agreement, the Buyer will just walk next door to the next Realtor who doesn't have such a requirement. On the other hand the net effect may be the same as if there was a practice of having such Buyer's Agency agreements signed. If a Buyer's agent isn't going to get paid in full, there's a disincentive to show a discounted commission listing. If the Buyer is going to have to make up the difference with their own realtor, then there is a disincentive for the Buyer to make an offer on a discounted commission listing and/or it gives the buyer the incenbtive to drive a harder bargain with the Seller, knowing that the Seller is 'cheaping out' on commissions.

Just food for thought...

[Winsor_Pilates]

My experience ..... we sold ourselves a few years back inviting realtors at 1.5% and only had a couple of new (i.e. first time) viewings brought in by buying agents. The rest and the sale itself was a result of open houses whereby the buyers returned for a formal visit with their respective agent.

JMO and my experience but the biggest pain and hardest work of selling is the cleaning, decluttering and depersonalising of the house. If the realtor did that, I might have been interested.
Do you feel you got full potential value for your home?
Very few sales (about 2%) happen through open houses, so you're fortunate it worked out so well for you.
Generally, cleaning the house and having open houses isn't enough to sell most homes at maximum potential value.

Is it possible that having a good agent, who would have marketed and exposed your home to more potential buyers might have gotten you a higher sale price?

[Slava]

I think I would be peeved if a realtor hid a lower commissioned home from me, if I found out, and you likely would if it showed up on MLS, then I would stop working with them. I would understadn if they said they weren't going to be doing any of the work involved if I chose to buy it or even told me to phone the listing realtor myself.



Agreed, it's not, but at the end of the day their job is "supposedly" to act in their clients interest. If a house comes on the market that ticks all the boxes then one would hope they'd have the sense to appreciate that a smaller faster deal is better than no deal at all or one that's more time consuming. So in a way it's not necessarily the exact same work.


I agree with you guys here and I see your point. I would feel the same about a realtor working for me and at the same time avoiding certain properties because they weren't going to get paid the same amount.

The other side of the coin though is that the realtor has to be able to earn a living as well...so if there is a flaw in the system its that every property wouldn't pay the same for the sale. If every house that sold paid a certain amount to the realtor for the people who bought it then there would be no issue. Its not that I want to see market controls here...because I hate that sort of thing as well, but I'm not sure what the solution would be.

[DementedReality]

I agree with you guys here and I see your point. I would feel the same about a realtor working for me and at the same time avoiding certain properties because they weren't going to get paid the same amount.

The other side of the coin though is that the realtor has to be able to earn a living as well...so if there is a flaw in the system its that every property wouldn't pay the same for the sale. If every house that sold paid a certain amount to the realtor for the people who bought it then there would be no issue. Its not that I want to see market controls here...because I hate that sort of thing as well, but I'm not sure what the solution would be.

i call it "the good, the bad & the gravy".

this means that not all jobs pay the same, but you take them all and treat each one as if they are your most important and over time this will pay off.

some jobs pay fair, some pay lower then you would hope and others pay far more then they should have. take them all, treat all your clients like gold and overtime you will be rewarded for it.

but thats me. i practise what i preach in my business and always put the interests of the client as the first priority.

sure, internally you put more resources into the best paying jobs, but at the same time make all clients feel you are taking better care of them then anyone else could.

the good, the bad and the gravy.

[troutman]

I think it would be the same as a financial advisor steering you to stuff that pays a better commission. Please tell me that doesn't happen.

Consumers deserve better disclosure.

[Slava]

I think it would be the same as a financial advisor steering you to stuff that pays a better commission. Please tell me that doesn't happen.

Well this is probably not the time/place, but sure it happens.

I better explain before people get up in arms though. As far as investments go (mutual funds, stocks,etc.) the pay is basically equal across the board. So if you buy a fund through me from ABC company as opposed to DEF the pay is the same. It doesn't matter whether you pick one over the other because one has a blue logo and the other is red or anything like that; its totally even. I should note that there are some differences in the way that advisors get paid, and some varying amounts of some pieces, but its really minor stuff. I could go into detail if you like, but the reality is that compensation from my point of view is not a factor. You have to consider the source though: I'm an independent advisor - I own and operate my own practice. I make that distinction because there are companies out there where advisors get paid totally differently if they sell their products. In that case its a completely different model than what I'm talking about for me.

Insurance though is a whole other story. It depends on the contract that you have with the carriers and things like that. For me there isn't a whole lot of difference (the difference is in the magnitude of hundreds of dollars, which might sound like a lot, but really is not a big deal in case you're curious). Some guys though will make double the money by using one company over another for the same product. When you start getting discrepancies like that then you will likely be sold on that particular company over the one that pays half....and frankly in almost every case I would say that isn't a big deal. IF the policy is the exact same, and the cost to the client is the same or within say $1.00 per month then you can't blame a guy for that I guess. Its my practice to disclose the costs of a few major companies to clients and let them decide...but frankly there is no real difference for me compensation-wise and so its a matter of doing the best thing for clients.

MOST independent advisors operate in a manner like I describe, but surely there are some who do things differently. If your guy does though it doesn't mean that they are screwing you (to be totally clear!).

[Slava]

Consumers deserve better disclosure.

OK...now I'm just hijacking this thread, and my apologies in advance!

Consumers do deserve better disclosure, and I agree. The thing is that for that disclosure to be meaningful there is some education that consumers would need as well. To keep it simple, "the grass is always greener".

So people commonly look at the work/service that someone else provides and figures "really that is all you have to do to earn that $X? What a joke!" Things always look simple when you have a competent individual doing these things. I am not above disclosure at all to my clients, and the industry is definitely headed more and more in that direction.

[Travis Munroe]

"the good the bad and the gravy"

One of the best compliments I receive is how the client appreciated being treated as if they were my only client and this is done by putting in that overtime.

If the system forced everyone to offer 3.5 and 1.5 or had a flat rate regardless of the sale price I would be all in favor. The flaw is allowing others to discount the BUYERS commissions. IMO this is now a conflict of interest which the board does its best to avoid. Having a client buy a 320k property vs 300k property is a couple hundred dollars difference however having a client buy from a listing with a buyers commission decrease vs standard can be thousands of dollars difference.

[DementedReality]

"the good the bad and the gravy"

One of the best compliments I receive is how the client appreciated being treated as if they were my only client and this is done by putting in that overtime.
.

same, hope you were agreeing and not calling me out.

[Travis Munroe]

no calling out on this side!

[newts]

This may be a good example on why to use a buying agent, which was the original question.

I recently represented a client on a purchase. As we were writing the offer I asked if they had an idea of where they'd like to start in terms of a first purchase offer price. They gave me their number, which was well below the list price, but I suggested that we offer about $20,000 lower vs. their number. My estimation was based on what I have been seeing in the last couple of months with offers in this price range with my listings, and with listings I have bid on, on behalf of clients. I see lots of offers on both the buy & sell side, so obviously you get a feel for it.

We ended up getting the property for less than what my clients suggested they wanted to go in with their first bid. If they would have chased the property without representation, in all likelihood they would have paid a lot more.

[4X4]

Re: lower commissions

When a realtor doesn't show a property because the selling commission is too low, it's not about "punishing" the seller as much as it is a big F U to the list agent. And rightfully so, IMO. A smart seller should be making sure the selling commission is at least close to the going rate, and if it isn't, the seller should be questioning their listing realtor as to why he or she is not offering it.

Remember that the selling agent is the one that is more or less in control of the buyer's money, so if that agent is not motivated to sell your property, how will it ever sell? Dual agency?

There is no such thing as a unique property when it comes to regular residential real estate, at least, not in Calgary where all the houses were built in waves that almost all conform to similar codes and styles. Maybe in places like Mount Royal or Eagle Ridge there are "unique" homes, but you're never going to see a We List sign in there, or any of the bargain realty companies either.

For the record, I happen to think that the current industry norm of 7/3 is a bit high, but that's beside the point. If you are serious about buying or selling, use an agent that is serious as well. And any serious agent is not going to go around doing the same job as the next guy for half the price. If he is, you should probably wonder why. And if it bothers you that realtors make a nice chunk of change per deal, then go get your license and try doing it yourself.

Sorry for my a-holishness here. I come from a family of realtors and land developers. I've been in and around this industry since before I could walk. There's a lot of money to be made in real estate, but if you think it's easy, you're a fool. You might as well be doing all your mechanical work, and replacing your furnace, and writing your wills, and farming your own food as well. I'm not saying it's rocket science, I'm saying it's a full time job with no guarantee at the end of the month that you're going to get a cheque.

[bizaro86]

This may be a good example on why to use a buying agent, which was the original question.

I recently represented a client on a purchase. As we were writing the offer I asked if they had an idea of where they'd like to start in terms of a first purchase offer price. They gave me their number, which was well below the list price, but I suggested that we offer about $20,000 lower vs. their number. My estimation was based on what I have been seeing in the last couple of months with offers in this price range with my listings, and with listings I have bid on, on behalf of clients. I see lots of offers on both the buy & sell side, so obviously you get a feel for it.

We ended up getting the property for less than what my clients suggested they wanted to go in with their first bid. If they would have chased the property without representation, in all likelihood they would have paid a lot more.


This has happened to me before, although not with numbers quite that big. The savings from getting 5k off the purchase price that I wouldn't have otherwise got were about equal to what my buyer's agent grossed on the deal. So even if I could have saved all the buyer's commission (which is doubtful) I still came out ahead/even.

It's like anything else. You can choose to do it yourself, but it's way harder. If you think it'll be easy, try it. I have, and now I always use a buyer's agent, because it's a huge time savings.

[Bagor]

Do you feel you got full potential value for your home?
Very few sales (about 2%) happen through open houses, so you're fortunate it worked out so well for you.
Generally, cleaning the house and having open houses isn't enough to sell most homes at maximum potential value.

Is it possible that having a good agent, who would have marketed and exposed your home to more potential buyers might have gotten you a higher sale price?

Yeah, I'm more than happy what we sold for. But I would say that!:) Seriously though ... yes.

And I've heard this 2% for open houses figure before which begs a couple of questions. Is this 2% based on an offer at the actual open house that leads to a deal or return viewings that then lead to an offer. And secondly is this data is true and so low .... why bother? Is there an actual official statistical report to back up these statements?

All I'm saying is the cleaning etc from my experience was the biggest PITA of the process.

As to the 2nd part of your question .... sure it'd possible but using comparables before and after .... no. i.e. The net money that enters my pocket when all expenses are paid.

Which leads onto another question. Say I'm selling for 400k with agents at 1.5% and you contact me looking for my listing. If I say sure provided there is something written into the contract that you MUST sell for at least 415k to earn your commission (therefore I get the same coin in my pocket) would you have this clause written into your contract?

i.e. Are realtors prepared to back up their claims in the form of flexible contracts or are they rigid? Also is the 6 months a rigid pre-requisite for a contract.

If a realtor is claiming that they can sell my house for x dollars in 2 months max can I turn around and say .... fine, I'll sign up with you for 2 months?

[bizaro86]

i.e. Are realtors prepared to back up their claims in the form of flexible contracts or are they rigid? Also is the 6 months a rigid pre-requisite for a contract.

If a realtor is claiming that they can sell my house for x dollars in 2 months max can I turn around and say .... fine, I'll sign up with you for 2 months?

Different realtor's have different requirements on that. When I sold my house, we signed for 3 months, but one guy we tried wanted 6. We didn't go with him for different reasons, but it definitely varied, and is certainly negotiable. I bet more realtor's would be willing to cut the duration than the fee....

[Sliver]

Re: lower commissions

When a realtor doesn't show a property because the selling commission is too low, it's not about "punishing" the seller as much as it is a big F U to the list agent. And rightfully so, IMO. A smart seller should be making sure the selling commission is at least close to the going rate, and if it isn't, the seller should be questioning their listing realtor as to why he or she is not offering it.

Remember that the selling agent is the one that is more or less in control of the buyer's money, so if that agent is not motivated to sell your property, how will it ever sell? Dual agency?

There is no such thing as a unique property when it comes to regular residential real estate, at least, not in Calgary where all the houses were built in waves that almost all conform to similar codes and styles. Maybe in places like Mount Royal or Eagle Ridge there are "unique" homes, but you're never going to see a We List sign in there, or any of the bargain realty companies either.

For the record, I happen to think that the current industry norm of 7/3 is a bit high, but that's beside the point. If you are serious about buying or selling, use an agent that is serious as well. And any serious agent is not going to go around doing the same job as the next guy for half the price. If he is, you should probably wonder why. And if it bothers you that realtors make a nice chunk of change per deal, then go get your license and try doing it yourself.

Sorry for my a-holishness here. I come from a family of realtors and land developers. I've been in and around this industry since before I could walk. There's a lot of money to be made in real estate, but if you think it's easy, you're a fool. You might as well be doing all your mechanical work, and replacing your furnace, and writing your wills, and farming your own food as well. I'm not saying it's rocket science, I'm saying it's a full time job with no guarantee at the end of the month that you're going to get a cheque.

That's not beside the point; it is the point. If you think it's too high why not negotiate it down? If your home is worth double other average homes/condos, the commission based on a percentage of the value you've worked to earn starts to seem criminal.

It's not like a realtor has to work more to sell a $700,000 home versus a $250,000 condo. It's not unreasonable to negotiate a commission that doesn't have you paying $25,000 (commission on the $700k place) for the same amount of work the realtor would've been happy being paid $11,500 for (commission on the $250,000 condo). I don't understand what would entitle a third party to an extra $14,000 of my money, but if you do by all means pay full commission.

[4X4]

That's not beside the point; it is the point. If you think it's too high why not negotiate it down? If your home is worth double other average homes/condos, the commission based on a percentage of the value you've worked to earn starts to seem criminal.

It's not like a realtor has to work more to sell a $700,000 home versus a $250,000 condo. It's not unreasonable to negotiate a commission that doesn't have you paying $25,000 (commission on the $700k place) for the same amount of work the realtor would've been happy being paid $11,500 for (commission on the $250,000 condo). I don't understand what would entitle a third party to an extra $14,000 of my money, but if you do by all means pay full commission.

As a matter of fact, a realtor does have to work more to sell the higher end home. There are much, much fewer buyers for a $700,000 home than there are for a $250,000 condo, as well as fewer direct comparables.
I'm not trying to convince you that it's $14,000 more work, but it sure as shiz is more work.

Anyway, as far as actual commission rates go, I think it should be a little more like 7/2 or perhaps even 7/1. But I know that once you get close to a mil, commission rates will often change to a flat percentage rate, and it's always a flat percentage for commercial real estate.

[Slava]

Add to the fact that as the buying price increases most buyers are looking for more specific things as well. If you are in the market for a million dollar home today you have different expectations of that property than a person looking to spend half that. If things aren't exactly what you're looking for as a high end buyer there is no deal, whereas most buyers spending average figures will be alright with repainting or remodeling. ( a generalization to be sure, but more often the case I would say)

[Winsor_Pilates]

Yeah, I'm more than happy what we sold for. But I would say that!:) Seriously though ... yes.

And I've heard this 2% for open houses figure before which begs a couple of questions. Is this 2% based on an offer at the actual open house that leads to a deal or return viewings that then lead to an offer. And secondly is this data is true and so low .... why bother? Is there an actual official statistical report to back up these statements?
To be honest, I don't know if it's exactly 2% but it's very low. The reason people bother with open houses:
-Sellers still expect them and think it's part of your job as the Realtor
-Realtors will try to pick up new business through them if the people coming in aren't already working with an agent

Which leads onto another question. Say I'm selling for 400k with agents at 1.5% and you contact me looking for my listing. If I say sure provided there is something written into the contract that you MUST sell for at least 415k to earn your commission (therefore I get the same coin in my pocket) would you have this clause written into your contract?

i.e. Are realtors prepared to back up their claims in the form of flexible contracts or are they rigid? Also is the 6 months a rigid pre-requisite for a contract.

If a realtor is claiming that they can sell my house for x dollars in 2 months max can I turn around and say .... fine, I'll sign up with you for 2 months?
Yes, Realtors can be flexible and set up different tailor made arrangements. In your example, I would have to see if 415K is reasonable before making my decision.
If the house is only going to be sellable at 400K, I would likely respectfully decline the listing. It's not part of my "claims" that I will sell your home for 15K over what it's worth, and that's not what my listing presentation or values as a Realtor are based on.
This is just me personally though, as there are lots of agents out there who seem to take any listing at any price.
I would caution you to ask why they are willing to take on a listing they likely won't sell; and is a desperate agent really your best bet to hire?
If you're main 2 criteria for choosing an agent become: who says they'll sell if for the most & who says they'll take the lowest commission, you're not likely hiring very good Realtors.

As for 6 months, there's no restriction but 2 months is the minimum for a listing to be put on MLS.
Depending on the market and realistic timelines needed in it, the term of the listing contract is usually adjusted. I know in the slow market Calgary had last year, many agents I talked to would not take on listings at under 3 months.

[Travis Munroe]

Rules prohibit from saying commission will be X amount if sold for this and you will get x amount as a bonus if you sell for more.
As for the open house situation, I do not know where the stats are from but personally don't believe them. You have no way to tell if someone came through your open house as a resident of the community who then tells a friend or family member about it. They then check it out on the internet, book a showing and all of a sudden you have an offer that started from the open house but there would be no way to find out.
As winsor said, too many agents will take any listing despite the sellers asking price. More times than not this place sits on the market for 3 months and then they go with another agent who prices the property properly and it sells after a month.

[DementedReality]

Re: ... I'm saying it's a full time job with no guarantee at the end of the month that you're going to get a cheque.

for the record, i dont disagree here. this is why i prefaced my comments with "with all due respect ... "

i make my living in a similar model, i am not suggesting its easy. was looking for and received discussion on the value i receive as a buyer.

i like the point that it really is the listing agents fault as they are the ones who counsel the sellers on where to set the rate for the buying realtor.

[Mad Mel]

again and with all due respect to the hard working professionals in the industry, the system is gamed to make it difficult to work without a realtor.

for example, as a seller i have to pay a buying commision, even if the buyer doesnt bring one, it just means the seller gets both ends of it.

can you image if your client tried to negotiate this with their selling agent, the answer would be a blank look and a "thats not how it works".

as for knowing of common problems in a building or other industry inside information, why cant i pay a realtor a consulting fee to advise me once i have found my property?

in the process i am going through to buy a property, i just feel that i could do a much better job of negotiating instead of playing the telephone game where i tell my realtor, she tells the other parties realtor and then they reply through their realtor to my realtor and back and forth we go.

its a stupid system really. i should be able to at least negotiate directly with the other realtor, but that would be "frowned" upon in the real estate system of business.

Out of interest, that's how it works here. When I bought my home, the only realtor involved was the seller's realtor, who gets paid by the seller to represent his/her interests (usually about 2.5% commission, for the record). If I wanted to, I could have paid a buyer's agent to assist me, but I was comfortable with what I wanted, where I wanted it, and the market values. It's not hard to look for what you want these days, and even actual sale prices are available.

[bizaro86]

Rules prohibit from saying commission will be X amount if sold for this and you will get x amount as a bonus if you sell for more.
As for the open house situation, I do not know where the stats are from but personally don't believe them. You have no way to tell if someone came through your open house as a resident of the community who then tells a friend or family member about it. They then check it out on the internet, book a showing and all of a sudden you have an offer that started from the open house but there would be no way to find out.
As winsor said, too many agents will take any listing despite the sellers asking price. More times than not this place sits on the market for 3 months and then they go with another agent who prices the property properly and it sells after a month.

Sure. But the rules don't prohibit a commission structure of 3% on the first 250k and 35% of everything over 250k...

A commission structure like that would provide a stronger incentive for realtors to get the last 10k out of a listing, because the commission would materially change. In the current system, the realtor gets half of 3% of the last 10k, which equates to $150. Any rational realtor would want to sell for a slightly lower price and take the guaranteed thousands in commission, versus holding out for slightly more money that doesn't affect their income substantially.

Academic research also bears this out. A study at the University of Chicago showed that realtor's listing their own homes got slightly more money, and kept their homes on the market ~10 days longer than homes they listed for clients.

http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.137.3041&rep=rep1&type=pdf

[bizaro86]

I know in the slow market Calgary had last year, many agents I talked to would not take on listings at under 3 months.

3 months is pretty reasonable. If you're hiring someone, it's only fair to give them a chance to actually do their job. One of the agent's I interviewed when selling said he only took listings with a year's agreement. I wish he would have mentioned that on the phone, since he left (at my request) as soon as he said it wasn't negotiable, and it would have saved us both some time.

[Travis Munroe]

Bizaro, I guess a structure like that would work. I was more so avoiding the whole you get me 300-320 I pay you 5k commission and you get me 320 or more and I give you 10k commission. It is now a major conflict of interest as the agent may try talking the seller out of a 318k offer for his own benefit. The whole model of CREB/RECA is avoiding any conflicts of interest.

[SeoulFire]

I think a good portion of this comes down to a monumental (and widespread) lack of trust for the industry as a whole. Personally, I trust realtors as much as I trust anybody in a 100% commission driven position - which is not at all.

[Sliver]

As a matter of fact, a realtor does have to work more to sell the higher end home. There are much, much fewer buyers for a $700,000 home than there are for a $250,000 condo, as well as fewer direct comparables.
I'm not trying to convince you that it's $14,000 more work, but it sure as shiz is more work.

I don't think there's any more work in selling a more expensive home from the realtor's perspective. For one, the paperwork would be exactly the same (it's not like you fill out different forms after houses hit $700k or a million). I suppose it could sit on the market longer, but that doesn't equate to any work for the realtor.

Anyway, as far as actual commission rates go, I think it should be a little more like 7/2 or perhaps even 7/1. But I know that once you get close to a mil, commission rates will often change to a flat percentage rate, and it's always a flat percentage for commercial real estate.

Sounds reasonable.

[Travis Munroe]

I understand the 0% trust for "Realtors" but do believe that you can have 100% trust in a specific "Realtor".

[ken0042]

I suppose it could sit on the market longer, but that doesn't equate to any work for the realtor.

Wouldn't a longer time on the market mean more newspaper ads, more showings and more open houses?

[SeoulFire]

I understand the 0% trust for "Realtors" but do believe that you can have 100% trust in a specific "Realtor".

I get that but when you are 0 for 3 it has become difficult to assume that the next one will be better. :(

[Travis Munroe]

Buying or Selling?

[Sliver]

Wouldn't a longer time on the market mean more newspaper ads, more showings and more open houses?

If you're my realtor selling my house, how do more showings take any of your time? The realtor with an interested buyer calls you to schedule a time and you call me to confirm the time. That takes maybe 10 minutes to field the call and advise me of the time.

I doubt people with super expensive houses would want an open house so I think you can remove that as a possibility.

As far as advertising, I don't think it's fair to add that as a cost of selling a house. Look at ads for homes by realtors - they are advertising themselves to garner more business under the guise of advertising homes. Homes are bought and sold on MLS - not through print ads.

[bizaro86]

I understand the 0% trust for "Realtors" but do believe that you can have 100% trust in a specific "Realtor".

This is very true, as with many things (especially with a relatively low barrier to entry) there are some bad apples. There are also some great ones.

[ken0042]

I get that but when you are 0 for 3 it has become difficult to assume that the next one will be better. :(

That's where it is important to interview the realtor. The first guy who came "highly recommended" wasn't right for my needs. The guy I ended up using was great for my needs.

I've also been "soft interviewing" Travis here; asking some questions and he has been great. I will likely consider using him in the future when/if I need a realtor. However I will meet him face to face first.

If you're my realtor selling my house, how do more showings take any of your time? The realtor with an interested buyer calls you to schedule a time and you call me to confirm the time. That takes maybe 10 minutes to field the call and advise me of the time.

OK, in my experience with showings, the selling realtor has always been there as well as my own. The only time I have not seen the selling realtor show up was when we were renting a house; and it was for sale. Our landlord had it for sale for some legal reason and didn't really want to sell. His selling realtor let us know he would only come if we weren't going to be home.

That's where I was going with this. So if your selling realtor is not making a point of being there for showings; then yeah I agree he is not earning his money.

[Sliver]

OK, in my experience with showings, the selling realtor has always been there as well as my own. The only time I have not seen the selling realtor show up was when we were renting a house; and it was for sale. Our landlord had it for sale for some legal reason and didn't really want to sell. His selling realtor let us know he would only come if we weren't going to be home.

That's where I was going with this. So if your selling realtor is not making a point of being there for showings; then yeah I agree he is not earning his money.

Yeah, I'm pretty sure the selling realtor is never there for a showing.

[Winsor_Pilates]

Yeah, I'm pretty sure the selling realtor is never there for a showing.
Usually not in Calgary cause everything is on lockbox.
In Vancouver, we can't use lockboxes and have to be there for all showings.

[bizaro86]

In Vancouver, we can't use lockboxes and have to be there for all showings.

Really? That seems like it would be a huge PITA for scheduling viewings.

[SeoulFire]

Buying or Selling?

5 transactions in total. 2 sells and 3 buys.

[Travis Munroe]

5 transactions in total. 2 sells and 3 buys.

5 and you didnt give the CP sponsor a shot at 1 of them :bag::bag::bag: lol.
If you still require help, I am more than happy to make your success rate 1/4 :D

[SeoulFire]

5 and you didnt give the CP sponsor a shot at 1 of them :bag::bag::bag: lol.
If you still require help, I am more than happy to make your success rate 1/4 :D

First two buys and sells were in the late 90's! The most recent was through a "friend" (who is no longer a friend).

[afc wimbledon]

Really? That seems like it would be a huge PITA for scheduling viewings.

They certainly have lock boxes out in the valley, either that or go to the listing agents office and pick up a key.

[Winsor_Pilates]

They certainly have lock boxes out in the valley, either that or go to the listing agents office and pick up a key.
Valley uses lock boxes, most of Vancouver doesn't.