why do I need a realtor to BUY?

[DementedReality]

Originally Posted by Realtor 1

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]

Originally Posted by Slava

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]

Originally Posted by DementedReality

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]

Originally Posted by troutman

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

Originally Posted by Realtor 1

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]

Originally Posted by Slava

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]

Originally Posted by Burn13

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]

Originally Posted by Bagor

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]

Originally Posted by fotze

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.

Originally Posted by Bagor

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]

Originally Posted by Slava

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]

Originally Posted by fotze

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]

Originally Posted by fotze

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]

Originally Posted by troutman

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]

Originally Posted by Realtor 1

"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]

Originally Posted by 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.

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.