WatchFALSE. As a buyer, your own real estate agent is your worst enemy. His financial motive is to get you to take out the maximum mortgage and to spend as much as possible as quickly as possible. Why? Because he gets paid nothing if you do not buy, and he gets paid more if you overpay for a house.
Those two perverse incentives neatly combine to give your agent a powerful motive to push you into grossly overbidding, because that gives him a greater chance that your offer will be accepted, so that he can quickly gain the maximum profit from your mistake. Your agent's financial motives are the exact opposite of your best interest.
Agents take $100 billion dollars each year in commissions from buyers. Agents point out that the seller writes their commission check, but they always fail to mention that the seller gets that money from the buyer. Who brings the money to the table - the seller or the buyer? All money comes from buyers. No buyer, no money. Even if we politely agree that the seller writes the commission check, doesn't that payment then show who your agent is really working for?
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50 threads
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Oakland, CA
Nicely stated and it's scary how many "buyers" are not aware of buyer/realtor dynamics and conflict of interest.
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46 male
Menlo Park, CA
Thanks! I'm making a separate discussion thread out of each of these arguments:
http://patrick.net/bogus.php
That will allow people to comment on them, and maybe pointing out where my reasoning is wrong.
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29 threads
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Denver, CO
Patrick says
I think the primary motivation he has is to get you to buy SOMETHING. The marginal value to him of you spending $500k vs $450k is small in comparison to the risk that you won't get approved, will get cold feet, or whatever. I'm not sure, but I'm guessing they'd "go for the kill" at the $450k price level "every time" rather than risk it.
Similar thing can be said about when they represent your house...They just want it to sell...extracting the maximum value isn't nearly as important as getting the deal done.
BTW, I look forward to seeing each one of these posted as a thread, because I think some of your arguments are thin and welcome the discussion around it.
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5 threads
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But if you use the seller's agent represent you as a buyer you have a better chance of your low ball offer winning over higher bids because of the the listing agent's double dip commission.
God bless greed and the NAR.
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8 threads
150 comments
El Cerrito, CA
I have a solution for all you anti agent using folks. Don't use an agent. Duh? Represent yourself or hire a lawyer for $400 per hour and after you make many offers and don't get the property and are tired of paying a Lawyer all the fees for wrting offers and failing then decide if it is worth it to use an agent. The other great solution is what is promoted on this web site...Never Buy Just rent your whole lives and have nothing when you are ready to retire or to call your own home. You can't have it both ways.
Either buy or rent. If you rent you don't need an agent. Or like eoitaph said, " Use the listing agent" bc your low ball offer has a better chance of being accepted! Although that would hurt the seller of the home it seems he is only looking out for himself.
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8 threads
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El Cerrito, CA
PLease see my previopus comments on Gold and Silver from a personal standpoint and experience. Gold and Silver do not produce dividends or rental income.You only benefit If you sell it and take your profits. My Father bought Gold in 1980 for $800 per ounce and Silver at$50 per ounce. He died in 1997 and Gold was $200 per ounce and Silver was $5 per ounce. Gold only came back in the last 5 years or so to the price he paid in 1980. Silver is still far below $50 per ounce and it DOES NOT produce
income. Rental property produces income and revenue every month year after year and you can sell it easily most of the time, refinace it and lower your payments,Gives you a tax deduction,you can pull money out if you have equity and reinvest in other things and write off the interest on the money you pulled out of it, or live in it? Of course it takes work and maintenance but it is worth it.It will return in many different ways and if you rent it the tenant pays off your loan for you?
ALways nice to own a home with no payments. You still have your money but instead of having in the bank paying nothing or a mutual fund etc you receive monthly income for your home if you decide to rent it .
I cannot see any other investment to cpampare that with if you do it right.
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14 threads
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Beverly Hills, CA
mike2 says
AND I have another! I have tried it and this strategy WORKS. Use the exact same Realtor lying, cheating and deception tricks that they used...but in reverse. Sort of like a Realtor jujitsu. The more "tricky" they are, the more they get screwed. On the real nasty lying cheats like "Highest and best" you can disembowel them and "almost win" ( these criminals still get their commissions--but they don't get to steal the property). The problem with this strategy is that you never know WHICH property will be favorable, so you must make an offer on many (until the Realtor games collapse on them) . hint: the biggest fear most agents have are agents they do NOT know. Keep them guessing. Their second biggest fear is TIME. Their least fear is prosecution. They don't even care if they get caught since "everyone else is doing it" (other Realtards)
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8 threads
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El Cerrito, CA
I am a victim! I am a VICTIM! Everyone and Everything is against me. I can't buy a home, there must be a conspiracy against me...Somebody save me. Pleeeze.
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8 threads
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El Cerrito, CA
A negative asset? Oh really? tell that to me when I go tothe bank every month with a cash flow od over $10000.00 after all taxes, insurance and maintenance are paid? I love my renters, they keep me paying all my bills. No negative assets here.
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8 threads
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El Cerrito, CA
It doesn't matter Rental watch what you or they believe. Keep renting all your life and payig the landlords mortgage for him, that is fine. If you want to rent go ahead, your choice. I have expereinced both and owning produces $$. Do you own or have you ever owned any Real Este Rental watch? Just asking.
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6 threads
198 comments
mike2: "Keep renting all your life and payig the landlords mortgage for him"
I see mike2 graduated from NAR university with a major in "Tired old bullshit which Realtors have been spewing for decades."
Congrats!!
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46 male
Menlo Park, CA
mike2 says
It all depends on the price you pay. Owning does not produce money if you overpay for the house.
I'm trying to classify all the bogus arguments that turn up over and over. I think this one fits the situation:
http://patrick.net/bogus.php#1216943
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3 threads
243 comments
Los Angeles, CA
Patrick says
True, but if he acts ruthlessly accordingly, that may make sense if you are his only customer in his career. It may be better in the long run to worry less about the extra $100s in commission from a more expensive place, and more about what the client wants, which can pay off in referrals, positive online reviews, etc.
Also, at some point, if he pushes too far, the buyer can't qualify for the loan, the appraisal doesn't come in, in other words, time-consuming and potentially deal-breaking headaches start to arise.
swebb I think nails it.
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38 threads
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Pleasanton, CA
Premium
JG1 says
It is really not the extra commission that is the main problem though. It is the all or nothing. If the deal is really bad there is no benefit in your agent trying to talk you out of it. It would be like him/her saying "I don't like money! In fact I hate it". It will not happen, so Patrick is right in saying the agent doesn't really work in your best interest. His interest lies in the deal happening first and then contemplate if the extra few 100s are worth him/her being even more dishonest.
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38 threads
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Pleasanton, CA
Premium
mike2 says
Renting has produced much more wealth over these last 15 years in the BA than owning would have. Not even close. I can purchase two houses now, whereas owning I would still have another 15 years of payments. It really comes down to if you throw away the extra money you save by renting or do you invest it with discipline. $$ talks.
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Fort Lauderdale, FL
BayArea says
There's much less conflict of interest if you sign a contract with the buyer's agent. No one wants to do that so they're often not shown FSBOs, listings that don't pay enough commission, or listings that don't pay a double dip.
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I think the point is to hire an agent to represent YOU in the transaction. They are still paid by the seller but, they are not representing the seller, they are representing your best interest. I agree there have been way too many realtors that were only looking out for their best interest. With the market over the last 4 years having culled out the weak, the remaining realtors will be more professional, courteous and responsive to your needs. Talk with several and see who you like and get along with. It should be a process, not something akin to putting your money in a vending machine, pull the handle and you're done.
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3 threads
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Fort Lauderdale, FL
gumby57 says
You sound like a Realtor. In practice no they're not. At best they're a transaction broker (duel agency). There are exclusive buyers agents but most buyers don't want to sign a contract with them. If you didn't sign a contract with them or pay them up front don't let deluded or dishonest Realtors fool you into trusting them.
BTW the market didn't "cull out the weak" because most of the worst Realtors are the part time ones. Those are still out there. You sound like a NAR advertisement.