patrick.net

So are you telling me I can spend $99 here

http://www.californialicense.com/california-real-estate-license-new3.html

and then go take the exam provided I'm a legal resident (i am) and I'm honest (I am)

This will allow me to become a Real Estate Salesman....then after I pass, I just go to Realtor.com and sign up for access??

http://www.dre.ca.gov/lic_fee.html then add that to the $305 the state charges you...so for around $400 plus monthly fees you will be signed into the MLS

If after you do all this, then go buy a house ( your primary residence) You will get the 3% buyers commission fee???

Okay, so doing more research, to become a Realtor you must join your local association...

heres the fee schedule for where I am

http://www.vvar.com/sites/default/files/2011FeeSchedule_0.pdf

Am I correct in thinking that you have to pay $700 a year for all the dues, then $96 a quarterly? so about a $1k a year to be a full blown realtor....or can you skip the dues and just sign up for the MLS?

There's probably more to it but the real estate practice course will go over what a buyer's agent does during the process.

It's my general understanding that the escrow and title people do most of the work during a closing, the buyer's agent just sits around waiting for his check.

Also, the broker's license test is no walk in the park.

If you only get a salesman license, you will have to find a broker to affiliate with, and they charge "desk fees" and will take 1% or so of your commission.

Nomograph says

A buyers agent costs you nothing.

On a $700,000 house the buyer's agent costs the buyer $20,000 or so.

Everybody at the closing table is getting paid by the buyer.

lurking says

EMan says

consumer MLS is the same thing as realtor MLS. There is absolutely no difference there. Just FYI.

You are wrong yet again. The Realtor accessable MLS has many details such as days on market, condo lobby codes, etc. that the consumer can't get from the public MLS site. That's why the Realtor MLS has a space for private information. Please stop spreading misinformation about matters that you know nothing about.

No, you are wrong. All MLS are about the same, the only difference is where they buy the comps data from. There is no such thing as private information, all info is public. All of the data comes typically from the same sources anyway. Almost every mls lets you put in private comments, thats just a basic feature. Not sure why you find it so amazing or can't figure out how to do it on a $24.99/membership mls. And if you can't figure out how to run a property report to get all the details well than you are technologically challenged.

but in order to become a broker, you have to have two years experience as a salesperson....

in order to get a paid membership to MLS, you must be a "broker, agent or appraiser"

is an agent a salesperson?

http://portal.mlslistings.com/newmember/intro/

any way you look at it, with fees, etc your looking at at least $1k for your first year....I guess if you buy your own place and collect the fees, it would make it worth it

EMan says

Consumer MLS is the same thing as realtor MLS. There is absolutely no difference there. Just FYI.

Wrong, absolutely wrong. One of the most important things realtor MLS has is the fee split between buying agent and selling agent, for example. In addition, there are internal notes, and you can search the whole database (i.e. look at comps, histories, prior listings, etc.. For consumer MLS, you can only view active database entries and have a limited amount of data provided to you.

This is obvious to anyone who has used Redfin. Redfin has a note that it blocks certain data from the MLS feed at MLS' request.

If you've ever seen the printout the agent gives you instead of the printout you make yourself, you'd know this.

DM says

My wife is a California bar-licensed attorney, and I've taught law (although not real estate law), so we're not entirely clueless here.

If your wife is an attorney, she can do it herself. In fact, why not? It's a $1000 investment at most, and if you're buying a $500K house, that's $15K - $1K in your pocket for very little work other than taking an easy exam.

DM says

It turns out that there are insurance-related issues (among others) and each one was wary of becoming involved. Think of it: if you're an attorney, why would you want to take the risk of being sued for a measly $1,000, as corntrollio posted? In reality, the price they wanted to review the documents, etc. was closer to $2,500, and that's still not acting as an agent.

A few points:
1) the buying agent can get insurance for this if they do it regularly for buyers; if they're doing it for themselves, then they don't need to be insured; people may have higher or lower risk tolerances for doing this for someone else
2) I'm not suggesting that the buyer pay the lawyer-buying agent $1000 for services, but rather the lawyer-buying agent can pay $1000 or less to take the DRE exam and get MLS access; the fee can be negotiated as appropriate between buyer and lawyer-buying agent
3) what you are talking about for $2500 is reviewing the real estate transaction -- that's my whole point. A realtor is f**king useless at anything legal-related. I recommend getting a lawyer instead of a realtor if you are a seasoned buyer, and negotiating realtor fees down or figuring out another way to get lower fees than 5-6%.
4) if you're a lawyer, this is super-easy -- why not do it for yourself? Especially if you ever buy multiple properties, it'd be worth it.

Nomograph says

The advice to hire an attorney is terrible. Who is going to (a) find a lawyer friend who has nothing better to do, (b) get him to study and pass the broker's exam, (c) engage in a bunch of shenanigans in the hopes of splitting a commission?

You are misunderstanding. I'm not saying tell your lawyer friend to take the exam just for you. Find one who did this for their own house and is still licensed.

DF says

I for one have done a FSBO where I paid an attorney 4 hours to review the docs and the seller met me at the title company office for closing. Saved the seller 6% and yes I'm pretty sure that was a consideration.

This was very smart. A real estate agent is useless for anything having to do with legal issues.

Nomograph says

A buyers agent costs you nothing.

Worst advice ever. The buyer technically pays everybody. The cost of housing is higher because of used house salesman fees. You can treat it as buyer paying half and seller paying half because that represents the substance of the transaction, but to say any one buying or selling property doesn't pay fees to the realtor-industrial complex is just being naive.

darrellsimon says

Then you can buy mls and avoid all the legal shit... getting lawyers involved is always a bad idea.

Wrong. Realtors are completely useless for legal issues. They may say, "oh, I'm really good at helping my clients with their disclosures," but they aren't real estate lawyers and don't have subject-matter expertise at all. If they are really that good at disclosures, you should query whether they are committing unauthorized practice of law.

corntrollio says

If you've ever seen the printout the agent gives you instead of the printout you make yourself, you'd know this.

All that data is available on public MLS. And public MLS is dime a dozen.
If you are that much interested in private shared notes you can sign up as a company instead of individual and pay more. It isn't going to be any different.

corntrollio: I think we agree about the *desirability* of avoiding a buyer's agent and paying by the hour.

But you're making this sound easier than it really is (even for a licensed attorney familiar with contracts, albeit one who works in a non-real estate field).

I'll reiterate my question: if it's so simple, why don't you post a list of attorneys in the bay area who would be willing to do this, along with their contact info? Still waiting...

DM says

My wife is a California bar-licensed attorney, and I've taught law (although not real estate law), so we're not entirely clueless here.

What kind of law did you teach as a non-attorney?

DM says

I'll reiterate my question: if it's so simple, why don't you post a list of attorneys in the bay area who would be willing to do this, along with their contact info? Still waiting...

It's not my job to find you an attorney to do it, and you clearly didn't read my "update" and are making bad assumptions. I am saying rather that this is possible and it's quite simple to do.

Your wife could do it, if she's a member of the bar. Why do you think it's so difficult? Most realtors have very little skill and expertise in anything except pricing, which is quite easy to learn if you study the market, and realtors still get pricing wrong. You could hire a real estate attorney for the transaction to reduce risk on legal issues -- realtors profess to have knowledge of legal issues, but they don't have it. The forms are standard realtor association forms -- again, no special magic here.

Why do you think an agent who is not even required to have a college education is somehow more qualified to do this than a member of the state bar? It would be quite cheap for your wife to do this, it would take very little effort, and you could save thousands of dollars.

corntrollio says

it would take very little effort

I disagree with this. Real Estate licensing tests are filled with questions that you really can't guess at, like the difference between accretion and avulsion, where the origins of the cadastral system are in California, how many acres in a section, etc.

Troy says

I disagree with this. Real Estate licensing tests are filled with questions that you really can't guess at, like the difference between accretion and avulsion, where the origins of the cadastral system are in California, how many acres in a section, etc.

As if lawyers aren't used to knowing shit they will never use again when studying for the bar.

For the record, here's a description from DRE about the test:
http://www.dre.ca.gov/exm_content_broker.html

Sample questions are in this PDF -- you be the judge:
http://www.dre.ca.gov/pdf_docs/ref_book/ref02.pdf

Lawyers could easily get many of these questions right off the top of their head, and some of them are math questions involving simple math. You can also look for the Barron's book for more sample questions.

I am an attorney and a real estate broker with membership in my local MLS (and an avid patrick.net reader) and have closed escrow on over 80 single family residences in the past few years.

Regarding, "Your lawyer friend can then take the fee that would have gone to the buyer agent, 2.5-3% or whatever, and refund a portion to you" I would take this deal all day long, with the amount of fee refunded depending on how far along the transaction is before I am contacted. If you are pre-approved for the loan amount, I do not have to drive all over the place showing property or preparing multiple CMAs and offers (in other words you have already decided what property you want to make an offer on and what price you are willing to pay and can qualify for the loan) and I can get right to preparing and submitting an offer then my fee will be very reasonable. (I do note that after closing offices in 12 markets and shedding 700 agents during the first quarter, ZipRealty says it will no longer offer commission rebates to buyers in the 23 markets where it continues to operate brokerage offices so offering commission rebates to buyers is an endangered business model.)

Regarding FSBO property, if you have the buyer lined up and I can meet with both parties at the same time to fill out the disclosures and prepare the offer and have it accepted (the purchase agreement) I will do any house up to $1m for a flat fee of $4,995.00. This includes, among numerous other things, opening and supervising escrow, ordering and supervising the inspections and providing names of vendors for any subsequent repairs, handling changes to the purchase agreement because of inspection findings (decrease in purchase price/seller credit, etc.) and babysitting the loan officer for the two-month escrow period to make sure he or she gets the job done. In other words, I am involved in all aspects of the transaction until title changes hands.

What I have found after operating as a discount broker for the past few years is people are apparently happy paying 6% of the equity in their home to someone from their church or someone with the right logo on his or her business card. Very few people are willing to think out of the box and try a different approach, either because they are lazy or scared. Either way, unless the consumer demands, through effort and action, a different compensation model, the 6% regiment is here to stay. There are alternatives, but consumers need to put a little effort into finding them, which can easily be done using the Internet. I for one do not have tens of thousands of dollars to spend to try and convince consumers that they do not have to pay 6% of their equity to sell their home. It should be obvious right?!

EsquireREALTOR says

I am an attorney and a real estate broker with membership in my local MLS (and an avid patrick.net reader) and have closed escrow on over 80 single family residences in the past few years.

Awesome. :) It sounds like your prices are very reasonable as well. Keep fighting the good fight.

Regarding the MLS, it is just one giant database that contains information and pictures regarding houses. When a broker/agent looks something up/does a search, certain data fields are queried and the resulting data appears in the broker/agent report. When the same search is done for a non-MLS subscriber, a seller or a buyer, certain data fields are not queried so that information does not end up in the consumer report. Most notably, confidential remarks and the amount of commission offered to the selling (buyer's) agent is absent. Confidential remarks usually consist of showing instructions, i.e., "Call 30 minutes before, then go and show", "Don't let the cat out." Occasionally the remarks will be more telling such as a "Contractor's Special" or "A real tear down."

Regarding the commission, I am contractually bound to pay the commission listed in the MLS. While it is true that the money actually comes from the Seller, the law treats it as the responsibility of the listing broker to pay the selling broker. So if I list a property and the seller agrees to offer the selling broker 3% and I list the home on the MLS and offer the selling broker 3% and then the seller changes his mind and only wants to offer the selling broker 2.5% but the selling broker saw the 3% listing and his buyer submits an offer then legally I am out .5%, which would really suck, so it is important that the commission offered to the selling broker be in the MLS listing data and be correct so there is no misunderstanding when it comes time to close escrow.

Every Agency has two major groups of agents: one or few, usually brokers- owners, who focus only on listing properties. Those are RE Kings, use they connections to list as many properties as possible. Most agents, who work for agency, are the guys who run around town and shows properties to prospective buyers. Whenever they work for listing agency or shows properties from MLS, they STILL represent the SELLER- The owner who agreed to pay commission.
Every agent can say, regardless if it’s true or not “we have multiple offer” simply because buyer has no power to check it out.
When listing agent approach the owner who wants to sell property, he usually shows him for how much the similar property were sold recently. To make owner happy he is adding 6% commission on a top of that. This fact alone artificially drive prices higher with every listing.
Now is the hint: If your offer is 6% below listing price, you are the closest to the real market value.

robertoaribas says

so yeah, great theory, but waste of time...Another thing is I have now spent 15 years driving around Phoenix showing homes... You don't think that gives me a little bit of market knowledge about this area that your office bound attorney might not have?

If you mean knowledge of pointing out features like granite counter tops and stainless steel appliances, then sure.

robertoaribas says

Is your new lawyer/Realtor going to drive around with you opening all the homes too? They can't give you the mls lockbox key after all, and good luck getting foreclosure listing agents to open the door for you, they won't even return your calls.

Agreed! The system must be changed as almost all the realtor "benefits" are getting them to do things that people could easily do themselves. The database should be open, owners can have open houses, I should be able to bid openly with the owner, etc.

One day we'll all be dealing with the owners once people get tired of this shit. You're just a greedy middleman road block.

The best way to buy a house is from FSBO directly. (For Sale By Owner).

You get the deal you want, and at the same time shutot the middle man.

MoneySheep says

The best way to buy a house is from FSBO directly. (For Sale By Owner).

You get the deal you want, and at the same time shutot the middle man.

Yeah, and the amount of houses doing that are slim to none. People play the Realtor game because they have no choice, but it shouldn't have to be this way. They've stepped in as middlemen and locked away everything to keep it that way. You'd almost need government intervention to get all the shadyness out of real estate.

EMan says

corntrollio says

If you've ever seen the printout the agent gives you instead of the printout you make yourself, you'd know this.

All that data is available on public MLS. And public MLS is dime a dozen.
If you are that much interested in private shared notes you can sign up as a company instead of individual and pay more. It isn't going to be any different.

You're able to find the listing agent's contact information as well as offer instructions and where to obtain disclosures? Try calling the listing agent for info that is on the private remarks and see what he will do.

The private remarks are where the agents go to stab buyers/sellers in the back. They give away minimum sale prices, disclosures about the property that your buyer agent may want to withhold from you, etc.

The most recent important private remark I've seen mentions something about an aggressive dog in the backyard, and not to go there. I'd like to see someone surfing the web find that address and go in the backyard :)

robertoaribas says

another stupid thread...written purely as conjecture by the uninformed.

Yes an attorney can act as an agent. No, most won't do it, and most several years out of law school have forgotten everything that isn't in their area of practice. I'm sure a 20 years divorce attorney will be quite up on zoning issues for real estate...

You did not read the original post. Assumptions: 1) the attorney is a friend who already has a license and used it for buying/selling their own house already and can quickly close a transaction on the side; 2) the attorney is not advising on real estate law, but only just closing the transaction as a realtor would do; 3) the attorney could optionally advice on the transaction if they have subject matter expertise, but you could also hire a real estate attorney.

Read before you criticize. The assumption is based on the fact that an attorney in California does not have to take additional coursework to take the real estate exam, like a non-attorney would. The exam is a cinch for attorneys -- these questions are far easier than the Bar.

Also, this assumes you have already found a home.

Yeah, duh. I said that -- the purpose is just to close the transaction. I'm saying that most of the other services realtors provide are mostly useless. Driving around, I can do myself. Useless middleman salesman does not need to do that. You're not even in California, so I'm not sure why you're talking.

This is just silly. I assume your lawyer friend is going to study, pass the exam, pay all the fees, complete the background check, THEN work for free as your buyer's agent so you can save the 3%. Really?

Dude, just man up an pay the fee or invest your OWN time to learn enough to buy the property. You don't need a license to purchase for yourself, but you do need some smarts.

Zoas says

This is just silly. I assume your lawyer friend is going to study, pass the exam, pay all the fees, complete the background check, THEN work for free as your buyer's agent so you can save the 3%. Really?

You people can't f'in read. The assumption is that the lawyer friend already is DRE licensed because they bought a house themselves. I'm going to need to move the assumptions to the top because you people who don't read are getting on my nerves.

The lawyer has already passed a much harder exam, paid much higher fees, and completed a much more intensive background check. DRE is a joke compared to the California Bar.

You people can't f'in read. .

The lawyer has already passed a much harder exam, paid much higher fees, and completed a much more intensive background check. DRE is a joke compared to the California Bar.

What do you mean "you people" Har, har, har.

Seriously though, your whole fantasy premise makes you come off like a cheapskate buyer looking for a free ride. Only a desperate realtor or attorney would get involved with a client like you.

If the DRE exam is such a joke you'll have no problem passing it so you can start brokering your own deals and those for people that don't want to pay the 3%. You'll do it for $1000 bucks, right?

The idea that attorneys who typically bill out at anywhere from $275 to $400 per hour would touch this is ludicrous. On these low end deals realtors are lucky if they net out one tenth that amount after spits and costs.

There are other ways to save money on the deal, but this ain’t one of them.

Zoas says

If the DRE exam is such a joke you'll have no problem passing it so you can start brokering your own deals and those for people that don't want to pay the 3%. You'll do it for $1000 bucks, right?

I posted the sample questions above. The attorneys in the crowd will agree with me that several questions are simple for attorneys and others just involve basic math. Some of them are ridiculously basic for lawyers (i.e. you wouldn't even need the in-depth knowledge that you got studying for the bar to answer a basic multiple choice question about consideration).

Zoas says

The idea that attorneys who typically bill out at anywhere from $275 to $400 per hour would touch this is ludicrous.

You must be dealing with non-big firm attorneys. Big firm attorneys can top out at 4 digits if you're a partner in a specialty, and even $700 or more if not. Other attorneys work for corporations or for government or even (gasp) public interest, and don't make that kind of coin. In fact, there are a large number of attorneys who make quite a bit less than 6 figures if you look at national numbers. Not that many people work at big firms, and the number who do has been dwindling since 2008.

3% of $500K-$1M is a lot of money, especially if you buy more than one house. It'd be a bargain if you're an attorney to broker your own sales in these cases.

If you're not interested in putting in the effort, fine, but it's not hard. I know people who've done it, sometimes because they brokered two sales of their own and two family members'. Again, no driving around -- their relative found the house ahead of time and asked them to do the paperwork. My other buddy has their house plus two rentals, and his wife is an attorney and took the exam while on maternity leave, so they've probably saved at least $55K in brokerage fees, probably more. Instead they paid about $2500 to their real estate lawyer per transaction to review the standard realtor forms and got real legal advice on disclosures.

Honestly, this sort of goes to the "how do people get their money?" thread and the general idea that many millionaires are unassuming folks who aren't flashy but just work hard. If you're an enterprising person, there are tons of ways to put real money in your pocket. Why should you roll $55K in realtor fees into your mortgage and pay interest on it for 30 years?

With realtors making $30K-60K on single transation, may well explain "how do people get their money?" and some local income statistics over the past 10 years.

Used a lawyer as our "buyers agent" in the 1980's, because the house we wanted was FBSO and that deal made me nervous. It went smoothly with using the lawyer. I don't know why more buyers don't do it that way.

I am looking to buy at around 2M in santa monica, los angeles, north of montana ave. Now, I can either go with redfin or try to find an attorney who has broker licesnse and negotiate with him/ her some flat fee or per hour deal. I don't have an attorney friend. Advice will be appreciated.

La Dude says

I am looking to (transact) at around 2M ..... Now, I can either go with ... or try to find an attorney

2 M is a lot of money for something to go wrong in a transaction. Realtor® or no Realtor®, it sounds like maybe you oughta also have a lawyer reviewing your stuff before signing off on things.

La Dude says

I am looking to buy at around 2M in santa monica, los angeles, north of montana ave. Now, I can either go with redfin or try to find an attorney who has broker licesnse and negotiate with him/ her some flat fee or per hour deal. I don't have an attorney friend. Advice will be appreciated.

Find a fsbo and have an attorney help you. If you find something that's listed, offer them a reduction to an amount that you feel is reasonable, because you'll be paying the full real estate commissions. With an attorney, you might be able to get them to reduce the commission - re agents & brokers are desperate these days and might be willing to do anything for a sale.

So an identical home to mine sold next door for 2M using an agent. Now you want to buy mine FSBO. Do you think my asking price will be 2M less 6%? If you do, you don't understand people very well.

No, Zoas. I don't think you understand people who can afford a 2M home. Even tho there's some confusion above over whether it's the buyer or the seller paying 6%, when you're selling a house it sure feels like you're the one paying it. Mainly that's because of the settlement statement, where the money/purchase price comes in at the top, then you go through all your deductions and arrive at how much you put in your pocket and take away from the table.

If you can show me how to put more money into my pocket, I'm going to listen to you, and on a 2M property not having to pay out the 6% commission will do exactly that.

Most people who are wealthy have some smarts, and can discern that it's not just about the asking price.

And here's the other way to find FSBO's, in answer to those who have responded that there aren't many in inventory. You drive around the area you want to live. You see a house you want to buy. You walk up and ring the doorbell. It works.

Nomograph says

A buyers agent costs you nothing. Interview, find a good one, and use them. Don't let emotions (i.e. RE agent hate) get in the way of business or it will cost you.

Who said anything about hate? Once again, a lecture from Nomo about how one should feel and react. Even in the absence of emotion, he'll just use projection to justify his holier-than-thou, sanctimonious bullshit.

The RE industry is a cartel. It makes billions of dollars by forcing itself as a middle-man onto the market. People spend years trying to pay down their mortgages just to squeeze a profit. God forbid they want to discuss a way to circumvent this criminal enterprise and save ten thousand dollars.

klarek says

hate?

..and jealousy and what not. I am learning new words from uncle Nomo everyday. LOL.

I still think it's easier to find a Realtor(R) friend than a lawyer friend.

vain says

I still think it's easier to find a Realtor(R) friend than a lawyer friend.

Are you saying lawyers lie more than Realtor(R)s?

Zoas says

So an identical home to mine sold next door for 2M using an agent. Now you want to buy mine FSBO. Do you think my asking price will be 2M less 6%? If you do, you don't understand people very well.

Probably not. But I can easily produce a prelim HUD-1 showing a breakdown of all closing costs coming out of the sale proceeds prior to the seller being compensated, and then I can show you what one would look like without 6% coming off the top for commission. I think I know which one you'd rather sign.

Sale price means jack shit. Form HUD-1, Line 603, is all the seller is concerned with. I show you a HUD with a higher amount on line 603 than your neighbor, we're good.

Zoas says

So an identical home to mine sold next door for 2M using an agent. Now you want to buy mine FSBO. Do you think my asking price will be 2M less 6%? If you do, you don't understand people very well.

It's because of people like you that I'm using an agent (he's kicking back 2/3 of his commission) rather than look for that lone intelligent needle in the haystack of delusional sellers, the person that realizes it's mutually beneficial for us to remove agents and their cartels from the process.

So while you might not acquiesce to taking 6% less sans-agent, just know that since your proceeds are coming directly from me, the buyer, I'm going to buy your house for 6% less with an agent than I would have if you were more sane. That's a $120k lesson that costs me nothing either way. I hope your agent at the very least can show you some quality loving for that kind of money.

Zoas says

Do you think my asking price will be 2M less 6%? If you do, you don't understand people very well.

But your asking price could be $2M less 3%, and you'd still be better off FSBO. The buyer would think they got a deal, and you'd get more money in your pocket. I get that buyers have an ego and want the same $2M their neighbor got, but in reality the neighbor got $1.88M-1.9M (5-6% commission robbed) in their own pocket. It always pays to look at financial substance, and make a mutually beneficial deal.

There are sometimes expectations set on $2M properties -- e.g. that they are staged (especially in the Bay Area). However, it's easy to solve these things -- if you're concerned, you can find your own stager instead of choosing your realtor's favorite stager who throws them a backhander (good advice generally).

robertoaribas says

That attorney will not be advising you on real estate, and will work for only a small payment...

They could advice you on real estate if they have the expertise, and just babysitting the transaction doesn't require much effort. You're just glorifying the work of a realtor -- there isn't much when you eliminate driving around because used house salesmen use standard forms and don't have expertise on those forms. Add that to the fact that the buyer's agent doesn't actually represent you, and your friend will.

In any case, what I'm saying is generally good advice for attorneys at a minimum. It's easy to babysit your own transaction -- minimal effort, high gain. Any lawyer is more than adequately prepared to babysit their own transaction.

The fact that people might be given comfort by having a person, who has no ethical obligations, who has no standards for conflicts of interest (and may even be working in the same office as the listing agent), who cannot help them with serious legal disclosures, who are paid on a commission basis, and who may not even have a college education, represent them on the largest transaction of their life is terrifying to me.