patrick.net

Lets see now an associate on either side of the deal gets $150/$10,000 of sold price. The respective brokers also share $150/$10,000 of the sold price. But if the listing agent is also a broker and he/she doubles as a Buyers agent they get $600/ $10,000 of the sold price. That's quite a big difference which is Four times the standard commission. we all know that these slime will work as hard as they can to keep property prices as high as possible. There really is no such thing as a "Buyers agent". The "Buyers agent" is paid according to the contract signed between seller and listing agent. This subordinates the Buyers agent to the whims of the listing agent. If in the rare chance that a listing agent LIES to anyone, who will know? Only the listing agent knows, we are trying to protect the confidentiality of all those cash buyers unless we want to tout high offers to seek higher and higher offers when there may be NO other offers. Unfortunately, there are no Real estate police. I am a prospective buyer and have interviewed sellers after the alleged highest and best offers were tendered. The problem is the sellers saw none of these offers. Perhaps the agents were so busy they forgot to tell the seller?

I found the best procedure is to go with the dual agent. In many cases their greed will be greater to get both sides of the deal that the drive to keep prices higher and higher which results in 50% or less of the commission pie. Once you have an accepted offer you can always back out with the proper contingencies. You need to have an attorney review the contract to make sure the Dual agent isn't also trying to stick it to you as well as the seller.

If agents only treated customers as good as the way they treat themselves, to all the best goodies and treats that are for sale. The JUNK and fixers are what remains for the rest of us who are not insiders or agents. There is an excellent case to restrict this insider trading and touting and shilling that is the engine that keeps this circus side show called real estate running.

Grifters using touts and shills is illegal for everything but the "business" of real estate. Real estate sales provides a good training ground for con artists and white collar wannabe Ponzi schemers. This is where many of them get their start. From used car lots to million dollar RE deals as long as they get to legally screw others over for more money, they will be happy. They are a an evil and sordid lot. Hubris, psychopathy and narcissism....why are their photos on everything from business cards to websites? EGO and GREED.

Obviously you figured it out. The cons are you will have drive yourself to the home and read the purchase contract more closely. Sales volume is about half what it was during the bubble so these guys are starving - almost every agent in LA county will chew off thier own arm to double dip (ok im exagerating... they will chew your arm off maybe! lol)

Dual Agency is what its called and its legal in CA.

I would never deal with a dual agent; I know people who have done it and had no problems (I'm not in California), but I wouldn't chance it.
With a buyer's agent, preferably from a different brokerage, a realtor is focused on you instead of a dual agent who wants to please the seller before you.
I am also skeptical of dual agency - there is still a common broker in the picture who gets both sides and could affect the sale.

Having a so called buyers agent is just a way to employ another out-of-work retard.

Well, if you FSBO, realtors will do anything they can to steer the buyers away, they will even put up a phantom foreclosure listing on zillow, right on top of your house.

chemechie says

With a buyer's agent, preferably from a different brokerage, a realtor is focused on you instead of a dual agent who wants to please the seller before you.

Could have sworn that I read somewhere that all realt-whores are legally obligated to the seller.

And based on the buying realt-whores that I've worked with, they wanted me to buy and would even be talking up the property while I was looking at it. (My GF and I still make fun of this one realt-whore (buying, not listing) that showed us a place - he was practically gushing over the cherry cabinets which "added quite of bit of value to the "home"")

Seriously, what service is a buying realt-whore going to provide me? Of course I would do due diligence and have a real estate attorney look over the offer letter the listing agent would write for me.

Other than that, I'll have my own inspectors check the roof, foundation, throw a scope down the sewer line, etc.

What "focus on you" do you mean? Realt-whores don't drive anyone around in their cars anymore. They just meet you at the house and unlock the f-ing thing. I can have the listing agent do that.

Offer letter? Zipform writes up the 8-page letter and, yes, there's a little legalese but, for the most part, is pretty straightforward.

Malkovich says

Seriously, what service is a buying realt-whore going to provide me?

Most buyer agents I have run into, tell me how their "service" is free and that I really need representation and a Realtor on my side. They make me want to puke.

jvolstad says

tell me how their "service" is free

They are correct in one regard - you get what you pay for. Actually in the realtors case you would be better off without them at all, even if they said they would work for free. No one, I mean no one, is willing to put more time and energy into your house investigation than you and your family. To me, it is not about the 3% or 6%. It is about these people hanging around dragging me down. The amount of work I do to find the house and run the numbers and analysis is orders of magnitude more than all the other people involved in the whole process (and there are dozens of them). No one cares more than you, so it makes no sense to me why we don't have the freedom to just go it alone. Talk directly do the seller and cut out all these money grabbers. Idiots. If you really want to help people then go into the medical profession, or volunteer at a charity.

I agree. A buyer agent is useless if you are able to make your own decisions. The only thing a buyer agent is good for is to 1) open the door, and 2) get the listing agent's contact information easily, and 3) encourage you to offer higher not for higher commission; but for a better chance to win any commission at all.

You will definitely need to be the highest bidder to win the property if you use a buyer agent.

If it's a short sale, it will be everybody vs the bank. Keep in mind the listing agent has 1 motive: to make the sale go thru no matter what it takes.

Seriously it costs less than $300 to take the CA online real estate courses and they are easy.

The funny part is that there are a bunch of laws you have to memorize (like 1968 civil rights law, etc) and they tell you EXACTLY what is illegal and what not to do. WHICH is funny because if you are a greedy sociopath the classes give you a recipe for fraud by telling you 'dont do these things' (my list of faves below , all illegal yet common in the past or present).
1. illegal to drive minorities to minority neighborhoods ('steering'). (Im not sure how to make money doing this)
2. its illegal to 'induce panic selling' to get a listing. (funny if you told someone in 2006 to 'sell now before prices crash' that was probably illegal! ha!
3. illegal to flush offers - all must be presented to owner (obviously this is huge and common to flush offers, mostly by hiding from them somehow behind voicemail, put wrong address in MLS, steal key from lockbox, chain gate shut so no one can view yet appears for sale in mls so bank will approve SS to your confederate, etc)
4. illegal to withold knowledge of home defects.

if you know these laws you are armed with weapons in the transaction.

Buyer agents are useless. We just need one Realtard to complete the transaction.

My early success in Buying Real Estate below-market is due to this amazing "pit-bull" negotiator, who consistently got my way below asking price offer accepted. I truly believe certain people are "born" salesman, and I am not. I go into every real estate transaction trusting no one, including myself, and I find it's always better to hire a "trained gun" to be part of negotiation.

But it really seems that the buyer is much better off just negotiating with the seller's agent. Without a "buyer's agent".

An experienced sellers agent, has been involved in many negotiations, and knows every trick to use on the novice buyer. Thry have had many hours of seminars and workshops and how to close a deal. The good ones make you feel part "of the family" talk you into something they want to sell you, and you don't even know you have been fleeced.

LASVEGASWINNER says

May I suggest you read Donald Trump's "Art of the Deal" and tell me4 how well he has treated others in his climb to the top. I don't think he is bothered by what is coming around.

BUYERS AGENT LAS VEGAS BANK-OWNED HOMES

You mean the guy who managed to bankrupt a casino?

He was born with a silver spoon in his mouth, cash stuffed into his pockets and filled his first diaper with diamond studded meconium.

Yeah, that was a really difficult "climb" to the top.

*edit*

Oh, yeah I almost forgot... Then there is also this:
http://www.salon.com/2011/04/18/donald_trump_net_worth/

This buyers agent from vegas is so funny. Typical agent line 'bull dog negoiator' haha. (its also hilarious how be brags about his success, mentions donald trump and probably some other smarmy slimeball buzzwords salesmen and con artists use. next he will guarantee you 30% returns and name drop Kiyosaki! lol)

Buyers agent has zero ZERO room to negotiate - right from the start they are adding a 3% premium to the deal. Thats 15k on a 500k property! So if you 'give' this 15k to the LISTING/SELLING agent its not hard to imagine they will flush other offers, or not let other offers even be submitted to the loan owner/undawata owner or bank and slam your low ball offer home.

If you overpay by 100k they would still want to flush your offer since the extra 100k in price would only add a very small commission to the sellers agent whereas taking the double commission is like selling the property for DOUBLE the listing price. (ask yourself, would you do something as simple as put the property as pending asap in order to double your yearly salary? YES YOU WOULD you have bills and a family just like they do.

i got shut out of deals before many times using a dumb buyers agent. it doesnt matter if its a down market or up this is always the case. remember its legal and considered ethical by the NAR. Only a dumb noob uses a buyers agent. This board is filled with them.

PockyClipsNow says

Buyers agent has zero ZERO room to negotiate - right from the start they are adding a 3% premium to the deal. Thats 15k on a 500k property! So if you 'give' this 15k to the LISTING/SELLING agent its not hard to imagine they will flush other offers, or not let other offers even be submitted to the loan owner/undawata owner or bank and slam your low ball offer home.

If you overpay by 100k they would still want to flush your offer since the extra 100k in price would only add a very small commission to the sellers agent whereas taking the double commission is like selling the property for DOUBLE the listing price. (ask yourself, would you do something as simple as put the property as pending asap in order to double your yearly salary? YES YOU WOULD you have bills and a family just like they do.

Yeah, it is sounding like the best way to get used-house-salesperson to work in your best interest is to go with the seller's agent.

"using a dumb buyers agent." Brilliant! Why would you hire such a person to negotiate.
It's the same logic as representing yourself as your "lawyer" in a court of law. Having gone to a few negotiating skills training, I can assure you that you will be at a disadvantage when a truly skilled agent works you over and you won't even know it.

LASVEGASWINNER says

It's the same logic as representing yourself as your "lawyer" in a court of law.

No hiring a real-estate agent is nothing like hiring a lawyer. It is a totally different pay structure and business model.

A lawyer that got paid by the prosecution -- and where said pay increased in proportion to increases in your prison sentence -- would be operating under similar incentives to a real-estate agent.

The pay structure of a buyers agents incentives them to work against the best interests of the buyer. Why would I hire such a person to negotiate?

As stated by others in this thread, at least a double-dipping sellers agent is motivated -- by the pay structure -- to get the buyer a better deal.

uomo_senza_nome says

I would say - find a buyer's agent who would fit your needs and negotiate his/her commission to be completely unlinked from the transaction.

This has been discussed in this thread:
http://patrick.net/?p=1074661

You may find it interesting.

The problem is that an individual agent does not have much power in affecting the pay structure of real estate agents.

As said by gregpfielding in the afore mentioned thread.

...The problem is that any of the big (or even medium) brokers would not allow me to do business this way. The other agents would revolt. And they would complain that it cheapens the brand.

I toyed with putting together a straight-hourly pay structure, where you pay me whether the home sells or not, or you buy a house or not. This really is the way it should be in my opinion. But the brokerage community won't allow it.

leoj707 says

The problem is that an individual agent does not have much power in affecting the pay structure of real estate agents.

So the NAR behemoth won't allow what's in the best interest of the buyer?
Brilliant.

I think then the only other alternatives to ensure you don't get fleeced is if you know someone personally who's got the training. or do it yourself

Time and money are the key tradeoffs as I see it.

But I really think the people interested in buying high-end residential properties should be very careful. They can easily get fleeced by the agents.

Of course if I was a high-end buyer, I'd take my time to get myself equipped with as much knowledge as possible prior to the buying process and I'd do it myself.

Its harder to get fleeced now.

I remember in 2005/06 it appeared that half the >1m homes were actually being flipped by Agents. All of whom got liar loans/zero down/cash back at close. If you got special access to homes for sale before they go into MLS you can have your conferderate buy it to flip.

Of course all these agents went BK and now liar loans are gone mostly. Anyone in america could buy a 1.5 mill home in 2005 with zero down and no job or assets and leave closing with 50k cash back. Whatacountry! YAY Greenspan!

PockyClipsNow says

Whatacountry! YAY Greenspan!

Sad but true. Fool the people into becoming debt(excessive) slave - birth place of widening gap between poor and rich. America will not be the same if this is not fixed.

PockyClipsNow says

Anyone in america could buy a 1.5 mill home in 2005 with zero down and no job or assets and leave closing with 50k cash back. Whatacountry! YAY Greenspan!

Yeah I agree, ridiculous. The smart ones were selling their houses at that time or buying CDS against those worthless paper.

PockyClipsNow says

Its harder to get fleeced now.

Not sure about that though. Interest rates are at an all-time low, and if a buyer has the ability to buy -- then the likelihood of getting fleeced is still there. Low interest rates provide a floor support for prices.

Sure--we don't have truck loads of people competing purely because underwriting standards have improved from 'worst' to 'alright'. But lower interest rates still encourage buyers who are borderline qualified but high risk.

uomo_senza_nome says

But lower interest rates still encourage buyers who are borderline qualified but high risk.

That's the game.

uomo_senza_nome says

I would say - find a buyer's agent who would fit your needs and negotiate his/her commission to be completely unlinked from the transaction.

Fact of the matter is so, so many people (myself, up until recently) STILL think a buying realt-whore is a necessary component to buying a place.

Why would a psychopathic, greedy realt-whore offer his services for a different payment structure than a possible 3% of a sale price?

Would they accept an hourly rate for their services? A set fee regardless of the sale price? How does one determine such a fee?

Just think, on a $500K house, your buying realtor gets $15K in commissions. Assuming he takes you around to 10 properties, and say 2 hours for each visit (to simply unlock the place), and then you find a place you want to write an offer, offer letter takes about 15 minutes to fill in the blanks and render but let's just say 4 hours for calls back and forth with the listing realt-whore.

Add that up and you've got ~25 hours. $15k/25 = $600/hr

Those are pretty good wages for a high school education and some rinky dink realt-whore license certification that almost anyone with a GED and some cramming skills can pass.

What realt-whore would give up this kind of pay? Never heard of one.

Just think, on a $500K house, your buying realtor gets $15K in commissions.
The RE broker (under whose license the buyer's agent operates) usually gets a 50% cut, so the realtor takes home $7,500.
I don't have much to add to the discussion other than to say, of course, most of what I've learned on the topic comes from pat.net. The first I heard of 'dual agency jujitsu' was from FormerAptBroker. He actually holds a license but doesn't take the 3% for himself. Instead he finds that he gets more mileage by engaging the seller's agent on his behalf when buying properties -- that certainly says a lot.

Yes FormerAptBroker had useful sage advice - VERY RARE and you need to have some basis of experience to even recognize it when you hear it.

Its true mostly there are four commissions paid out depending upon how it is agreed that they split it. 2 brokers and 2 salesmen is normal BUT if you get a selling broker that is double dipping he gets all 4 shares. Thats how you make a living when sales volume is down 50% from peak bubble.

Interesting discussion. I would like to add a few things as we purchased late last summer.
The things I see are this:
1. You are under no obligation to pay X% commission unless you sign an agreement that states that.
2. If you do your own research and find a home you want, tell that to the Realtor.
3. You pay for a service. You can buy your own home through a competent real estate lawyer. What about your title insurance? What about your earnest money? Anyone can negotiate themselves, but a buyers agent works for the buyer. It is that simple. They more than likely don't even know the other realtor or thier broker.
4. You want to spend 300,000 on something and not be sure it is legally yours, doesn't have defects, not sure a new Interstate is being built less than 100 years from your property line, HOA fees are 200 a month, a new park is being put in the vacant land right behind your house and you will be charge a special tax because a bike path is along your property line, etc...

There are jerks out there, plenty of them. There are good ones out there as well. If you are financing your home, the FHA is more than likely going to purchase it from whoever lends you the money, if that is the case you need a certified home inspection.

Everything is negotiable people. The internet is a great source but has limitations. Read an article yesterday where brokers are not allowing zillow, trulia, yahoo, etc... to list all the properties. Why? Because the brokers pay for this and don't get any of the action. You see a FSBO on zillow? The feeds come to the MLS from the brokers who own the service.

I could go on and on, but if you contact a Sales Agent and tell them you found a property listed for XX dollars that you want to buy, they would be fools not to discount thier slice of the commission. If they won't, find another one. You did all the work, don't give up what is rightfully yours. But if I spend 300K on a house, I want to know for sure that there are no surprises.

AGCMRET says

Interesting discussion. I would like to add a few things as we purchased late last summer.

* * * * *

1. You are under no obligation to pay X% commission unless you sign an agreement that states that.

* * * * *

Everything is negotiable people.

* * * * *

I could go on and on, but if you contact a Sales Agent and tell them you found a property listed for XX dollars that you want to buy, they would be fools not to discount thier slice of the commission.

And what was the commission % you payed on your purchase?

Did you use a buyers agent?

LASVEGASWINNER says

An experience realtor with lots of closings can make that inspection turn into a winning situation for the investor when he finds the right things wrong and negotiates with the seller to have the seller pay for it.
Just because you find it wrong doesn't mean the seller will be willing to pay for it. That's when that 3% buyer's agent commission becomes the best investment you ever made.

Winning situation, eh?

OK, correct me if I am wrong here, but lets say hypothetically that Bull Dog "The Negotiator" buyers agent, or "BD" for short, closes on 24 properties a year, with the average price being $100k.

That brings BD's yearly take home to $72k.

Now of course BD is providing a wonderful value for the $3k per house, but lets say that he can break free from his chain and crank his negotiating skills to 11. In doing so he manages to get concessions for his valued clients and dicker the average price down to $95K per/house. Also, he spends a little more time with his clients and encourages them to refuse deals that might not be "right" for them. Spending this extra time reduces the sales he can close each year from 24 to 22.

With the increased effort and integrity BD's new take home is $62,700/year.

So, providing more value, and working harder in a clients best interests costs BD $9,300 a year, not an insignificant portion of his income.

Hmmmm.... I wonder what a buyers agent would really do in this situation.... hmmmm...

more confusion sowing by agents here.

Letting the listing/selling agent double dip DOES NOT mean no inspection, no escrow, no contingency clauses to get out. It means 1 or 2 agents get the whole commish vs 3 or 4 agents getting the commish (depends if they are idiots they will only be salesmen, if they are of merely average IQ they will be a broker and have no one to split it with and keep the whole commish)

when dealing with agents ask this FIRST:
Do you have a SALERPERSON or BROKER license (verify this at dre.ca.gov by typing in thier name)

YES most of my mistakes were using a buyers agent.

I got outbid was mostly what happened.

One deal was a NICE HOUSE and I told my useless buyers agent that I would beat the other offer by 10k up to maybe a bit more than that.

The listing agent came back with this gem"sorry we arent taking anymore offers, the owners really want the home to go to these other people for a lower price because they have a kid in the local high school".

What is more likely? The listing agent double dippled and flushed my offer OR the seller is Mother Theresa?
School of hard knocks hurts!

Slightly off topic but I went out to dinner last night with an old friend of mine - actually an ex-GF.

She is engaged to a realtor who works in the south bay.

We had never spoken too much about his profession as I try not to be nosy and she is a somewhat private person.

However, I could not resist speaking of my recent adventures in real estate and commented on how getting dual-agent, double commission deal lined up seems to be the popular way to get a property these days.

She agreed and proceeded to tell me her finance has been very busy closing sales as a listing realtor. She went on to tell me that he will give top priority to a dual-agent deal and not even present other offers to the seller even if they are higher.

The way she said it was so nonchalant I thought that maybe she misunderstood me (my friend is very sweet and even a bit naive).

I pressed her on it to see if she actually understood what she was saying and she did.

I know, this is nothing new, but I was a bit shocked to hear my friend so casually admit that her fiance is committing fraud on a regular basis.

Amazing.

"Again you make this sound like brain surgery when it is well within the ability of a 10-year old."

Then why are there 100's of real estate seminars costing 1000's of dollars being conducted in Los Angeles this week end. I guess the "10 year olds"
need their diaper changed.

LASVEGASWINNER says

Then why are there 100's of real estate seminars costing 1000's of dollars being conducted in Los Angeles this week end. I guess the "10 year olds"
need their diaper changed.

“The fundamental principle of human action, the law, that is to political economy what the law of gravitation is to physics is that men seek to gratify their desires with the least exertion ” - Henry George.

Real estate agents are the living, breathing example of the above concept stated by a great man.

Malkovich says

Slightly off topic but I went out to dinner last night with an old friend of mine - actually an ex-GF.

Actually, that sounded right on topic for a thread entitled "Greedy whore dual agents - what are the cons anyway?"

how long until this annoying agent gives up posting on patrick.net?!

I give him about 2 more weeks.

He isnt even making a small effort at being honest - he comes on here with maximum bs! We all know about the 'get rich quick' idiot fleecing seminar game. This dope even mentioned donald trump - huge red flag that HE IS ONE of the idiots paying 3k to watch a guy talk for an hour.

LASVEGASWINNER says

Then why are there 100's of real estate seminars costing 1000's of dollars being conducted in Los Angeles this week end.

How many of those seminars explain that buyer's agents have a strong financial incentive to work against their clients best interest?

A friend of mine got a buyers agent and didn't get an offer accepted after looking/offering for a year, then paid way too much. (I think it was $539k for a 2 bed townhouse/condo in the foggy/windy part of Pacifica in 2009). I found a house in about 2 weeks and got my initial offer accepted by going directly to the listing agent. I paid more than 100k LESS than he did and got a single family house with an in-law and views of the mountains from the living room, 3 full bathrooms and a decent size yard ect ect. He is pissed. I would say as pathetic as it is, if you want to buy a house, this is how you have to do it now days. The listing agent holds the keys and he will use that leverage to get HIM the most money out of any deal.