patrick.net

"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.

woggs1 says

The listing agent holds the keys and he will use that leverage to get HIM the most money out of any deal.

You're making waaaay too much sense for LASVEGASWINNER. Clearly, this is going to fly above his head.

leoj707 says

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

None. That's because these 'buyer agent' seminars are all most definitely deluded. Some of the agents that I have interacted actually believe they are acting in their client's best interest even though reality says that they won't . They won't admit it, because if they did -- there's no need for them in the first place.

PockyClipsNow says

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.

LOL very true. Trump is the poster boy representation of the root cause of many problems in America: non-productive rent seeking.

Just get a real estate license yourself. Its easy enough to do. Then YOU can earn both sides of the commission.

Stop whining and do something about it, geezzzzzzz.

Honest Abe says

Just get a real estate license yourself. Its easy enough to do. Then YOU can earn both sides of the commission.

Stop whining and do something about it, geezzzzzzz.

Really? OK. So, I can just get my license and then find houses to sell and sell them to myself? Brilliant!

Do tell, good sir, how I can make this happen?

The worst abuses of dual agency i have seen are when the loan owner is out of state. The listing agents literally control everything since the owner isnt even there to observe lack of a sign/mls listing/ or foot traffic to the home. whatasweetdeal for an agent.

This is the only reason agents go into property management. when those people sell they normally get the listing and can double dip the pocket listing. $weet!

All the news stories now talke about banks doing WAY MORE short sales due to forecloure backlog/legal issues. So we can expect way way more dual agent BS pocket listing for the next 5 years as short sales are prime target for this (loan owner gets zero proceeds from sale, proably only can get illegal kickback from buyer/agent).
Someway somehow the feds have managed to put MORE fraud in the housing market (vastly increased short sales are gonna make a fraud tsunami)

How to stop this? LET THE BANK HOLDING FIRST MORTGAGE PICK THE LISTING AGENT. but that cant happen since the under water loan owner picks the crook to list the home since the bank 'doesnt own the home' whatamess.

Malkovich, why not Google: Get your real estate online. After you finish the course, you can then take a state test, and if you pass - wallah - you are now in the position to be a greedy, dual agent whore all on your own!!

Honest Abe says

Malkovich, why not Google: Get your real estate online. After you finish the course, you can then take a state test, and if you pass - wallah - you are now in the position to be a greedy, dual agent whore all on your own!!

Is that so? I think I am missing something here... how do I represent the seller of a house I want to buy? Sounds tricky... forgive my noob question. Also, the business I currently run requires a significant amount of my time. How exactly, do you propose I find the exact property I want to buy and then somehow magically get to be the listing realt-whore? And, profit?

Or are you really just bothered by the fact that I and most others on this forum are calling it the way it is and your (completely fucking nonsensical) reply is "get your real estate license?"

First you list the property for sale. If you think its worth buying, you would present the seller with a purchase agreement offering to purchase the property, disclosing that you are licensed, and that you are purchasing it with the expectation of making a profit. There may be other appropriate disclosures to make.

You can also paint your house yourself and save the money...or, pay someone to do it for you. Kinda like being a realtor - or not. If you want to be the realtor you save the money, if you don't want to be the realtor you save the money too. There is no fee to the buyer AND you'd get paid if you were the listing agent - SWEET!

One quick question for novice buyer like me. Is there anything except contract where you might need help from buyer's agent ? I mean during escrow or loan process ? What is hud 1 ?

EBGuy says

You don't need an agent, but you should familiarize yourself with practices in that region. That way, if you decide to flaunt the customs, you can do so without looking silly or insulting anyone (unintentionally). In my area, three things I can think of that may not apply in other municipalities are local transfer tax, sewer lateral inspection, and RECO. Not a huge deal (well, a 1.5% local transfer tax is a non-trivial amount), but you had better be prepared if you don't want any surprises.

A couple years ago I sold a house on Craigslist and it was the first time I ever sold real estate. The title company knew all about the local customs and whatnot and the buyers loan agent helped him out with all the purchase stuff. Any questions I had were answered with a quick phone call. The sale went through without any big pitfalls. It really was not that complicated and I would do it again in a heartbeat. If you use a standard purchase offer everything is spelled out on who pays what and any contingencies. I don't see a reason for a buyers or sellers agent. Because most properties are available through a sellers agent you pretty much have to play the game. Hopefully someday real estate agents are phased out.

Urgent ---

Can the seller's agent represent more than one buyer ?
I really liked one house and I want to buy it. I am trying
to use seller's agent to buy the house but it seems that
few other buyers approached him. He didn't mention it
but he is trying to show he is all ethical (bullshit). He is also
not offering any cash back. HE wants to keep all 6 percent.
Bast****. ALSO not willing to negotiate the price. I am just
wondering if he is just trying to represent more than one
buyer and trying to squeeze the money.

Ah, the Nigerians. I once misspent a whole day at work laughing while reading this site:

http://www.419eater.com/html/hall_of_shame.htm

No, I take it back. That was one of the best spent days of my entire life.

APOCALYPSEFUCK is Tony Manero says

Here's the way it works.

Buyer's agent called seller's agent.

BA: Hey, what you got?

SA: Typical asshole. Think they're owed 10x the bubble price because they got in before Christmas 2006.

BA: The wife blow you?

SA: Twice. Then the husband shows up with a jar of Vaseline. I called the cops. Wife's kinda nuts. Lotta teeth.

BA: I know.

Please no stupid comments. I need serious advice.

APOCALYPSEFUCK is Tony Manero says

BA: Hey, what you got?

SA: Typical asshole. Think they're owed 10x the bubble price because they got in before Christmas 2006.

BA: The wife blow you?

SA: Twice. Then the husband shows up with a jar of Vaseline. I called the cops. Wife's kinda nuts. Lotta teeth.

Nice. Fucking comedy gold! Tony, are you familiar with the Redfin forums? They really, really need your commentary. Way too sleepy over there.

If you can carve out any time in your busy schedule, please pop on over there and make a few comments. :)

APOCALYPSEFUCK is Tony Manero says

Posted a couple of items. Seems really earnest over there.

Do Realtors® run the show at Redfin Forums?

Not sure. Not much action on those forums so the only time I head over there is after absorbing every word of Patnet, Reddit, SFgate, and my work emails many times over. Things definitely need to be shaken up in that yawnfest.

leo9 says

He is also
not offering any cash back. HE wants to keep all 6 percent.

Remember he has to give a portion of what he makes to the broker too. Also are you sure he's the listing agent? Often times, the listing agent company sends another agent -- who will be a buyer agent representing you in the transaction :). you may not want a buyer agent, but still you may get one.

leo9 says

ALSO not willing to negotiate the price. I am just
wondering if he is just trying to represent more than one
buyer and trying to squeeze the money.

I think he's playing hard ball because more than likely -- he does have other legit buyers who are also interested.

APOCALYPSEFUCK is Tony Manero says

Do Realtors® run the show at Redfin Forums?

Redfin runs the Redfin forums. And they are are real estate brokerage.

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.

PROFEESIONAL BUYERS AGENT - INVESTOR - SALES ASSOCIATE - PROPERTY MANAGER 35 years experience

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.

Then there is also this:
http://www.salon.com/2011/04/18/donald_trump_net_worth/