Real Estate Agent vs For Sale By Owner question
Laurie A Vandiford
unfortunately the decor in this house was so bad it was a turn off from
the start. as we we were leaving the neighborhood, we spotted a For Sale
By Owner house that was beautiful. he immediately started into "oh you
won't like that house..." we ended up going in and fell in love with it.
he is trying to deter our interest (saying it's over our $$$ etc)
obviously because he is not selling the house for them.
he told us to think it over and if we felt we could afford it that he
would draw up a contract for that house.
my question is, what disadvantage, if any is there in keeping the agent
involved? we don't just want to exclude him, he's been a great help, but
most of all because he LIVES in that neighborhood. in addition, it is
our first time at this, so we feel he could be helpful during the
process. i'm very well aware that he is in it for the money.
we have already talked to the owners of the house and know what the
asking price is. if we get our agent involved, will they raise the price
of the house, or negotiate less in order to pay his fee.
one other note, since the owners live in the neighborhood, they know our
agent very well. they agreed to turn the house over to him if they were
unable to sell it.
any comments on this dilemma would be appreciated.
--
*******************************************************************************
Laurie Vandiford University Of North Carolina Institute For
l...@unity.ncsu.edu Transportation Research & Education
Raleigh, NC USA
Doug Rudoff
In article <lav.75...@news.ncsu.edu> you write:
>my question is, what disadvantage, if any is there in keeping the agent
>involved? we don't just want to exclude him, he's been a great help, but
>most of all because he LIVES in that neighborhood. in addition, it is
>our first time at this, so we feel he could be helpful during the
>process. i'm very well aware that he is in it for the money.
I'm sure the agent has been helpful and friendly to you, but the
reason he does that is that it his job to make you like him. I've been
involved with real estate transactions enough times to know that
agents' friendly demeanor is mostly an act (why did he not want you to
look at the house? Because it wasn't in his financial interest).
You have a house you like, using an agent will only raise the cost of
the deal. Forget the agent, he realizes that part of the job is losing
clients to FSBOs. If you want, buy the agent some sort of gift, but
a multi-thousand dollar commision for a house _you_ found (and he
tried to steer you away from) is silly.
I'd get an attorney to take you through everything, though.
--
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Doug Rudoff Motorola, Seattle rud...@mdd.comm.mot.com
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Scott Finley
l...@sparc03.cc.ncsu.edu (Laurie A Vandiford) writes:
> as we we were leaving the neighborhood, we spotted a For Sale
> By Owner house that was beautiful. he immediately started into "oh you
> won't like that house..." we ended up going in and fell in love with it.
>
> he is trying to deter our interest (saying it's over our $$$ etc)
> obviously because he is not selling the house for them.
> he told us to think it over and if we felt we could afford it that he
> would draw up a contract for that house.
>
> my question is, what disadvantage, if any is there in keeping the agent
> involved?
Ask him if he expects a commission. If he does, the disadvantage ($$)
is quite clear. He told you you wouldn't like the house. He did not
do this because he cared about your interests, in all liklihood. He
probably did it because successful FSBO's are bad for his business. I
had a buyer's broker for my last purchase, but even that broker
wouldn't show me FSBO's. As a result, I won't use them again.
Realtors can be helpful (and occasionally harmful) between accepted
offer and closing, but they earn their $$ finding you the house that
suits you. This agent did not do that, and tried to stop you from
doing it yourself. Do get an attorney to help with the contract, I
suggest.
--Scott Finley Scott_...@smtpgateway.cc.nih.gov
Lisa White
way too. On both ends there were agents discouraging me, first the way
you're being discouraged and when selling by assuring me that I would never
sell it by myself. My advice is to dump the agent and get an attorney. Ask
around with people who bought houses recently to get recommendations for
settlement attorneys, and then call them to ask for fees to review offers
to buy and contracts. I found an attorney I was happy with who reviewed
the contract when I bought the house for $250 (though that was 7 years ago).
A flat rate is better than hourly, particularly if your contract is straight-
forward.
I wouldn't trust that agent. My bet is that the first opportunity s/he has to
throw a wrench into the transaction, s/he will. If you want that house, best
deal with the owners directly.
Good luck,
-- Lisa W.
James Cook
Laurie A Vandiford spaketh thusly unto the world:
: he is trying to deter our interest (saying it's over our $$$ etc)
: obviously because he is not selling the house for them.
: he told us to think it over and if we felt we could afford it that he
: would draw up a contract for that house.
Generally speaking, if you buy a house listed with your agent's company,
the agent receives a higher than usual split of the total commission of
6% to 7%. In addition, his company makes the entire commission rather
than splitting it 50/50 as in the case where you buy a house listed with
one company but "sold" by an agent of a different company.
There is a substantial financial incentive for the broker to show you
only the properties they have listed and to earn both sides of the
commission. They may wonder whether, even if you concede to pay a
commission on a FSBO deal, whether you'll be savvy enough to negotiate
for them to only get the 3% or so which they'd normally get in a case
where they don't have a listing on the house you buy. He may expect that
you'll propose to him that you'll agree to one have of the normal 6% or
so gross commission since he's only "handling the buyer's side" of the deal.
If this was his motivation, he has violated an important fiduciary duty
to you, and the professional ethics.
: my question is, what disadvantage, if any is there in keeping the agent
: involved? we don't just want to exclude him, he's been a great help, but
: most of all because he LIVES in that neighborhood.
A fair proposal would be for you to negotiate a new compensation with the
agent if you want to. He did not help you find that house. He may help
you with the lesser task of the paperwork, and some minor negotiation
with the seller. If you still trust him enough to negotiate for you, try:
Sign a written agreement with him to be your exclusive "buyer's agent."
Then this agreement spells out his duties to handle the closing and
escrow, if those are used there. For this he should receive a fee of :
$1,500 flat fee (or whatever seems fair to you for his hours involved in
that process), or
either 2% or 3% total, as these pay him for the reduced function in the
deal of negotiating and processing a "found" deal other than the listed ones.
The same services could be handled by a real estate attorney for a fee,
and you could extend other courtesies to the agent over future years as
your good neighbor other than hiring him for this.
Good luck.
James Cook
--
______________________________________________________________________________
James Cook Internet: jc...@netcom.com
San Francisco Bay, Calififornia Compuserve: 76520,2727
James Cook
Laurie A Vandiford spaketh thusly unto the world:
: the start. as we we were leaving the neighborhood, we spotted a For Sale
: By Owner house that was beautiful. he immediately started into "oh you
: won't like that house..." we ended up going in and fell in love with it.
: my question is, what disadvantage, if any is there in keeping the agent
: involved? we don't just want to exclude him, he's been a great help, but
: most of all because he LIVES in that neighborhood. in addition, it is
: our first time at this, so we feel he could be helpful during the
: process. i'm very well aware that he is in it for the money.
Another suggestion:
In whatever contract you sign with the agent, whether they act as your
buyer's agent, as the seller's agent, or both (bad news), consider
including in that contract a statement that the code of ethics of the
national and state Realtor associations are a part of that contract, and
that violation of them is a violation of the contract.
Most people don't realize that although such codes of ethics exist, when
the Realtor violates them you cannot generally use the violation of their
ethics code, if needed, in court. It was not part of the contract, and
usually has little or no legal effect. You can change this with your handy
little pen, just write it in. :)
You could ask an attorney for the best wording, but something I'd use
myself would read:
"The Broker/Agent shall perform this agreement and represent Client in
full accord with the Code of Ethics of the National Association of
Realtors, the North Carolina Association of Realtors, and with such
similar codes of ethics of other professional associations of which
Broker/Agent is a member. Said codes of ethics are hereby incorporated in
this agreement by reference."
You should be in a better position to decide how much of a fee is payable
to the Realtor later if you perceive additional unethical conduct. If
such occurs, consult with your attorney and make him aware that this
provision is in your agreement. Better not to work with an agent who has
already exhibited unethical conduct. But whichever agent you sign with,
consider something like this as part of your "safety net."
What Realtor can explain with a straight face any good reason for not
wanting to live up to the ethics standards of his own professional
association?
Ed Green - Pixel Cruncher
>>
>All true. I bought my last house directly from the owner and sold it that
>way too. On both ends there were agents discouraging me, first the way
>you're being discouraged and when selling by assuring me that I would never
>sell it by myself.
If you were selling it yourself, how did you ever *have* an agent to
discourage you?
On the buying end, my experience was completely different. I was using
a RE agent extensively to look at listed houses. When I announced my
interest in a FSBO, he didn't say a word about it. I didn't ask him for
advice or any professional services related to *that* transaction.
When I told him we had signed a contract on it, he wished us well,
offered his services in the future, and asked to send him a customer if
we ever had the opportunity.
Quite professional, I thought. And he was smart, I will (send him a
customer).
---
Ed Green Ed.G...@East.Sun.COM DoD #0111 (919)460-8302
Pete Holsberg
>In article <lav.75...@news.ncsu.edu> you write:
>I'm sure the agent has been helpful and friendly to you, but the
>reason he does that is that it his job to make you like him. I've been
>involved with real estate transactions enough times to know that
>agents' friendly demeanor is mostly an act
Here we go again. What do you do for a living?
>You have a house you like, using an agent will only raise the cost of
>the deal. Forget the agent, he realizes that part of the job is losing
>clients to FSBOs. If you want, buy the agent some sort of gift, but
>a multi-thousand dollar commision for a house _you_ found (and he
>tried to steer you away from) is silly.
>I'd get an attorney to take you through everything, though.
I agree with that.
Pete Holsberg
>Realtors can be helpful (and occasionally harmful) between accepted
>offer and closing, but they earn their $$ finding you the house that
>suits you.
Not true, in my wife's experience as a realtor. She finds that most of her
work occurs after the contracts have been signed.
Case in point: her son (my stepson) found a house he loved and wanted to buy
(actually, she suggested it to him). The owners took to the young man and
wanted to sell him the house (there were other parties bidding). The contracts
were signed and then negotiations began. The deal almost went up in smoke
because there was a $425 inspection fee that each wanted the other to pay for.
This is on a $185,000 house! $425 was going to kill the deal. That's when my
wife went to work, helping each party see that the seller wanted to sell and
the buyer wanted to buy, and that $425 was too small a sum to cause the deal
to fall through. I forget the details of how paid, but the deal *is* going
through.
Finding a house is something that almost anyone with enough time and
legwork can do. That more people don't do it is because they don't want to
invest the time and energy.
Pete Holsberg
>Generally speaking, if you buy a house listed with your agent's company,
>the agent receives a higher than usual split of the total commission of
>6% to 7%. In addition, his company makes the entire commission rather
>than splitting it 50/50 as in the case where you buy a house listed with
>one company but "sold" by an agent of a different company.
>There is a substantial financial incentive for the broker to show you
>only the properties they have listed and to earn both sides of the
>commission.
However, unless a broker has the lion's share of the local market, it would be
folly for him to tell his agents "Show my houses first." They could easily
lose the sale to someone who used the full inventory of homes in the MLS.
>If this was his motivation, he has violated an important fiduciary duty
>to you, and the professional ethics.
Did she say that she had signed a buyer's agency agreement? If not, the agent
had no fiducuary responsibility to her. Professional ethics were violated if
he lied to her.
Pete Holsberg
>In whatever contract you sign with the agent, whether they act as your
>buyer's agent, as the seller's agent, or both (bad news), consider
>including in that contract a statement that the code of ethics of the
>national and state Realtor associations are a part of that contract, and
>that violation of them is a violation of the contract.
Good idea.
>What Realtor can explain with a straight face any good reason for not
>wanting to live up to the ethics standards of his own professional
>association?
What Realtor would want to?
James Cook
: On the buying end, my experience was completely different. I was using
: a RE agent extensively to look at listed houses. When I announced my
: interest in a FSBO, he didn't say a word about it. I didn't ask him for
: advice or any professional services related to *that* transaction.
: When I told him we had signed a contract on it, he wished us well,
: offered his services in the future, and asked to send him a customer if
: we ever had the opportunity.
: Quite professional, I thought. And he was smart, I will (send him a
: customer).
That's a good story - good Realtor.
One idea for those who aren't comfortable handling the purchase on their
own, yet don't want to see 6% added to the cost of the FSBO, would be:
1. Real estate attorney
2. Negotiate a lower fee for the lesser amount of work by the agent.
Maybe in the order of $1000 +/- for escrow/paperwork, or perhaps 1% or 2%
vs. 6%.
Sign a "buyer's agency" agreement with the Realtor to secure his
exclusive representation to you as buyer.
--
______________________________________________________________________________
James Cook Internet: jc...@netcom.com
San Francisco Bay, California Compuserve: 76520,2727
Leonard A. Visconti
data point....
If your house is in the low to moderately price range (something that would
classify your house as a 'starter' home) and in a fairly populated area
(both of these issues are flexible and vary according to location, and is
a general guideline), I would be more inclined to try selling it myself. Put
it in the local paper and get an answering machine that allows you to check
your messages remotely.
I think most people like to move close to the area in which they were raised.
Because your home is a 'starter' many of the buyers will be in the 'living at
home with their parents, renting a house, planing to be married' category.
The more populated the area, the higher the number of this group looking to
move will be.
You will ultimately be contacted by a number of real estate agents looking to
list your house. Invite them over and tell them you might be interested (and
you might) in listing with them and you can probably get a copy of comparable
listings in your area, which will give you a better idea of your home's value.
If you decide on listing your home you will have had a chance to meet and
'feel out' a number of agents. I see the motivation to actively seek new
business as an indicator of the agent's desire to succeed. Overall you always
have a better negotiating advantage (negotiating sales commission, for example)
when someone seeks you than when you seek them.
I recommend an agent when selling an expensive house, especially if it is in a
more remote area. The number of people seeking these homes is less and a agent
(and their MLS) gives you the coverage you need. Maybe this will change as
alternatives to the MLS gain in poularity.
In generally, you have little to lose in trying to sell your home without a real
estate agent. Approach it as if it were a temporary part-time job. Because that
is what it is. Have a real estate lawyer construct the sales contract; they
typically charge around 1% of the sales price.
-------------------------------------------------------------------------------
| Leonard A. Visconti Picker International |
| Network Analyst 595 Miner Road |
| visc...@picker.com Highland Heights, Ohio 44143 |
| (216)473-4801 |
-------------------------------------------------------------------------------
Steve Pope
> I wouldn't trust that agent. My bet is that the first
> opportunity s/he has to throw a wrench into the transaction, s
> /he will. If you want that house, best deal with the owners
> directly.
Absolutely correct. There is no reason whatsoever to include a
realty agent in a fsob transaction -- even if the seller
is doing it on an "Agents Welcome" basis, and offer direct
from the buyer is even more welcome!
If you are in a state with closing procedures, you should
probably have a lawyer draw up the offer and participate in
the closing; if instead your state has escrow procedures
(as in California), write up the offer yourself if you
consider yourself knowledgable, and present it to the
seller along with your earnest money check made out to
a title/escrow company.
I would also distrust an agent who discouraged you from looking
at fsob's in a bald attempt to not lose a commisssion.
That's tacky.
Steve
Ron Rothenberg
PJ>Did she say that she had signed a buyer's agency agreement? If not, the agen
PJ>had no fiducuary responsibility to her. Professional ethics were violated if
PJ>he lied to her.
Professional ethics AND the laws of most states were violated. Check
your states real estate agency and Consumer Protection Laws for more
details.
-rsr-
* SLMR 2.1a * HOLY SH*T, BATMAN! I mean....
Ron Rothenberg
JC>buyer's agent, as the seller's agent, or both (bad news), consider
JC>including in that contract a statement that the code of ethics of the
JC>national and state Realtor associations are a part of that contract, and
JC>that violation of them is a violation of the contract.
I'm not quite sure of your point here, but violations of the code of
ethics can be brought to mediation with the local Association of
REALTORS (presuming the broker or agent is a REALTOR(R)).
In the two boards that I have belonged to, ethics complaints from the
public were taken VERY, VERY seriously, mediated fairly, and penalties
were given -- usually suspension from the board for a time -- suspension
from the board also means suspension from MLS privileges, so it really
carries some weight in terms of ability to do business.
Most ethics complaints can be successfully mediated and handled by the
local boards and associations, and don't have to be taken to court,
saving you that expense. I don't believe there is ever a winner (save,
perhaps, the lawyers) when these disputes go to court.
* SLMR 2.1a * Eschew Obfuscation
Ron Rothenberg
>Realtors can be helpful (and occasionally harmful) between accepted
>offer and closing, but they earn their $$ finding you the house that
>suits you.
Not necessarily -- agents can provide market information, advice, market
savvy, knowledge of real estate laws, knowledge of inventory, great
advice in selecting banks, lawyers, inspectors, etc. A good agent can
provide advocacy in getting a mortgage, and bringing a purchase contract
to the closing table smoothly. Once this even included restraining the
buyer and the seller so there would not be a murder included in the
transaction.
The business of finding a house is quite easy, for the most part. A lot
of the other stuff, including the limitless number of details and
problems that arise along the way, are where the real work and effort of
r.e. brokerage goes.
-rsr-
Ron Rothenberg
Broker/Owner/REALTOR(R)
HomeBase Real Estate
Belmont, MA 02178
(617) 489-4812
Greater Boston's Most Accessible Brokerage.
* SLMR 2.1a * How could I be out of money? I still have checks.
Ron Rothenberg
PJ>reason he does that is that it his job to make you like him. I've been
PJ>involved with real estate transactions enough times to know that
PJ>agents' friendly demeanor is mostly an act
Oy Vay is Mir. More "put all agents in the same basket" and bash them
all. I thought we got over this a few months ago.
PJ>You have a house you like, using an agent will only raise the cost of
PJ>the deal. Forget the agent, he realizes that part of the job is losing
PJ>clients to FSBOs. If you want, buy the agent some sort of gift, but
PJ>a multi-thousand dollar commision for a house _you_ found (and he
PJ>tried to steer you away from) is silly.
Not necessarily. If you find an agent who is costing you more on a
house, get a new agent.
PJ>>I'd get an attorney to take you through everything, though.
Truer words were never typed.
-rsr-
* SLMR 2.1a * More like Woody Woodpecker with a perm!
Ron Rothenberg
PJ>>Generally speaking, if you buy a house listed with your agent's company,
PJ>>the agent receives a higher than usual split of the total commission of
PJ>>6% to 7%. In addition, his company makes the entire commission rather
PJ>>than splitting it 50/50 as in the case where you buy a house listed with
PJ>>one company but "sold" by an agent of a different company.
PJ>>There is a substantial financial incentive for the broker to show you
PJ>>only the properties they have listed and to earn both sides of the
PJ>>commission.
Can we dispose of this myth once and for all! R.E. agents are
successful in business because they make their clients and customers
happy, so that their clients and customers send their friends and
acquaintances to the agent whenever they mention real estate.
The thought pattern you described is very shortsighted and reasonably
rare. It does occur occassionally, but not in the minds of
people who are successful (long term) in real estate.
It is the listing agents job to sell the house as quickly and
smoothly as possible, at a fair price. Agents who don't cooperate well
end up losing the cooperation of other
agents. This gives them a competetive disadvantage, because their
future listings won't sell so well. Although it's nice to occassionally
get a full commission, anyone who connives to do so is doing a
disservice to his clients, his future clients, his self and costing
himself future referral business.
-rsr-
Ron Rothenberg
Broker/Owner/REALTOR(R)
HomeBase Real Estate
Belmont, MA 02178
(617) 489-4812
Greater Boston's Most Accessible Brokerage.
* SLMR 2.1a * 15› of every stamp is for storage
James Cook
: PJ>Did she say that she had signed a buyer's agency agreement? If not, the agen
: PJ>had no fiducuary responsibility to her. Professional ethics were violated if
: PJ>he lied to her.
: Professional ethics AND the laws of most states were violated. Check
: your states real estate agency and Consumer Protection Laws for more
: details.
The fiduciary duties of real estate agents do not depend on the existence
of any written agreement, generally. Fiduciary duties generally arise at
the point where a client has imposed some material degree of trust and
confidence in the advice and or service of an agent (or attorney, etc.).
This is important to appreciate, yet subtle.
If you have spent some time interacting with your broker professionally,
perhaps visiting some properties or whatever, and based upon the
confidence you've acquired in him sign a contract or take some action,
this special group of duties, fiduciary duties, come into play. Among
them is the duty of absolute fidelity and full disclosure to clients.
Nothing can be left unsaid that may materially be a factor in the
client's decisions. If you wind up receiving information or advice that
is materially incomplete or biased, if full disclosure does not occur,
even the buyer's agency agreement you entered into may be voidable. This
could be because of this breach of fiduciary duty, which is at law often
a form of "constructive fraud." Contracts procured by means of fraud are
generally not binding, and are voidable. So the point here is that
valuable rights exist for clients in addition to and apart from any
contract. Whether these contracts are even binding on a client depends
very much on their advisor's conduct.
An agent's lie to a client can potentially be a violation of:
1. National code of ethics
2. State and local code of ethics
3. State law governing realtors, such as a business and professions code
4. A contract with an agent
5. A fiduciary duty or other equitable doctrine of law
Actually using and proving a violation under ONE of the above may be much
different than doing so under a different one. The process and relief
available can vary between them. So, knowing all of them is important to
protecting your interests as a client.
James Cook
: JC>In whatever contract you sign with the agent, whether they act as your
: JC>buyer's agent, as the seller's agent, or both (bad news), consider
: JC>including in that contract a statement that the code of ethics of the
: JC>national and state Realtor associations are a part of that contract, and
: JC>that violation of them is a violation of the contract.
: I'm not quite sure of your point here, but violations of the code of
: ethics can be brought to mediation with the local Association of
: REALTORS (presuming the broker or agent is a REALTOR(R)).
My point is that when client and brokers get into a disagreement,
legally, the client's attorney starts examining all of the duties owed to
the client to see which, if any, were violated. Any one who is familiar
with actual cases in this area knows that attorneys are often hamstrung
when helping clients here somewhat because some duties which the average
person would expect of their broker are not actually legal duties. An
example is the professional codes of ethics. The courts view the code of
ethics, generally, as rules which Realtors voluntarily live by, but which
cannot be enforced as a legal duty to clients. If clients want to be able
to hold Realtors to the ethics codes in a legal sense, in court, a good
way would be to include the codes as part of their contract with Realtors
via a short statement to that effect. This will help strenghten the hand
of the client's attorney if ever one is needed.
A mediated solution with a local Real Estate Board can't do everything
for a client that a court can. They offer very limited solutions. A lot
of money could be at stake. The wise client should at least give
themselves the future OPTION of going to court well prepared - just as a
wise OPTION.
The disciplinary committees can cancel a broker's license but has very
limited authority at law to solve some of the client's own problems that
result from a mishandled relationship.
Most Realtors and real estate transactions are good experiences. I'm only
talking about the smaller number of, yet fairly common, unsatisfactory ones.
: In the two boards that I have belonged to, ethics complaints from the
: public were taken VERY, VERY seriously, mediated fairly, and penalties
: were given -- usually suspension from the board for a time -- suspension
: from the board also means suspension from MLS privileges, so it really
: carries some weight in terms of ability to do business.
I agree. Some states DO treat ethics complaints seriously. But what does
that do for a client? A broker may lose his license, and it happens
often, as do suspensions. But how does this help a client? Usually, a
violation of the professional ethics codes are punished solely by an act
against the broker. What about the client's lost money, lost profit, lost
opportunity, unsatisfactory contracts they're stuck with. These problems
may require a solution in court. If so, making the obedience of the
ethics codes a deliberate part of the client/broker contract can make
life easier for the aggrieved client - if problems develop.
[See comments on ethics codes below]
: Most ethics complaints can be successfully mediated and handled by the
: local boards and associations, and don't have to be taken to court,
: saving you that expense. I don't believe there is ever a winner (save,
: perhaps, the lawyers) when these disputes go to court.
Yes. That course of action can help with discipline of the broker, and
sometimes limited problems of the client. MAny times clients need to go
to court. The wise person plans for contingencies - gives themselves good
options and room to maneuver in rough seas.
------------------------------------------------------
Realtors are those brokers and agents who belong to the national and
state associations. There are codes of ethics they are supposed to abide
by, and the national and state versions are a little different. Below is
a sample from the CALIFORNIA code of ethics. Note that these codes of
ethics are not usually regarded as legally binding on the Realtor (toward
the client) unless - you're sharp, and write them into your commission
agreement with that agent.
Samples from the Code of Ethics
and Professional Conduct (California)
--------------------------------------------------------------
The licensee shall not engage the following acts and omissions:
-----
2. Representing to an owner of real property when seeking a listing that
the licensee has obtained a bona fide written offer to purchase the
property, unless at the time of the representation the licensee has
possession of a bona fide written offer to purchase.
3. Stating or implying to an owner of real property during listing
negotiations that the licensee is precluded by law, by regulation, or by
the rules of any organization, other than the broker firm seeking the
listing, from charging less than the commission or fee quoted to the
owner by the licensee.
7. Knowingly making a false or misleading representation to a seller of
real property, who has agreed to finance all or part of a purchase price
by carrying back a loan, about a buyer's ability to repay the loan in
accordance with its terms and conditions.
10. Knowingly making a false or misleading representation or representing
without a reasonable basis for believing its truth, the nature and/or
condition of the interior or exterior features of a property when
soliciting an offer.
13. When acting in the capacity of an agent in a transaction for the
sale, lease or exchange of real property, failing to disclose to a
prospective purchaser or lessee facts known to the licensee materially
affecting the value or desirability of the property, when the licensee
has reason to believe that such facts are not known to nor readily
observable by a prospective purchaser or lessee.
16. Failing to explain to the parties or prospective parties to a real
estate transaction for whom the licensee is acting as an agent the
meaning and probable significance of a contingency in an offer or
contract that the licensee knows or reasonably believes may affect the
closing date of the transaction, or the timing of the vacating of the
property by the seller or its occupancy by the buyer.
-----
One method of specificly making the codes of ethics a legal duty of your
agent to you as client is to include a paragraph in your compensation
agreement that says so.
You could ask an attorney for the best wording, but something I'd use
myself would read:
"The Broker/Agent shall perform this agreement and represent Client in
full accord with the Code of Ethics of the National Association of
Realtors, the California Association of Realtors, and with such other
codes of ethics of other professional associations of which Broker/Agent
is a member. Said codes of ethics are hereby incorporated in this
agreement by reference."
You should be in a better position to re-negotiate how much of a fee is
payable to the Realtor later, if any, if you perceive unethical conduct.
If such occurs, consult with your attorney and make him aware that this
provision is in your agreement.
What Realtor can explain with a straight face any good reason for not
wanting to live up to the ethics standards of his own professional
association by including this duty in his fee agreement?
James Cook
--
______________________________________________________________________________
James Cook Internet: jc...@netcom.com
San Francisco Bay, California Compuserve: 76520,2727
James Cook
: PJ>reason he does that is that it his job to make you like him. I've been
: PJ>involved with real estate transactions enough times to know that
: PJ>agents' friendly demeanor is mostly an act
: Oy Vay is Mir. More "put all agents in the same basket" and bash them
: all. I thought we got over this a few months ago.
I certainly agree that agents are not all alike. Most are quite hard
working and honest and professional. The problem is that once in awhile
events go awry do to negligence, unexpected financial pressure or
incentive on the Broker, or other factors which lead to sour experiences.
The wise client should prepare for the one in ten chance, or whatever it
may be, that they won't in fact have a satisfactory experience. For an
example of how an actual such sour experience developed between a woman
and her friend/broker, read the court case summary below . . . . .
_________________________________
How much do clients know, and how much they should know, in order
to recognise problems as they develop?
Is there something that clients can do, when hiring and having a
Realtor's services, to be in a better position if problems do happen to
develop?
_________________________________
Jorgensen v. Beach 'N' Bay Realty, Inc, (California).
A woman named Meta Jorgensen wanted to sell a second home located
a short distance from the home she shared with her husband. Mrs.
Jorgensen listed her second home for sale with a friend of hers
who was new to the real estate business, Robert Lossing. As this
was Lossing's first listing, he teamed up with William Lavis, a
more experienced agent. Both of them worked for Beach 'N' Bay.
The property was listed for sale at $214,500.
While employed by Jorgensen to sell her property, Lavis and
Lossing met the Albins, a wealthy Mexican family looking for
southern California real estate investments. The agents, Lavis
and Lossing, showed the Albins a number of commercial and
residential investment properties in which the Albins showed
little interest. The agents then showed the Albins the Jorgensen
property, and prepared their offer to buy the Jorgensen property
for $200,000.
The Albin's purchase offer was presented to Jorgensen on the same
day, and at that time the agents told Jorgensen that they were
also representing the Albins in this transaction. They further
told Jorgensen that the Albins were "nice" and would make "good
neighbors." Jorgensen told them she wanted another $5,000 but
Lavis and Lossing discouraged her from presenting a counteroffer
of $205,000, telling her they were meeting with the Albins that
evening and, since the Albins were leaving town, her seeking
additional money would risk losing the deal.
Jorgensen relied on their advice, and counteroffered, leaving the
price at $200,000, but shortenting the escrow period. The Albins
promptly accepted the counteroffer.
Only nine days later, even before escrow closed, Lavis went to
Mexico, and obtained an exclusive listing agreement to resell the
Jorgensen property - for the Albins. At this point in time, the
property was still owned by Jorgensen, who was waiting for title
to transfer at the close of escrow. This second listing agreement
was apparently prepared by Lavis before going to Mexico with a
proposed sale price of $234,500, $34,000 more than they'd
convinced Jorgensen to sell for only nine days earlier.
When Lavis returned from Mexico, the escrow period was shortened,
at the Albin's request. Immediately after the closing of the
escrow, the agents sold the property again, this time on behalf
of the Albins as new owners - at a sale price of $227,000.
When Jorgensen's husband heard the property had been resold he
asked Lossing for the resale price. Lossing stated he could not
tell him because it was a complicated transaction and there were
some exchanges involved. In truth, it was simply an all cash
transaction.
During and after this time the agents handled other real estate
transactions for the Albins. The agents not only made two
commissions in short order from the double sales of the Jorgensen
property, they also made commissions on other projects from the
Albins in the same period.
Jorgensen sued Lossing, Lavis, and Beach 'N' Bay for fraud,
misrepresentation, breach of fiduciary duty and negligence.
[End of reference]
One lesson: Sometimes a financial incentive for brokers to bend ethics
occurs without the knowledge of the client. Even a broker who's never had
legal problems before can get into a problem somewhat unexpectedly which
snowballs to the disadvantage of a client. Quite often, the client won't
recognise this until it's too late. Advance planning is always wisest.
James Cook
: PJ>>Generally speaking, if you buy a house listed with your agent's company,
: PJ>>the agent receives a higher than usual split of the total commission of
: PJ>>6% to 7%. In addition, his company makes the entire commission rather
: PJ>>than splitting it 50/50 as in the case where you buy a house listed with
: PJ>>one company but "sold" by an agent of a different company.
: PJ>>There is a substantial financial incentive for the broker to show you
: PJ>>only the properties they have listed and to earn both sides of the
: PJ>>commission.
: Can we dispose of this myth once and for all! R.E. agents are
: successful in business because they make their clients and customers
: happy, so that their clients and customers send their friends and
: acquaintances to the agent whenever they mention real estate.
: The thought pattern you described is very shortsighted and reasonably
: rare. It does occur occassionally, but not in the minds of
: people who are successful (long term) in real estate.
I agree with you that the thinking pattern is short sighted and that
brokers generally strive to preserve a long term clientele. But my point
was that an incentive does exist even though it is counter-balanced by
other incentives too (like long term client development). The relevance
of that incentive to bend rules is not that it is always done, but that
the incentive is always tugging on a broker's sleeve, and once in awhile
it has its way. If the chances are one in ten or one in thirty that a
client will be dissatisfied with a broker, then planning for that
contingency is just prudent. Lacking a crystal ball, plan ahead for
possible problems with prudence - that's my point.
Even thought it is true that brokers with many years of success, it is
equally true that many long term brokers are successfuly sued in court
for breaches of fiduciary duty, misrepresentation, and professional
negligence. That fact justifies cautious thinking in my book. It does not
have to mean that all brokers are intrinsicly or always a problem. It
means more that good brokers and bad brokers can blow it.
If a broker treats 20 clients well and blows it with the 21st client,
that client who suffered will care about how he was treated ini the
exceptional case, not that all other clients were treated well. So each
client must consider how they want to be positioned to help themselves
legally if they become that 21st client.
: agents. This gives them a competetive disadvantage, because their
: future listings won't sell so well. Although it's nice to occassionally
: get a full commission, anyone who connives to do so is doing a
: disservice to his clients, his future clients, his self and costing
: himself future referral business.
True. But it happens.
Ed Green - Pixel Cruncher
>JC>In whatever contract you sign... consider
>JC>including in that contract a statement that the code of ethics of the
>JC>national and state Realtor associations are a part of that contract, and
>JC>that violation of them is a violation of the contract.
>
>local boards and associations, and don't have to be taken to court,
>saving you that expense. I don't believe there is ever a winner (save,
>perhaps, the lawyers) when these disputes go to court.
Probably true, but that's no reason not to include the clause in a
contract. The idea of a good contract should be to *avoid* going to
court. If there is in fact a question regarding a violation of ethics,
having the clause in the contract simply strengthens your negotiating
position to settle before going to court.
Ed Green - Pixel Cruncher
>PJ>>only the properties they have listed and to earn both sides of the
>PJ>>commission.
>
>Can we dispose of this myth once and for all! R.E. agents are
>successful in business because they make their clients and customers
>happy, so that their clients and customers send their friends and
>acquaintances to the agent whenever they mention real estate.
Can we dispose of this sorry excuse once and for all!
The FACT of the matter is just as PJ has described it. Another FACT is
that the moral, legal, and ethical responsibility of a traditional RE
agent acting with a buyer is to extract the highest possible price from
him, on behalf of the seller (a FACT of which 2/3 of the American
buying public is unaware).
Yet as sure as the sun will rise tomorrow, as soon as anybody brings up
any of the questionable practices and financial incentives of the RE
business, some RE agent or agent's spouse will jump up and explain it
away because "all an agent really wants is satisfied customers, and
referral business."
Nobody is disputing the fact that longevity in a professional business
is secured through referrals from satisfied customers. This is true of
doctors, architects, psychics, accountants, and resturant managers as
well. You don't see hordes of those folks on the net defending their
professional practices in the name of referral business, though.
Julian V. Noble
As a homeowner who is married to a licensed broker, I can address both
sides of this issue. We have sold homes with and without REALTORs, although
we generally bought listed properties.
The advantage to selling it yourself is not having to pay a commission.
The disadvantages are
a) paying for advertising (minor)
b) having to be available to show the property (major!)
c) having to meet the buyer and listen to his (her) sneers about
YOUR property (extremely irritating).
For most working people, it is hard enough to keep the property clean, neat
and showable, without having to be available to show at short notice.
The advantage of buying direct is that you might get it cheaper (i.e., less
the commission). The disadvantages are
a) the seller probably feels HE has earned that commission and
won't discount it;
b) you have no one to tell you about the neighborhood, schools,
future resale prospects, possible flaws in the property;
c) you have to deal directly with the seller.
Why is it not a good idea for buyer and seller to meet? Basically, the sale
or purchase of an item that represents such a large sum (to most people)
is extremely stressful. An intermediary can be more objective than either
of the principals, and can soothe wounded feelings when things get tense.
War stories: one seller who listed with my wife insisted on being present
whenever buyers came to look. Barring locking him up, my wife could not
prevent this. Unfortunately there was no tactful way to explain that the
seller's personality defects were making the house nigh impossible to sell.
He just plain got on the potential buyers' nerves. This seller was also a
know-it-all who turned down a fair offer (that my wife advised him to accept)
and later had to accept about $10K less, after the house had stagnated a
while on the market.
A second war story: a buyer called the seller directly during the negoti-
ations (again, no way to prevent this if both live in the same town) and
made so many demands about repairing a window frame (they had already
agreed on price and were negotiating settlement dates) that the seller
got fed up and told the buyer to peddle his papers. (The seller later
sold the house for a better price to someone else, so the buyer had simply
screwed himself.)
One of the things realtors learn is that both buyers and sellers have
hidden agendas that can mess up deals in baroque ways. Sellers who seem
to want to sell don't really want to leave their home; buyers who say
they want to buy may be terrified of the responsibilities of owning a
home.
Conclusion: although there are some very sleazy realtors in the business,
most are honest, reasonably competent and work hard for their commissions
in all sorts of ways that may not be apparent to the casual observer. The
size of the commission is predicated by the economics of the business and
not by conspiratorial price-fixing. In most regions of the country the
competition is fierce and keeps the price reasonable.
--jvn
--
Julian V. Noble
j...@virginia.edu
Arnold Goldberg
[much good info deleted]
Julian> The advantage to selling it yourself is not having to pay a commission.
Julian> The disadvantages are
thanks for a very lucid and objective dissertation, it's probably one of the
best I've seen in a while on here.
--
------------------------------------------------------------------------
Arnold Goldberg Email: a...@ccd.harris.com
Phone: (407)242-5051 Snail: Harris Controls
Fax : (407)242-4268 407 John Rodes Blvd.
Melbourne, FL 32905
The opinions expressed are my own and do not in any way represent Harris
------------------------------------------------------------------------
Ron Rothenberg
EG>>successful in business because they make their clients and customers
EG>>happy, so that their clients and customers send their friends and
EG>>acquaintances to the agent whenever they mention real estate.
EG>Can we dispose of this sorry excuse once and for all!
EG>The FACT of the matter is just as PJ has described it. Another FACT is
EG>that the moral, legal, and ethical responsibility of a traditional RE
EG>agent acting with a buyer is to extract the highest possible price from
EG>him, on behalf of the seller (a FACT of which 2/3 of the American
EG>buying public is unaware).
Ed, we're talking about two different things here. I'm talking
about gaining both sides of commission (by not acting in your client
sellers' best interest) and you're talking about netting the maximum for
the client sellers. In this case, they're unrelated. If an agent fails
to cooperate with other agents who have qualified buyers, he is doing a
disservice to his sellers. If a broker doesn't show buyers the best
possible matches for their needs, he is doing himself and his sellers' a
disservice.
Yes, you're right that it is usually (presuming this is very important
to his client -- time may be more important) the traditional agents' job
to get the maximum reasonable (the bank still has to appraise) price for
a house. This is usually the price that only one person, who matches
the house very well, will pay.
By not cooperating, the selling agent keeps potential bidders away from
the auction, and pleases no one.
-rsr-
EG>Yet as sure as the sun will rise tomorrow, as soon as anybody brings up
EG>any of the questionable practices and financial incentives of the RE
EG>business, some RE agent or agent's spouse will jump up and explain it
EG>away because "all an agent really wants is satisfied customers, and
EG>referral business."
EG>Nobody is disputing the fact that longevity in a professional business
EG>is secured through referrals from satisfied customers. This is true of
EG>doctors, architects, psychics, accountants, and resturant managers as
EG>well. You don't see hordes of those folks on the net defending their
EG>professional practices in the name of referral business, though.
EG>---
EG>Ed Green Ed.G...@East.Sun.COM DoD #0111 (919)460-8302
* SLMR 2.1a * Stop tagline theft! Copyright your tagline (c)
Jim Sullivan
|>
|> As a homeowner who is married to a licensed broker, I can address both
|> sides of this issue. We have sold homes with and without REALTORs, although
|> we generally bought listed properties.
|>
|> The advantage to selling it yourself is not having to pay a commission.
|> The disadvantages are
|>
|> a) paying for advertising (minor)
Quite true and quite minor.
|> b) having to be available to show the property (major!)
An inconvience certainly. But not a major problem for many people.
|> c) having to meet the buyer and listen to his (her) sneers about
|> YOUR property (extremely irritating).
Depends on your personality. :^)
|>
|> For most working people, it is hard enough to keep the property clean, neat
|> and showable, without having to be available to show at short notice.
You've just meantioned the really hard part of selling a house... the
need to keep it looking clean and neat. Showing the house for a few hours
each week should be about 1/4 the time put into keeping it clean. If you
are not home to show the house during the day, you can advertise a phone
number to make appointments to see the house. This also helps screen out the
neighbors who just want a peek at your house. :^}
And don't think that packing up for a Sunday afternoon away from home
is not stressful. I've missed many a football game while an agent sat
in my house waiting for buyers to arrive. Try packing up a few kids,
your dog (not good to have the dog around while showing the house), and
plan to spend four hours *somewhere* and see whether it is stressful or
not.
|>
|> The advantage of buying direct is that you might get it cheaper (i.e., less
|> the commission). The disadvantages are
|>
|> a) the seller probably feels HE has earned that commission and
|> won't discount it;
So? Is the *buyer* at a disadvantage in this case? Why should the
buyer get a discount for not having a selling agent?
|> b) you have no one to tell you about the neighborhood, schools,
|> future resale prospects, possible flaws in the property;
The sellers agent will tell me these things? The sellers agent will
actually tell me things which might discourage me from buying the
house? Bahahahahahahaha. All these things I would check out on
my own before I looked at the house or with an inspector.
|> c) you have to deal directly with the seller.
You deal with the seller in any case. The agent acts as a broker
and must check with the seller to make any changes in the contract.
What might takes days with an agent could be handled in a few hours
by dealing directly.
The real advantage to selling/buying without a broker is that you most
likely would be using a real estate attorney. Next time I buy/sell a
house I plan to hire one. Agents, IMHO, are not qualified to
read/write contracts for anyone. And if they are, then almost
anyone could do it as well. Most house sales are simple and so
are the contracts. The contracts are standard and require
little modification. A house which requires major modifications to the
contract should have an attorney involved anyway.
|>
|> Why is it not a good idea for buyer and seller to meet? Basically, the sale
|> or purchase of an item that represents such a large sum (to most people)
|> is extremely stressful. An intermediary can be more objective than either
|> of the principals, and can soothe wounded feelings when things get tense.
|> War stories: one seller who listed with my wife insisted on being present
|> whenever buyers came to look. Barring locking him up, my wife could not
|> prevent this. Unfortunately there was no tactful way to explain that the
|> seller's personality defects were making the house nigh impossible to sell.
|> He just plain got on the potential buyers' nerves. This seller was also a
|> know-it-all who turned down a fair offer (that my wife advised him to accept)
|> and later had to accept about $10K less, after the house had stagnated a
|> while on the market.
That's one story. I know another. A friend was selling his house through
an agent. The agent told him of a buyer who had been back four times to
look at the property but had "buyers jitters". My friend met with the
buyer and they both went over the house, my friend answering questions
and alleviating the fears the buyer had. The buyer bought the house. No
one, including an agent, knows your house better than you do. An agent
is not a salesman, they are a broker. I agree that a broker in some cases,
as the one you meantion above, can be a good thing to have. But not in
all cases. And a seller can sell his own home without a broker. The analogy
of a person selling his own car comes to mind. Some people would rather
not put up with the hassle of selling the car themselves. For them, there
is the option of trading the car in. But many people sell cars on their
own.
|>
|> A second war story: a buyer called the seller directly during the negoti-
|> ations (again, no way to prevent this if both live in the same town) and
|> made so many demands about repairing a window frame (they had already
|> agreed on price and were negotiating settlement dates) that the seller
|> got fed up and told the buyer to peddle his papers. (The seller later
|> sold the house for a better price to someone else, so the buyer had simply
|> screwed himself.)
I agree these things happen. But here's a counter story; I was in the
market for a house. Our buying agent was quite good. But, I found
a house on my own. Another agent was selling that house. It was
perfect. Not wanting to cut out our agent I asked her to write up a contract.
She called me the next day and said that she had talked with the
selling agent and that there was someone else already interested.
I asked if that meant that a contract had been placed. She said no.
I "ordered" her to write the contract. The contract was written three
days later due to our agent having gone "out of town". When she
returned she told me that a contract had been signed. The house sold
for $3K less than we were prepared to offer. Both the sellers and
us lost out in this deal due to our agent's slowness and the seller's
agent who, for a reason I'm still not certain of, was not interested
in us placing a contract. In this case the agents simply had gotten
in the way. Had I approached the sellers from the beginning I'm certain
that I'd be living there now.
One theory I have is that the seller's agent had an interested buyer
who would use the selling agent, thus keeping the entire 6% commission
for herself. This is only a theory and if it didn't happen in this case,
I'm sure it has happened in others.
|>
|> One of the things realtors learn is that both buyers and sellers have
|> hidden agendas that can mess up deals in baroque ways. Sellers who seem
|> to want to sell don't really want to leave their home; buyers who say
|> they want to buy may be terrified of the responsibilities of owning a
|> home.
So? People selling cars have the same problems. Are you saying that the
agent actually helps people by guiding them to do things they don't want
to do? I've heard this from some agents I've dealt with in the past. I
don't think it holds much water. Why should an agent be able to
comfort a buyer with jitters better than the home owner, who has successfully
lived in the house they are thinking of buying?
|>
|> Conclusion: although there are some very sleazy realtors in the business,
|> most are honest, reasonably competent and work hard for their commissions
|> in all sorts of ways that may not be apparent to the casual observer. The
|> size of the commission is predicated by the economics of the business and
|> not by conspiratorial price-fixing. In most regions of the country the
|> competition is fierce and keeps the price reasonable.
I agree in general. But you ignore the fact that the commission is
similar to the commission a car salesman gets for selling a car. And
everyone knows what this can do to help make the car salesman honest ;^)
And is this "service" really worth 6% of the value of your house? I've
heard the arguements that it is. Yet house prices in the Washington DC
area doubled during the 1980's yet average salaries did not. But the
commissions stayed the same. During that time I saw agents go from driving
Oldsmobiles to Mercedes. The priecs people were paying to sell their houses
doubled yet the service stayed the same. If there is no "price fixing", then
why didn't the commissions drop to say 5%, thus keeping the salaries and
profits of the agents in line with salaries in other businesses?
All in all I think it comes down to this. When selling a house you
may or may not need an agent. The determining factors might be based
on:
- Your location (deep in the back of a neighborhood versus on a
main street)
- The condition of the house ( a run down house is harder
to sell that a well kept one)
- Your ability/desire to meet with buyers.
- Your understanding of what is involved in selling a house (contracts, etc..)
My feeling is that selling a house on your own can be a pain, but I have
painful memory of selling my last house for $180K, and at settlement
seeing my $90K profit on the sale become $11K less. Our agent
did a lot, but not $11K worth of work. Next time it's FSBO, at least
until I can't take the pain anymore or need a shoulder to cry on. :^}
--
Jim Sullivan
Pete Holsberg
>In article <CII1y...@murdoch.acc.Virginia.EDU>, j...@fermi.clas.Virginia.EDU (Julian V. Noble) writes:
>|>
>|> As a homeowner who is married to a licensed broker, I can address both
>|> sides of this issue. We have sold homes with and without REALTORs, although
>|> we generally bought listed properties.
>|>
>|> The advantage to selling it yourself is not having to pay a commission.
>|> The disadvantages are
>|>
>|> a) paying for advertising (minor)
>Quite true and quite minor.
That depends on whether or not the agent is agressive, uses TV, etc.
>|> b) having to be available to show the property (major!)
>An inconvience certainly. But not a major problem for many people.
But a major problem for most. Picture a one-earner family with kids and mom
getting to do all the dirty work of showing.
Also, a FSBO cannot screen out unqualified "buyers".
>|> b) you have no one to tell you about the neighborhood, schools,
>|> future resale prospects, possible flaws in the property;
>The sellers agent will tell me these things? The sellers agent will
>actually tell me things which might discourage me from buying the
>house? Bahahahahahahaha. All these things I would check out on
>my own before I looked at the house or with an inspector.
Your buyers agent will.
>|> c) you have to deal directly with the seller.
>You deal with the seller in any case. The agent acts as a broker
>and must check with the seller to make any changes in the contract.
>What might takes days with an agent could be handled in a few hours
>by dealing directly.
Not directly.
>That's one story. I know another. A friend was selling his house through
>an agent. The agent told him of a buyer who had been back four times to
>look at the property but had "buyers jitters". My friend met with the
>buyer and they both went over the house, my friend answering questions
>and alleviating the fears the buyer had.
There are a million stories in real estate about how buyers and sellers kept
apart consummated a deal they both wanted but would have trashed had they been
"negotiating" face to face, and maybe 100 about how getting the buyer and
seller together saved a deal the agents couldn't save.
>I agree these things happen. But here's a counter story; I was in the
>market for a house. Our buying agent was quite good. But, I found
>a house on my own. Another agent was selling that house. It was
>perfect. Not wanting to cut out our agent I asked her to write up a contract.
You mean, make a written offer?
>She called me the next day and said that she had talked with the
>selling agent and that there was someone else already interested.
>I asked if that meant that a contract had been placed. She said no.
Oh, oh. Report her to the board of realtors. She is bound to present all
written offers, even if other offers have been made.
>Had I approached the sellers from the beginning I'm certain
>that I'd be living there now.
Or had you chosen your agent better/
>One theory I have is that the seller's agent had an interested buyer
>who would use the selling agent, thus keeping the entire 6% commission
>for herself. This is only a theory and if it didn't happen in this case,
>I'm sure it has happened in others.
She doesn't keep the whole 6% in any case.
>So? People selling cars have the same problems. Are you saying that the
>agent actually helps people by guiding them to do things they don't want
>to do? I've heard this from some agents I've dealt with in the past. I
>don't think it holds much water. Why should an agent be able to
>comfort a buyer with jitters better than the home owner, who has successfully
>lived in the house they are thinking of buying?
Absolutely! The home owner is emotionally attached to his/her house. I recall
when I brought a colleague (a licensed home inspector) -- a meek and mild
professor -- to inspect the house I'm now living in. The owner was pleasant
and friendly, but he came up with a four page list of (all minor) items that
were either not up to snuff or would need attention in a couple of years, and
she went ballistic! Couldn't tolerate the idea that her 25-year-pld house was
less than perfect!
>|> Conclusion: although there are some very sleazy realtors in the business,
>|> most are honest, reasonably competent and work hard for their commissions
>|> in all sorts of ways that may not be apparent to the casual observer. The
>|> size of the commission is predicated by the economics of the business and
>|> not by conspiratorial price-fixing. In most regions of the country the
>|> competition is fierce and keeps the price reasonable.
>I agree in general. But you ignore the fact that the commission is
>similar to the commission a car salesman gets for selling a car. And
>everyone knows what this can do to help make the car salesman honest ;^)
Well, the basic idea is that the seller wants to sell and the buyer wants to
buy, and it is up to the agents to help both parties achieve these goals. In
dealing with cars, remember that they write the contracts, and you have no
inspection rights.
>And is this "service" really worth 6% of the value of your house? I've
>heard the arguements that it is. Yet house prices in the Washington DC
>area doubled during the 1980's yet average salaries did not. But the
>commissions stayed the same. During that time I saw agents go from driving
>Oldsmobiles to Mercedes. The priecs people were paying to sell their houses
>doubled yet the service stayed the same. If there is no "price fixing", then
>why didn't the commissions drop to say 5%, thus keeping the salaries and
>profits of the agents in line with salaries in other businesses?
Average salaries and average commissions are very different. Did your doctor
reduce his prices? How about your lawyer? How about your favorite pro athlete?
When salespeople sell, they earn. Period. Us working stiffs are tied into
profit and loss or tax revenues or the like. Successful salespeople can make
*LOTS* of money. Yet, the average yearly commission for a average real estate
agent is less than $20,000, I'm told.
------------------------------------------------------------------
Pete Holsberg The House On *This* Side Of U.S. 1
44 Lopatcong Drive p...@mccc.edu
Trenton, NJ 08638 p...@pjh.jvnc.net
FAX: 609-586-2318
------------------------------------------------------------------
**** Trenton Computer Festival **** April 16-17, 1994 ****
------------------------------------------------------------------
Pete Holsberg
>painful memory of selling my last house for $180K, and at settlement
>seeing my $90K profit on the sale become $11K less. Our agent
>did a lot, but not $11K worth of work. Next time it's FSBO, at least
>until I can't take the pain anymore or need a shoulder to cry on. :^}
One thing I forgot. My wife, who is a realtor, says that in 70-80% of her
business, her real work starts *after* the contracts have been signed. I
wonder if you know what she means by that?
James Cook
: In article <1993Dec27.1...@alw.nih.gov> sull...@alw.nih.gov (Jim Sullivan) writes:
: >One theory I have is that the seller's agent had an interested buyer
: >who would use the selling agent, thus keeping the entire 6% commission
: >for herself. This is only a theory and if it didn't happen in this case,
: >I'm sure it has happened in others.
: She doesn't keep the whole 6% in any case.
In some cases the agent will keep 6%, as is usually the case with Re/Max
Realtors. Those agents keep 100% of their individual commissions, and if
they happen to act as the listing and selling agent, they thus make 6%.
: Average salaries and average commissions are very different. Did your doctor
: reduce his prices? How about your lawyer? How about your favorite pro athlete?
: When salespeople sell, they earn. Period. Us working stiffs are tied into
: profit and loss or tax revenues or the like. Successful salespeople can make
: *LOTS* of money. Yet, the average yearly commission for a average real estate
: agent is less than $20,000, I'm told.
It is my understanding that the average agent doesn't handle many
transactions in a year, especially if the economy is slow. Given the low
average volume of transactions, the commission rate per transaction is
"high" - 6% to 7% in most states. Some agents are more productive than
others in terms of volume, and this is where the commissions add up to a
high annual income. "Most" agents do not, to my knowledge, have an
extraordinarily high income. Those that do have a high income benefit
from the high commission rate per deal necessitated by the low average
volume of most agents.
James Cook
Pete Holsberg spaketh thusly unto the world:
: >She called me the next day and said that she had talked with the
: >selling agent and that there was someone else already interested.
: >I asked if that meant that a contract had been placed. She said no.
: Oh, oh. Report her to the board of realtors. She is bound to present all
: written offers, even if other offers have been made.
Yes. But, how many people know what the professional duties of Realtors
are to clients, so that they can recognise violations and then effectively
complain to the appropriate place (State regulatory agency, local Board
of Realtors, via lawsuit in court)? Some folks don't even know where to
begin or when a violation has occurred.
Schroeder
>In article <CII1y...@murdoch.acc.Virginia.EDU>, j...@fermi.clas.Virginia.EDU (
>Julian V. Noble) writes:
>|>
Much stuff deleted
>|>
>|> a) paying for advertising (minor)
>
>Quite true and quite minor.
>
>|> b) having to be available to show the property (major!)
>
>An inconvience certainly. But not a major problem for many people.
>
>|> c) having to meet the buyer and listen to his (her) sneers about
>|> YOUR property (extremely irritating).
>
>Depends on your personality. :^)
>
All of these considerations are real, it is trying and a lot of effort to
sell and buy without an agent, but for anyone with average stamina and
resourcefulness _the pay is well worth the effort_.
However in my experience with trying to sell a house without an agent these
considerations also all miss the real issue, that is, 95 percent of buyers
immediately go to an agent and only look there. (: If you don't like the
percent I pulled out of the air, pull your own :) So the FSBO is left with
the 5 percent who are confident enough to approach the job without someone
holding their hand and only one of the five is looking for his type or
price of house.
The last time I sold a house, we could allow about five weeks to try
FSBO. There were about three parties who looked at it, all as I recall
serious and generally in the right market, but it was not quite what
they wanted. Also a veritable parade of real estate salesmen offering
to do us a favor. When we listed with an agent, the house sold in about
three weeks with one or two offers in the wings and after many-many
parties came through who may or may not have been serious ("Now I know
this isn't what you are looking for, but it may serve as a comparison."
is what I've been told as we stopped at a house on the way to the
intended one.)
I suppose you can look at the dual problem from the buyers side.
95 percent of the houses for sale are listed with an agent, so why
spend time and tires chasing all over for the one percent?
Erv
--
Sanjay Keshava
>In article <CII1y...@murdoch.acc.Virginia.EDU>, j...@fermi.clas.Virginia.EDU (Julian V. Noble) writes:
>|>
>|> One of the things realtors learn is that both buyers and sellers have
>|> hidden agendas that can mess up deals in baroque ways. Sellers who seem
>|> to want to sell don't really want to leave their home; buyers who say
>|> they want to buy may be terrified of the responsibilities of owning a
>|> home.
>
>So? People selling cars have the same problems. Are you saying that the
>agent actually helps people by guiding them to do things they don't want
>to do? I've heard this from some agents I've dealt with in the past. I
>don't think it holds much water. Why should an agent be able to
>comfort a buyer with jitters better than the home owner, who has successfully
>lived in the house they are thinking of buying?
I tend to agree with J. Sullivan here. I'm not sure what hidden
agendas J. Noble is referring to. It seems clear that sellers want a
high price and an as-is sale; buyers want a low price and everything
fixed. Emotional concerns are not hidden agendas. We were expecting a
baby around closing time, so I was willing to relax some repair
requirements and even pay a little more for a house that we thought
would suit us for the next 10 years. It's concerns like these that
leave room for negotiations.
My experiences with realtors have been that THEY usually have the
hidden agenda and try to manipulate the parties. We had realtors
trying to convince us that having a swimming pool is an asset when we
explicitly said we don't want one. Another showed a house near her
own, but steered us away from the rickety shack attached to the
garage. She also showed another house near the train tracks and said
we would get used to the train whistle. Still another showed us a
house on what seemed a quiet street on the weekend, but turned out to
be a high traffic shortcut during the weekdays, and she said it was a
little used road. Another impeded my way to the sump pump; when I
finally got there it was full and showed signs of overflowing. Then
there are the falsified MLS listings. We browsed through the MLS book
and noticed that all the listings by one agent had inflated property
value assessments, but the property tax payments were accurate. The
catch is that the MLS listings have a disclaimer to the accuracy of the
information. In dealing with 6 agents over 8 months, we found none
that showed any fairness in pointing out the good and bad points. We
were very relieved to have bought a FSBO because we were in control of
the deal, not some overpaid intermediary.
Also, be aware that real estate attorneys can ruin deals too. It's up
to the parties to stay involved and in control of the negotiations.
---
Sanjay skes...@jpmorgan.com
->|<-
Sanjay Keshava
>One thing I forgot. My wife, who is a realtor, says that in 70-80% of her
>business, her real work starts *after* the contracts have been signed. I
>wonder if you know what she means by that?
>
>------------------------------------------------------------------
>Pete Holsberg The House On *This* Side Of U.S. 1
Just out of curiosity, what does a realtor in NJ do after the contracts
have been signed?
I ask in earnest because in a deal of ours which fell through, the
realtors did nothing more than messenger service for the documents
during the contract negotiations. The attorneys handled or would have
handled the negotiations, preparation of papers, filing of papers,
etc. BTW, the deal failed because the seller's realtor failed to
disclose some significant defects that became apparent after
inspection.
Pete Bellas
Problem around here is the buyer immediately says "FSBO? Then we can offer
6% less than a comparible right?". Perhaps you can bargain to split the
difference but in Cal it's a buyers market right now.
-Pete-
* Pete Bellas "Cogito ergo spud" *
* Citicorp/TTI I think therefore I yam. *
* Santa Monica, CA *
* bel...@gamma.tti.com *
Pete Holsberg
>From: jc...@netcom.com (James Cook)
>Subject: Re: Real Estate Agent vs For Sale By Owner
>Date: Mon, 27 Dec 1993 22:47:16 GMT
>Pete Holsberg spaketh thusly unto the world:
>: In article <1993Dec27.1...@alw.nih.gov> sull...@alw.nih.gov (Jim Sullivan) writes:
>: >One theory I have is that the seller's agent had an interested buyer
>: >who would use the selling agent, thus keeping the entire 6% commission
>: >for herself. This is only a theory and if it didn't happen in this case,
>: >I'm sure it has happened in others.
>: She doesn't keep the whole 6% in any case.
>In some cases the agent will keep 6%, as is usually the case with Re/Max
>Realtors. Those agents keep 100% of their individual commissions, and if
>they happen to act as the listing and selling agent, they thus make 6%.
That's true. Do you know why they don't split the commission with a broker?
It's because they pay for all of their expenses -- rent for the office, office
help, phone, etc., etc. Conventional agents work for a broker who provides all
the support "infrastructure" for half the commission.
>: Average salaries and average commissions are very different. Did your doctor
>: reduce his prices? How about your lawyer? How about your favorite pro athlete?
>: When salespeople sell, they earn. Period. Us working stiffs are tied into
>: profit and loss or tax revenues or the like. Successful salespeople can make
>: *LOTS* of money. Yet, the average yearly commission for a average real estate
>: agent is less than $20,000, I'm told.
>It is my understanding that the average agent doesn't handle many
>transactions in a year, especially if the economy is slow. Given the low
>average volume of transactions, the commission rate per transaction is
>"high" - 6% to 7% in most states.
Is that based on a comparison with commissions in other sales fields? Or is it
your opinion that it is "high"?
>Some agents are more productive than
>others in terms of volume, and this is where the commissions add up to a
>high annual income. "Most" agents do not, to my knowledge, have an
>extraordinarily high income.
?? You're the one who brought up agents in Mercedes and BMW, aren't you? ;-)
What do you do for a living, James?
Pete Holsberg
>From: jc...@netcom.com (James Cook)
>Subject: Re: Real Estate Agent vs For Sale By Owner
>Pete Holsberg spaketh thusly unto the world:
>: >She called me the next day and said that she had talked with the
>: >selling agent and that there was someone else already interested.
>: >I asked if that meant that a contract had been placed. She said no.
>: Oh, oh. Report her to the board of realtors. She is bound to present all
>: written offers, even if other offers have been made.
>Yes. But, how many people know what the professional duties of Realtors
>are to clients, so that they can recognise violations and then effectively
>complain to the appropriate place (State regulatory agency, local Board
>of Realtors, via lawsuit in court)? Some folks don't even know where to
>begin or when a violation has occurred.
Well. we're beginning to educate them, aren't we! Seriously, considering the
number of law suits that we see brought against various and sundry folks, I'm
pretty sure than many people would be ready to sue (or bring a complaint)
based on the feeling that *something* isn't right. I'm also sure that those
folks would look in the phone book for the state board of realtors or a local
ombudsman or something -- maybe even their real estate lawyer!
Pete Holsberg
>My experiences with realtors have been that THEY usually have the
>hidden agenda and try to manipulate the parties. We had realtors
>trying to convince us that having a swimming pool is an asset when we
>explicitly said we don't want one. Another showed a house near her
>own, but steered us away from the rickety shack attached to the
>garage. She also showed another house near the train tracks and said
>we would get used to the train whistle. Still another showed us a
>house on what seemed a quiet street on the weekend, but turned out to
>be a high traffic shortcut during the weekdays, and she said it was a
>little used road. Another impeded my way to the sump pump; when I
>finally got there it was full and showed signs of overflowing.
I take it that you were a buyer and you did not have buyers agency agreements
with any of the aforementioned realtors? Did you realize that those folks work
for the seller, not for you? It seems to me that they were trying to present
those properties in the best possible light -- for the benefit of the sellers!
Now, if you had had a buyers agent, ...
>Then
>there are the falsified MLS listings. We browsed through the MLS book
>and noticed that all the listings by one agent had inflated property
>value assessments, but the property tax payments were accurate. The
>catch is that the MLS listings have a disclaimer to the accuracy of the
>information.
That's disgusting, but it really doesn't matter if you're getting a
substantial mortgage, as the lender will want an up-to-date appraisal before
approving the loan.
>In dealing with 6 agents over 8 months, we found none
>that showed any fairness in pointing out the good and bad points. We
>were very relieved to have bought a FSBO because we were in control of
>the deal, not some overpaid intermediary.
An agent who works for the seller is not about to point out the "bad points"
of the seller's property. How you you feel if you were the seller and the
selling agents were pointing out the flaws in your house?
>Also, be aware that real estate attorneys can ruin deals too. It's up
>to the parties to stay involved and in control of the negotiations.
True. Control? Shoot -- the parties make the decisions!!
Pete Holsberg
>From: skes...@jpmorgan.com (Sanjay Keshava)
>Subject: Re: Real Estate Agent vs For Sale By Owner
>In article 006F...@pjh.jvnc.net, p...@pjh.jvnc.net (Pete Holsberg) writes:
>>One thing I forgot. My wife, who is a realtor, says that in 70-80% of her
>>business, her real work starts *after* the contracts have been signed. I
>>wonder if you know what she means by that?
>>
>>------------------------------------------------------------------
>>Pete Holsberg The House On *This* Side Of U.S. 1
>Just out of curiosity, what does a realtor in NJ do after the contracts
>have been signed?
I'm not going to answer that because I want to know if the person who I wrote
that to knows. And it's not just NJ.
>I ask in earnest because in a deal of ours which fell through, the
>realtors did nothing more than messenger service for the documents
>during the contract negotiations. The attorneys handled or would have
>handled the negotiations, preparation of papers, filing of papers,
>etc. BTW, the deal failed because the seller's realtor failed to
>disclose some significant defects that became apparent after
>inspection.
I guess you don't have "full disclosure" where you are? In any case, you never
got past the point where the contracts were signed.
Ron Rothenberg
JC>: >selling agent and that there was someone else already interested.
JC>: >I asked if that meant that a contract had been placed. She said no.
JC>: Oh, oh. Report her to the board of realtors. She is bound to present all
JC>: written offers, even if other offers have been made.
This is a license law problem, too. If this is being done, it should
also be reported to your state's Real Estate Licensing/Board of
Registration.
JC>Yes. But, how many people know what the professional duties of Realtors
JC>are to clients, so that they can recognise violations and then effectively
JC>complain to the appropriate place (State regulatory agency, local Board
JC>of Realtors, via lawsuit in court)? Some folks don't even know where to
JC>begin or when a violation has occurred.
all my customers and clients seem to know this one about presenting an
offer forthwith, and use it to threaten me on particularly cold nights,
and on my days off. Any good book on real estate will contain this
point. Is it asking too much if in the name of consumerism people will
read one good book on buying a home before making their biggest
purchase?
"Our best customer is a well-informed customer." - Sy Sims.
* SLMR 2.1a * And I thought *I* had problems!
Ron Rothenberg
PJ>Average salaries and average commissions are very different. Did your doctor
PJ>reduce his prices? How about your lawyer? How about your favorite pro athlet
PJ>When salespeople sell, they earn. Period. Us working stiffs are tied into
PJ>profit and loss or tax revenues or the like. Successful salespeople can make
PJ>*LOTS* of money. Yet, the average yearly commission for a average real estat
PJ>agent is less than $20,000, I'm told.
Pete, this point is sort of irrelevant. you wouldn't go to your boss
and ask for a raise because you 'needed' more money. You'd ask for more
because you were worth more.
There's no shortage of brokers and agents around, and brokers are free
to set their prices at whatever the market will bear. They can cut
their commissions and compete on price, or they can compete on service
and performance.
At any rate, the rate is a market rate, based on supply and demand and
what people will pay. Set the rate too high, and people will try to
sell their own homes. Set it too low, and you may not be able to pay
your own bills.
No one is FORCED to hire a real estate agent, yet people keep hiring
them and paying the going rate in an area. Why? If people didn't need
agents, they wouldn't hire them, and then it wouldn't matter if the
commission rate was 0% or 20%.
-rsr-
* SLMR 2.1a * Miracle owes its origin to the negation of thought.
Ron Rothenberg
It is minor in some areas, but major in others (try pricing the Boston
Globe, for instance.) For the rare times we advertise a house, each ad
runs $150-$200 for an 11-line ad over a weekend.
In many areas, newspaper advertising is not very effective. Brokers and
agents have a large share of the market and can expose and market your
house better than a simple newspaper ad. Newspaper ads get calls from
novice buyers, at the beginning of their home search.
Nationally, only 2%-3% of all homes sold are sold directly through
newspaper ads.
SU>|> b) having to be available to show the property (major!)
SU>An inconvience certainly. But not a major problem for many people.
What's your time worth?
SU>|> c) having to meet the buyer and listen to his (her) sneers about
SU>|> YOUR property (extremely irritating).
SU>Depends on your personality. :^)
It is wise to send your ego somewhere else when selling your house.
SU>|>
SU>|> For most working people, it is hard enough to keep the property clean, ne
SU>|> and showable, without having to be available to show at short notice.
Make sure it's clean (like a model home), free of offensive smells (yes,
they do matter -- I used to not think so, but I've learned better) and,
most important, PRICED CORRECTLY FOR YOUR MARKET.
SU>|>
SU>|> The advantage of buying direct is that you might get it cheaper (i.e., le
SU>|> the commission). The disadvantages are
SU>|>
SU>|> a) the seller probably feels HE has earned that commission and
SU>|> won't discount it;
You bet. Most real estate sells for about what it's worth -- all
sellers compete with each other, all buyers compete with each other. If
a property is well-exposed and well-marketed, it will sell in the high
end of its range -- 6%-8% higher than a poorly-marketed, poorly exposed
property.
If a seller is able to get the excitement, market exposure and
availablity for viewing by themselves, there is probably no reason that
they can't sell a regular property themselves, or with some advice from
a real estate broker.
The problem is -- very few of the FSBOs I see pay attention to these
important details you mentioned. Most do a horrible job of exposing
their properties, and most end up listed with brokers. There are some
sellers who do a terrific job. I always ask them to come work for me.
So far, one has.
SU>So? Is the *buyer* at a disadvantage in this case? Why should the
SU>buyer get a discount for not having a selling agent?
SU>|> b) you have no one to tell you about the neighborhood, schools,
SU>|> future resale prospects, possible flaws in the property;
Special mortgage programs -- good home inspectors, lawyers, etc. Good
banks and mortgage originators -- the laws in your state regarding
conveyance, toxic substances, air pollutants within the home, etc.
SU>The sellers agent will tell me these things? The sellers agent will
SU>actually tell me things which might discourage me from buying the
SU>house? Bahahahahahahaha. All these things I would check out on
SU>my own before I looked at the house or with an inspector.
A good sellers agent willl tell you anything that materially effects the
value of the property.
SU>|> c) you have to deal directly with the seller.
SU>You deal with the seller in any case. The agent acts as a broker
SU>and must check with the seller to make any changes in the contract.
SU>What might takes days with an agent could be handled in a few hours
SU>by dealing directly.
As an agent who has broken up fistfights (over $400 air conditioners in
$400,000 houses) don't presume that all sellers are so easy to deal
with. About 20% are dreamboats, 60% are average to difficult, and
another 20% are utter nightmares.
SU>The real advantage to selling/buying without a broker is that you most
SU>likely would be using a real estate attorney. Next time I buy/sell a
SU>house I plan to hire one. Agents, IMHO, are not qualified to
SU>read/write contracts for anyone. And if they are, then almost
SU>anyone could do it as well. Most house sales are simple and so
SU>are the contracts. The contracts are standard and require
SU>little modification. A house which requires major modifications to the
SU>contract should have an attorney involved anyway.
SU>|>
Sorry to disagree. The role of the agent and the attorney are very
different. You do need both. The attorney handles the contract and
formalizes the deal that you and the agent make. The agent is in charge
of the market -- to give you perspective on the market, analyze your
competitioin, etc. , most lawyers aren't all that market savvy (I give
courses for the local bar assoc., and some of the lawyers haven't a clue
to the difference between a hot house and a dog -- they just handle the
paperwork.)
Agents definitely aren't qualified to read/write contracts for anyone.
They can fill in blanks and add clauses, but they can not write
contracts, nor should you rely on them to. Very few home sales are
simple.
SU>|> Why is it not a good idea for buyer and seller to meet? Basically, the sa
SU>|> or purchase of an item that represents such a large sum (to most people)
SU>|> is extremely stressful. An intermediary can be more objective than either
SU>|> of the principals, and can soothe wounded feelings when things get tense.
Sometimes it is a good idea for them to meet, sometimes not. If I have
buyers who are likable, I always like to have them meet the seller.
Sellers sell homes to people they like. If my buyers are unlikable or
impolite, I'd just as soon never have them meet. When buyers and
sellers meet, egos become involved, and you tend to get mano-a-mano
faceoffs, ego negotitation, competition, and the type of fistfights
mentioned above. One reason to use an agent is that you don't care to
deal with the other party.
-rsr-
* SLMR 2.1a * I have a firm grip on reality. Now I can strangle it.
Ron Rothenberg
PJ>One thing I forgot. My wife, who is a realtor, says that in 70-80% of her
PJ>business, her real work starts *after* the contracts have been signed. I
PJ>wonder if you know what she means by that?
Only 70% or 80%? You must tell me how she gets away with doing so
little work after the agreement is made. I've always been really good
at matchmaking and making buyers feel comfortable with offers. I think
80% is conservative, paritcularly if there's a mortgage involved.
-rsr-
* SLMR 2.1a * Atheist having an orgasm: "Oh Random, Oh Chance!"
Sanjay Keshava
Well, the house was in Clifton, NJ, and yes, we got past the signing of
the contracts. Our attorney was very aggressive while the seller's was
very passive, so we had many escape clauses in our contract including
full disclosure. But the realtor disclosed what was readily apparent
at the times we saw the house. Fortunately, the inspection was shortly
after a heavy rain, and the basement walls were wet. I mean really
wet. Our contract stipulated that the seller claimed the basement was
dry. The seller also included a clause stating that no claims made by
her would survive the closing. So, if it hadn't rained, we might have
been stuck with a house with a wet basement.
This seems to be a standard clause among NJ real estate attorneys, so
one is essentially buying the house as-is. Enough said, we're getting
off the subject.
Sanjay Keshava
>
>>My experiences with realtors have been that THEY usually have the
>>hidden agenda and try to manipulate the parties. We had realtors
>I take it that you were a buyer and you did not have buyers agency agreements
>with any of the aforementioned realtors? Did you realize that those folks work
>for the seller, not for you? It seems to me that they were trying to present
>those properties in the best possible light -- for the benefit of the sellers!
>Now, if you had had a buyers agent, ...
We were working with one RE/MAX agent who showed us properties listed
by her and by other agents and agencies. There was no formal agreement
between us. We weren't even aware of such a possibility at that time.
>>Then
>>there are the falsified MLS listings. We browsed through the MLS book
>>and noticed that all the listings by one agent had inflated property
>>value assessments, but the property tax payments were accurate. The
>>catch is that the MLS listings have a disclaimer to the accuracy of the
>>information.
>
>That's disgusting, but it really doesn't matter if you're getting a
>substantial mortgage, as the lender will want an up-to-date appraisal before
>approving the loan.
Correct, but the perception of getting a bargain is there. It's bait
for the unwary. Also consider the time and expense of discovering the
deception far into the process. Some people may not know that this
information can be verified by a simple phone call to the township.
>An agent who works for the seller is not about to point out the "bad points"
>of the seller's property. How you you feel if you were the seller and the
>selling agents were pointing out the flaws in your house?
I see your point if the agent was the listing agent. But if the agent
is showing a house not listed by her, then what is the rationale for
not pointing out the flaws? I think it is that the agent simply wants
a sale, any sale. His/her professional reputation is influenced by
whether the buyer gets the house in the condition he thought it was.
So if this is the case, then all agents are really working for the
sellers, unless there's a buyer's agent agreement.
But, I still don't see how a buyer's agent agreement can protect one
from unethical practices. A buyer's agent puts much time into finding
the right house. He/she will benefit from the sale at any price, so
what is the motivation to obtain a better deal for the seller? How
does the buyer know there wasn't some sort of collusion between the
buying and selling agents to manipulate their clients? These backroom
deals are difficult to prove after the fact.
Pete Holsberg
>Subject: Re: Real Estate Agent vs
>Date: Wed, 29 Dec 93 00:10:00 -0500
>PJ>Average salaries and average commissions are very different. Did your doctor
>PJ>reduce his prices? How about your lawyer? How about your favorite pro athlet
>PJ>When salespeople sell, they earn. Period. Us working stiffs are tied into
>PJ>profit and loss or tax revenues or the like. Successful salespeople can make
>PJ>*LOTS* of money. Yet, the average yearly commission for a average real estat
>PJ>agent is less than $20,000, I'm told.
>Pete, this point is sort of irrelevant. you wouldn't go to your boss
>and ask for a raise because you 'needed' more money. You'd ask for more
>because you were worth more.
What would make me worth more, if I were a working stiff on a salary with
nothing in my work that ties into a bottom line?
>There's no shortage of brokers and agents around, and brokers are free
>to set their prices at whatever the market will bear. They can cut
>their commissions and compete on price, or they can compete on service
>and performance.
>At any rate, the rate is a market rate, based on supply and demand and
>what people will pay. Set the rate too high, and people will try to
>sell their own homes. Set it too low, and you may not be able to pay
>your own bills.
>No one is FORCED to hire a real estate agent, yet people keep hiring
>them and paying the going rate in an area. Why? If people didn't need
>agents, they wouldn't hire them, and then it wouldn't matter if the
>commission rate was 0% or 20%.
So true.
Pete Holsberg
>Subject: Re: Real Estate Agent vs
>From: ron.rot...@channel1.com (Ron Rothenberg)
>PJ>One thing I forgot. My wife, who is a realtor, says that in 70-80% of her
>PJ>business, her real work starts *after* the contracts have been signed. I
>PJ>wonder if you know what she means by that?
>Only 70% or 80%? You must tell me how she gets away with doing so
>little work after the agreement is made. I've always been really good
>at matchmaking and making buyers feel comfortable with offers. I think
>80% is conservative, paritcularly if there's a mortgage involved.
I must, eh? It seems to me she does a helluva lot of work after the contract
is signed, and as you pointed out in an earlier post, some of the people she
deals with are gawdawful! For example, she has a listing with a married couple
in the throes of getting a divorce -- for the last 5 years. Hubby has moved
out, gotten himself a girlfriend and 1.5 new kids. Wifey is bound and
determined to block hubby's divorce even if it takes all the money she will
get from the court-ordered sale of the house. Her latest trick? After the
court ordered her to permit placing a lockbox on the door, she went out and
changed the locks!
Pete Holsberg
The seller is obligated to disclose latent defects that they may reasonably
have knowledge of. If he/she doesn't, the realtors have no way of knowing that
there are defects. What would you have had the realtors do?
Did your attorney agree to the "no claims surviving the closing" bit? Even if
the seller had lied about the condition of the house? I believe that's fraud.
------------------------------------------------------------------
Pete Holsberg The House On *This* Side Of U.S. 1
Pete Holsberg
>In article 2D20...@pjh.jvnc.net, p...@pjh.jvnc.net (Pete Holsberg) writes:
>>In article <2fpfhn$k...@archive.ny.jpmorgan.com> skes...@jpmorgan.com (Sanjay Keshava) writes:
>>
>>>My experiences with realtors have been that THEY usually have the
>>>hidden agenda and try to manipulate the parties. We had realtors
>>I take it that you were a buyer and you did not have buyers agency agreements
>>with any of the aforementioned realtors? Did you realize that those folks work
>>for the seller, not for you? It seems to me that they were trying to present
>>those properties in the best possible light -- for the benefit of the sellers!
>>Now, if you had had a buyers agent, ...
>We were working with one RE/MAX agent who showed us properties listed
>by her and by other agents and agencies. There was no formal agreement
>between us. We weren't even aware of such a possibility at that time.
In other words, no.
>>>Then
>>>there are the falsified MLS listings. We browsed through the MLS book
>>>and noticed that all the listings by one agent had inflated property
>>>value assessments, but the property tax payments were accurate. The
>>>catch is that the MLS listings have a disclaimer to the accuracy of the
>>>information.
>>
>>That's disgusting, but it really doesn't matter if you're getting a
>>substantial mortgage, as the lender will want an up-to-date appraisal before
>>approving the loan.
>Correct, but the perception of getting a bargain is there. It's bait
>for the unwary. Also consider the time and expense of discovering the
>deception far into the process. Some people may not know that this
>information can be verified by a simple phone call to the township.
If you're going to spend upwards of $100,000, can you afford to be unwary? See
Ron Rothenberg's thoughtful posting of a day or so ago.
>>An agent who works for the seller is not about to point out the "bad points"
>>of the seller's property. How you you feel if you were the seller and the
>>selling agents were pointing out the flaws in your house?
>I see your point if the agent was the listing agent. But if the agent
>is showing a house not listed by her, then what is the rationale for
>not pointing out the flaws? I think it is that the agent simply wants
>a sale, any sale. His/her professional reputation is influenced by
>whether the buyer gets the house in the condition he thought it was.
>So if this is the case, then all agents are really working for the
>sellers, unless there's a buyer's agent agreement.
That's absolutely correct. Unless you have a buyer's agency agreement with an
agent, both agents are working for the sellers.
>But, I still don't see how a buyer's agent agreement can protect one
>from unethical practices. A buyer's agent puts much time into finding
>the right house. He/she will benefit from the sale at any price, so
>what is the motivation to obtain a better deal for the seller? How
>does the buyer know there wasn't some sort of collusion between the
>buying and selling agents to manipulate their clients? These backroom
>deals are difficult to prove after the fact.
The buyer's agent tries to get a better deal for the buyer, not the seller.
The motivation is that they have agreed to do their best work for the buyer,
rather than the seller. Not every agent can or wants to be a buyers agent.
You must make an effort to search out competent agents with the highest
ethical reputation if you fear collusion. But look at it this way: the seller
wants to sell; there's a buyer who wants to buy; and there are (usually) two
agents who want to see a deal made. So all are working toward the same goal!
No agent will jeopardize a deal for a few bucks of commission. What you may
think of collusion may in fact be the best professional efforts of two agents
helping the buyer and the seller reach their common goal! :-)
Remember that successful agents build careers on referrals. No reasonable
agent will jeopardize his/her future on a single deal.
Jim Sullivan
|> In article <1993Dec27.1...@alw.nih.gov> sull...@alw.nih.gov (Jim Sullivan) writes:
|> >My feeling is that selling a house on your own can be a pain, but I have
|> >painful memory of selling my last house for $180K, and at settlement
|> >seeing my $90K profit on the sale become $11K less. Our agent
|> >did a lot, but not $11K worth of work. Next time it's FSBO, at least
|> >until I can't take the pain anymore or need a shoulder to cry on. :^}
|>
|> One thing I forgot. My wife, who is a realtor, says that in 70-80% of her
|> business, her real work starts *after* the contracts have been signed. I
|> wonder if you know what she means by that?
|>
Of course it does. There's a lot of work that goes on, some of which
I'm not totally aware of, involving the handling of the contract, the
inspection of the house, following the terms of the contract to make
sure both parties meet their deadlines for the inspection, obtaining
mortgages, selling their homes if not sold yet, and I believe
filing the contract with state and local governments is required.
Once a contract is signed there is still a danger that
something will kill the deal. This is when it is nice having a
selling agent working for the sale of your home since now the agents
interests match your own.
In FSBO cases a good real estate lawyer will handle the contract.
The two parties need to keep track of the contract making sure that
things get done on time. The inspection is probably the biggest
area where the deal can be killed. A broken pane of glass might
be worth $5 to one person and $100 to another. In this case it
might be nice to have someone like a realtor to arbitrate the dispute.
Certainly an agent will do work and make your life easier. My point is
that the additional work in FSBO cases is more educational that
laborious. Before I do an FSBO I plan to find and talk to a good
real estate attorney. I then will hire an appraiser to help me
determine the value of my house, which in my case, is difficult
to determine since we live in a historic area and no two houses
are similar. Once I understand what I'll be facing I'll then hold
a few open houses and visits-by-appointment. Once I get a contract
I'll pass it along to the lawyer.
---
Jim Sullivan
Sanjay Keshava
>
>The seller is obligated to disclose latent defects that they may reasonably
>have knowledge of. If he/she doesn't, the realtors have no way of knowing that
>there are defects. What would you have had the realtors do?
As a buyer, I don't care what goes on between the seller and her
agent. If I ask the agent whether the basement walls leak water, I
expect an honest answer. Even an "I don't know" is better than "No, of
course not" out of ignorance. From a buyer's perspective, the agent
should know all there is to know about the house.
>Did your attorney agree to the "no claims surviving the closing" bit? Even if
>the seller had lied about the condition of the house? I believe that's fraud.
Yes, we had no choice other than to look for another house. But he
showed us a dozen other contracts with the same clause, so I think
sellers' attorneys use this as leverage. And in our case, the seller
must not have been desperate enough to omit that clause. Being
defrauded is bad enough, but pursuing the seller after the fact can be
difficult and expensive, especially if he/she has moved out of state.
Which leads to the importance of a well written contract and thorough
inspection.
Jim Sullivan
|> All of these considerations are real, it is trying and a lot of effort to
|> sell and buy without an agent, but for anyone with average stamina and
|> resourcefulness _the pay is well worth the effort_.
|>
|> However in my experience with trying to sell a house without an agent these
|> considerations also all miss the real issue, that is, 95 percent of buyers
|> immediately go to an agent and only look there. (: If you don't like the
|> percent I pulled out of the air, pull your own :) So the FSBO is left with
|> the 5 percent who are confident enough to approach the job without someone
|> holding their hand and only one of the five is looking for his type or
|> price of house.
My experience with family and friends is that they do not immediately go
looking for an agent. They first try to decide what area they want
to live in then scan the Sunday paper for houses in that area. If some
sound good, they go look. You're right that 95% have an agent in the house.
But the buyers rarely have an agent with them when they show up. I'd say
that 10% of buyers have an agent working for them. (out of the air :&)
|>
|> The last time I sold a house, we could allow about five weeks to try
|> FSBO. There were about three parties who looked at it, all as I recall
|> serious and generally in the right market, but it was not quite what
|> they wanted. Also a veritable parade of real estate salesmen offering
|> to do us a favor. When we listed with an agent, the house sold in about
|> three weeks with one or two offers in the wings and after many-many
|> parties came through who may or may not have been serious ("Now I know
|> this isn't what you are looking for, but it may serve as a comparison."
|> is what I've been told as we stopped at a house on the way to the
|> intended one.)
Did you advertise in the papers? Five weeks is not a long time. I think that
three months is the average time to sell a home.
I'm surprised that an FSBO home without
an agent would be ignored by most potential buyers. When I went out on
Sundays looking for a home I ran into a few FSBO and was surprised that
the guy showing the home was the owner. That "Principles Only" notation
in the ad is the usual giveaway. It didn't stop me from seeing the
house nor discourage me from considering it. Am I unusual?
|>
|> I suppose you can look at the dual problem from the buyers side.
|> 95 percent of the houses for sale are listed with an agent, so why
|> spend time and tires chasing all over for the one percent?
It is certainly not to the buyers advantage to *seek* an FSBO home. But it
is not to their disadvantage either. The problem comes when you have a buyers
agent who steers you away from FSBO homes, thus limiting you to the 95%
of homes for sale.
-Jim
Pete Holsberg
>In article 2D22...@pjh.jvnc.net, p...@pjh.jvnc.net (Pete Holsberg) writes:
>>The seller is obligated to disclose latent defects that they may reasonably
>>have knowledge of. If he/she doesn't, the realtors have no way of knowing that
>>there are defects. What would you have had the realtors do?
>As a buyer, I don't care what goes on between the seller and her
>agent. If I ask the agent whether the basement walls leak water, I
>expect an honest answer. Even an "I don't know" is better than "No, of
>course not" out of ignorance. From a buyer's perspective, the agent
>should know all there is to know about the house.
How is the agent to know about the non-apparent items? Did the selling agent
("your" agent) say "No, of course not"?
>>Did your attorney agree to the "no claims surviving the closing" bit? Even if
>>the seller had lied about the condition of the house? I believe that's fraud.
>Yes, we had no choice other than to look for another house. But he
>showed us a dozen other contracts with the same clause, so I think
>sellers' attorneys use this as leverage. And in our case, the seller
>must not have been desperate enough to omit that clause. Being
>defrauded is bad enough, but pursuing the seller after the fact can be
>difficult and expensive, especially if he/she has moved out of state.
>Which leads to the importance of a well written contract and thorough
>inspection.
There are standard contracts that are accepted withour revisions and contracts
that the attorneys completely rewrite. It's all part of the negotiation and,
in NJ, the so-called "attorney review". And a good inspection is absolutely
mandatory.
Sanjay Keshava
>In article <2fs6sn$3...@archive.ny.jpmorgan.com> skes...@jpmorgan.com (Sanjay Keshava) writes:
>
>>Correct, but the perception of getting a bargain is there. It's bait
>>for the unwary. Also consider the time and expense of discovering the
>>deception far into the process. Some people may not know that this
>>information can be verified by a simple phone call to the township.
>
>If you're going to spend upwards of $100,000, can you afford to be unwary? See
>Ron Rothenberg's thoughtful posting of a day or so ago.
Very good article.
However, many home buying lessons are learned from the school of
hard-knocks. As first-time home owners, I think we did okay, except
for the buyer's agent agreement which we didn't know about but was
irrelevant since we found our own FSBO.
>>But, I still don't see how a buyer's agent agreement can protect one
>>from unethical practices. A buyer's agent puts much time into finding
>>the right house. He/she will benefit from the sale at any price, so
>>what is the motivation to obtain a better deal for the seller? How
>>does the buyer know there wasn't some sort of collusion between the
>>buying and selling agents to manipulate their clients? These backroom
>>deals are difficult to prove after the fact.
>
>The buyer's agent tries to get a better deal for the buyer, not the seller.
>The motivation is that they have agreed to do their best work for the buyer,
>rather than the seller. Not every agent can or wants to be a buyers agent.
The buyer's agent still benefits from any sale at any price. The
entire agreement rests on the buyer's agent's integrity. This buyer's
agent agreement sounds like a false sense of security intended to make
the buyer believe the agent has his best interests in mind. Just
because it's formalized and in writing doesn't mean the agent
wholeheartedly abides by it. For example, if after showing 20 houses
over 3 months, wouldn't the agent get a little anxious to either
terminate the agreement or encourage the buyer to relax his requirements
and enter a deal? The buyer himself may think the same, but ignore
that for now. The agent might think her time would be better spent on
more likely-to-buy-quickly clients.
Jim Sullivan
|> SU>The sellers agent will tell me these things? The sellers agent will
|> SU>actually tell me things which might discourage me from buying the
|> SU>house? Bahahahahahahaha. All these things I would check out on
|> SU>my own before I looked at the house or with an inspector.
|>
|> A good sellers agent willl tell you anything that materially effects the
|> value of the property.
My experience tells me that there are enough cases of blatent hiding
of problems, as well as the more easily not meantioned problems, that
I should not expect the selling agent to tell me, the buyer, all of
the important facts. After all, the selling agent works for the
seller. I wouldn't expect the selling agent to tell me that the
neighborhood school is the worst in the area, even if I asked.
|> SU>The real advantage to selling/buying without a broker is that you most
|> SU>likely would be using a real estate attorney. Next time I buy/sell a
|> SU>house I plan to hire one. Agents, IMHO, are not qualified to
|> SU>read/write contracts for anyone. And if they are, then almost
|> SU>anyone could do it as well. Most house sales are simple and so
|> SU>are the contracts. The contracts are standard and require
|> SU>little modification. A house which requires major modifications to the
|> SU>contract should have an attorney involved anyway.
|> SU>|>
|>
|> Sorry to disagree. The role of the agent and the attorney are very
|> different. You do need both. The attorney handles the contract and
|> formalizes the deal that you and the agent make. The agent is in charge
|> of the market -- to give you perspective on the market, analyze your
|> competitioin, etc. , most lawyers aren't all that market savvy (I give
|> courses for the local bar assoc., and some of the lawyers haven't a clue
|> to the difference between a hot house and a dog -- they just handle the
|> paperwork.)
|>
|> Agents definitely aren't qualified to read/write contracts for anyone.
|> They can fill in blanks and add clauses, but they can not write
|> contracts, nor should you rely on them to. Very few home sales are
|> simple.
Well our buyers agent produced a contract for us to
sign, filling in the appropraite blanks. I read it and pointed out that
it left us only 5 days to have the house inspected. She said that this
was normal and acted as though it was not a negotiable point. She also
had an inspector she could recommend and that the inspector could do
the job within 5 days. I had been told not to trust the agent's
inspector so I signed the contract and called one a friend recommended.
He couldn't get to it for about a week. So I used the agent's inspector
who was good, but was obviouly ignoring the severity of problems he found.
I agreed to the terms out of ignorance and my agents advice. I'll never
do this again. Luckily there is no horror story involved here but there
could have been had I let the inspector do the inspection alone. He
would agree, at my insistance, that a problem was more than cosmetic.
The 20 year old boiler that had the pressure reading in the red was one
I refused to let slide.
Had I had a real estate lawyer who worked for me look at the contract
I might have had time to have my inspector look at the house by
modifying the contract to give him time. I feel that in this case the
agent was working for herself and was not looking after my best
interests, though I don't feel she was trying to screw me.
BTW, I highly recommend being there when the inspector inspects the house.
|>
|>
|> SU>|> Why is it not a good idea for buyer and seller to meet? Basically, the sa
|> SU>|> or purchase of an item that represents such a large sum (to most people)
|> SU>|> is extremely stressful. An intermediary can be more objective than either
|> SU>|> of the principals, and can soothe wounded feelings when things get tense.
|>
|> Sometimes it is a good idea for them to meet, sometimes not. If I have
|> buyers who are likable, I always like to have them meet the seller.
|> Sellers sell homes to people they like. If my buyers are unlikable or
|> impolite, I'd just as soon never have them meet. When buyers and
|> sellers meet, egos become involved, and you tend to get mano-a-mano
|> faceoffs, ego negotitation, competition, and the type of fistfights
|> mentioned above. One reason to use an agent is that you don't care to
|> deal with the other party.
I agree that a broker is a great thing to have when two people
sit down to work out any agreement. I wish I had one when I
bought my last car. I almost punched out the salesman who
after insulting my intelligence once too often tried to raise the
price AFTER I signed the contract.
My problem is not with buyers or sellers agents. My problem is that
the system seems to be geared toward *needing* an agent. I don't
have access to the MLS without one and to see the MLS I need to
talk to an agent. I hear that the MLS might open up to non-agents
for a fee. I'm waiting for the day the internet will be so widely
used that it will be the place to look. Maybe 10 years. Until then,
you look in the papers or get an agent.
A little
education and a little hard work is really all that is needed beyond
the necessary lawyer. If your personality will prevent you from
negotiating a contract, then definitely hire a broker. But I don't
feel I have that problem. I plan to sell my house FSBO and offer
a fair market price. I plan to advertise (yes, I'll spend $200)
and hold open houses (with me on the first floor, my wife on the second,
and our kid at grandma's). My "For Sale" sign will have a number to call
for making appointments. If I get a contract I'll have a lawyer
look it over.
I'm really not worried about loosing a contract due to
a personality clash. And that can work both ways. I've literally
run out of houses I was looking at because the agent was following me
around talking non-stop. I've also been stymied by trying to get a
feel for how flexible the seller was on the price. Write a contract
and find out was the only reply a good agent would give. At the few
FSBO houses we saw I actually got to talk with the owner directly about
the price and came away with a good feeling for what price would be
accepted. My feeling was that if I wanted that house, I'd feel better
about writing the contract since I had already talked over the price
with the seller.
--
Jim Sullivan
Jim Sullivan
|> No one is FORCED to hire a real estate agent, yet people keep hiring
|> them and paying the going rate in an area. Why? If people didn't need
|> agents, they wouldn't hire them, and then it wouldn't matter if the
|> commission rate was 0% or 20%.
But why do people *need* agents? Is it the difficulty of buying/selling
a home, or is it the lock on information the real estate industry
guards. Or is it the steering away of FSBO homes by agents as we've
heard of in this thread? Or is it the sheer ignorance by buyers/sellers?
I'm not sure but I remember the days that selling your own car was
difficult and it was easier to trade it in. Now, I know lots
of people who sell their own cars due to a large parking lot nearby
which becomes a FSBO car lot on the weekends. This open air market
allows people to sell/buy in an atmosphere which never existed in
this area. Before, you wuld spend money on paper ads and then wait
around for buyers. Now you just drive up and leave your car and
phone number. I sold my last car within one hour this way.
The open air car lot made the buying/selling of FSBO cars easy. Now,
we can't tow our houses to such lots, but something like the internet
could make available information on houses, similar to the
MLS. One could even include some images. Negotiations could occur
via e-mail. This type of ability could change the way people look for
or buy/sell houses in the future. My guess is that the real estate
industry will fight any openness that allows people to get around
using agents. I know that the lock on the MLS is not the only thing
that makes people go to agents to buy/sell homes, but it is certainly
one reason.
--
Jim Sullivan
Ron Rothenberg
SK>information. In dealing with 6 agents over 8 months, we found none
SK>that showed any fairness in pointing out the good and bad points. We
SK>were very relieved to have bought a FSBO because we were in control of
SK>the deal, not some overpaid intermediary.
If this is your experience with real estate agents, you should learn to
choose more carefully. If you walk into offices or open houses, you are
dealing with novice agents and those with nothing better to do. The
good ones are on the phone working hard for their customers and clients.
In R.E., everybody's customer is nobody's customer, and it sound like
your problem is just as much one of your selection as it is the quality
of agents.
If you need a carpenter, and sift throught the one's out of work or just
sitting around, you are almost guaranteeing that you won't get a good
carpenter. Shop around as you would for a lawyer, accountant or
dentist.
You wouldn't believe that all people in your occupation are good -- some
are great, some are average and some stink up the joint. The same is
true in real estate. Interview an agent as you would a new employee.
It's not that all real estate agents are bad, it's just that all the
good ones are a bit harder to find because they're busy. If you pick
up the first {surgeon, doctor, shoemaker, lawyer, engineer} on the
street, you have no right to expect the best in service. Sorry.
If people would choose more carefully, a lot of the charlatans would go
out of business, tout suite. We get the level of competency and servie
we demand and shop for.
SK>Also, be aware that real estate attorneys can ruin deals too. It's up
SK>to the parties to stay involved and in control of the negotiations.
Ditto my remarks above. Not all r.e. lawyers are bad, though many are.
You need to find the ones that aren't. That's called consumerism.
-rsr-
Ron Rothenberg
Broker/Owner/REALTOR(R)
HomeBase Real Estate
Belmont, MA 02178
(617) 489-4812
Greater Boston's Most Accessible Brokerage.
SK>Sanjay skes...@jpmorgan.com
SK>->|<-
* SLMR 2.1a * Volume in Drive C: TOO_LOUD!
Ron Rothenberg
SK>I ask in earnest because in a deal of ours which fell through, the
SK>realtors did nothing more than messenger service for the documents
SK>during the contract negotiations. The attorneys handled or would have
SK>handled the negotiations, preparation of papers, filing of papers,
SK>etc. BTW, the deal failed because the seller's realtor failed to
SK>disclose some significant defects that became apparent after
SK>inspection.
1) Assist in the choice of a competent real estate attorney, bank, home
inspector, etc. Help negotiate fees with these professionals.
2) Help with the selection of a mortgage orignator and product. Run
figures if necessary, to help buyer make decision.
3) Arrange for home inspection. Help buyer sort through home inspection
and put into perspective. Suggest trustworthy contractors for estimates
on major mechanical, structural or other problems.
4) Send out Purchase & Sale agreement to lawyers for review.
5) Suggest fair adjustments if there were major problems in inspection.
6) Soothe buyers anxieties during case of buyers remorse.
7) Badger lawyer contiuously until he regurgitates the approved P & S
agreement. Get it signed in quadruplicate. Distribute copies to all
parties.
8) Check on mortgage at bank every two days.
9) Offer sympathy when buyer loses temper and rages against bank.
10) Offer tips for shopping for homeowner's insurance.
11) Obtain final water reading.
12) Obtain Smoke Detector certificate.
12) Obtain municipal lien certificate.
13) Make sure bank has loan committment on time. If not, notify seller
and negotiate an extension to financing contingency.
14) Rush loan forms to airport as buyer leaves for unexpected funeral.
15) Offer list of suggestions for movers, compiled from experiences of
former customers.
16) Remind buyer to switch phones, electricity, gas, cable, etc.
17) Check that buyer has fulfilled all mortgage contingencies. Make
sure he has an insurance binder. Make sure he knows to bring a
certified or bank check to closing. MAKE SURE HE KNOWS BOTH SPOUSES
MUST BE AT THE CLOSING (yes, this has been a surprise to some people).
Make sure he knows where the closing will be held. Make sure he knows
about title insurance, and can make an informed decision (the lawyers
will never tell you.)
18) Offer to babysit children or movers during closing.
19) Make sure seller brings smoke detector certificates; keys; parking
permits; garage door openers; both spouses, if applicable; A deed
(this gets forgotten all the time.)
20) Offer last minute reassurance to buyer before closing. Offer
tranquilizers (to brokers, buyers and sellers) , if necessary.
That's about it for a normal transaction. If one of the principals
dies, gets fired, quits their job, has a bad credit rating, never really
owned the house in the first place, include firefighting on a moments
notice in the list.
This list seems short. There's probably more, but these are the
universal ones.
-rsr-
Ron Rothenberg
Broker/Owner/REALTOR(R)
HomeBase Real Estate
Belmont, MA 02178
(617) 489-4812
Greater Boston's Most Accessible Brokerage.
* SLMR 2.1a * On the other hand..you have five different fingers
Scott Finley
sull...@alw.nih.gov (Jim Sullivan) writes:
> But why do people *need* agents? Is it the difficulty of buying/selling
> a home, or is it the lock on information the real estate industry
> guards. Or is it the steering away of FSBO homes by agents as we've
> heard of in this thread?
There is an interesting service in Massachusetts called Homeview which
computerizes color images and specific codified information about many
homes for sale in the area. It permits you to shop for homes and get a
good feel for the inventory while sitting in their offices. The
service is typically provided by a subset of listing brokers, and is
intimately tied to the RE community. Plus they get a co-broker fee of
2.5%, even though they don't contribute to the post-offer work
described by others. Nevertheless, a germ of an idea is there, since
the information is the key. A few gradual changes could open this up:
Higher volume -> lower fees, near universal coverage of the inventory,
listing agreements that reward sellers who find their own buyers, etc.
--Scott Finley Scott_...@smtpgateway.cc.nih.gov
Sanjay Keshava
>SK>catch is that the MLS listings have a disclaimer to the accuracy of the
>SK>information. In dealing with 6 agents over 8 months, we found none
>If this is your experience with real estate agents, you should learn to
>choose more carefully. If you walk into offices or open houses, you are
>dealing with novice agents and those with nothing better to do. The
>good ones are on the phone working hard for their customers and clients.
>In R.E., everybody's customer is nobody's customer, and it sound like
>your problem is just as much one of your selection as it is the quality
>of agents.
How does one select a good real estate agent and verify his/her
expertise? What qualities make a good real estate agent? What do you
do if an agent shows you a house that you like, but you don't like the
agent and decide to get another?
Of the ones we dealt with in the area we now live, my impression is
that they were complacent after a very hot market cooled down. They
*expected* an offer within the first few houses, just like the good old
days in the mid-80's.
BTW, could you re-post your article describing what a realtor does
after the contracts are signed? It arrived as garbage and causes my
news reader to dump its core.
James Cook
: In article 2D22...@pjh.jvnc.net, p...@pjh.jvnc.net (Pete Holsberg) writes:
: >
: >The seller is obligated to disclose latent defects that they may reasonably
: >have knowledge of. If he/she doesn't, the realtors have no way of knowing that
: >there are defects. What would you have had the realtors do?
: As a buyer, I don't care what goes on between the seller and her
: agent. If I ask the agent whether the basement walls leak water, I
: expect an honest answer. Even an "I don't know" is better than "No, of
: course not" out of ignorance. From a buyer's perspective, the agent
: should know all there is to know about the house.
The agent, even if contracted to represent the seller, has a legal and
professional duty to deal with the public fairly and honestly. A check of
the business and professions code and also the professional code of
ethics in California, at least, would reflect this.
: >Did your attorney agree to the "no claims surviving the closing" bit? Even if
: >the seller had lied about the condition of the house? I believe that's fraud.
: Yes, we had no choice other than to look for another house. But he
: showed us a dozen other contracts with the same clause, so I think
: sellers' attorneys use this as leverage. And in our case, the seller
: must not have been desperate enough to omit that clause. Being
: defrauded is bad enough, but pursuing the seller after the fact can be
: difficult and expensive, especially if he/she has moved out of state.
: Which leads to the importance of a well written contract and thorough
: inspection.
Generally, lawsuits involving real estate are handled locally, local to
the real estate at issue - even if the seller moves away. One advantage
of having a seller finance a part of the purchase is that there is a
built in credit to offset against should it turn out that they defrauded
they buyer. A judgment might well provide an offset against what the
buyer would otherwise owe on the seller financing.
: ---
: Sanjay skes...@jpmorgan.com
: ->|<-
--
______________________________________________________________________________
James Cook Internet: jc...@netcom.com
San Francisco Bay, California Compuserve: 76520,2727
James Cook
jcook:
: >In some cases the agent will keep 6%, as is usually the case with Re/Max
: >Realtors. Those agents keep 100% of their individual commissions, and if
: >they happen to act as the listing and selling agent, they thus make 6%.
Pete:
: That's true. Do you know why they don't split the commission with a broker?
: It's because they pay for all of their expenses -- rent for the office, office
: help, phone, etc., etc. Conventional agents work for a broker who provides all
: the support "infrastructure" for half the commission.
Yes. I know. Someone made the statement that agents NEVER get 6% or 100%
of commissions. I responded to that point.
: >It is my understanding that the average agent doesn't handle many
: >transactions in a year, especially if the economy is slow. Given the low
: >average volume of transactions, the commission rate per transaction is
: >"high" - 6% to 7% in most states.
: Is that based on a comparison with commissions in other sales fields? Or is it
: your opinion that it is "high"?
I meant high as compared with the possibility of a 3 or 4% commission.
High meaning "what it now is." High meaning a status quo from which it
doesn't decline due to "competition."
Ron Rothenberg
SK>But, I still don't see how a buyer's agent agreement can protect one
SK>from unethical practices. A buyer's agent puts much time into finding
SK>the right house. He/she will benefit from the sale at any price, so
SK>what is the motivation to obtain a better deal for the seller? How
SK>does the buyer know there wasn't some sort of collusion between the
SK>buying and selling agents to manipulate their clients? These backroom
SK>deals are difficult to prove after the fact.
No, a buyers' agent agreement doesn't change the ethical behavior of the
agent. There are very ethical traditional agents, ther are very
unethical traditional agents. There are ethical buyer agents, there are
unethical buyer agents.
The purchase of a house is not an adversarial procedure -- the seller
wants to sell and the buyer wants to buy. It is not necessary for one
or the other to lose in order for there to be a deal. Both sides can
win.
Any agent must please their clients/customers in order to get referrals.
If customers/clients don't feel they're treated fairly, regardless of
the agency allegiance of the agent, they shouldn't send their friends
and acquaintances.
-rsr-
Ron Rothenberg
Broker/Owner/REALTOR(R)
HomeBase Real Estate
Belmont, MA 02178
(617) 489-4812
Greater Boston's Most Accessible Brokerage.
We Represent Buyers . . . . (yes, you!)
* SLMR 2.1a * Let's trade and be ahead together.
Pete Holsberg
>However, many home buying lessons are learned from the school of
>hard-knocks.
Sad commentary.
>The buyer's agent still benefits from any sale at any price. The
>entire agreement rests on the buyer's agent's integrity. This buyer's
>agent agreement sounds like a false sense of security intended to make
>the buyer believe the agent has his best interests in mind. Just
>because it's formalized and in writing doesn't mean the agent
>wholeheartedly abides by it.
A real estate agent makes a living from making deals. If you want to call that
a "benefit", that's OK with me. :-)
Is jpmorgan a brokerage house? Is that why you're so concerned about people
not living up to the tenets of their ethical standards???
>For example, if after showing 20 houses
>over 3 months, wouldn't the agent get a little anxious to either
>terminate the agreement or encourage the buyer to relax his requirements
>and enter a deal?
Ron Rothenberg will tell you that if an agent can't find you the house you;re
looking for within a couple of weeks, either you don't know what you're
looking for or the agent is incompetent. What would be "wrong" with a buyer's
agent wanting to terminate the agreement after a 3 month period of failure?
Why wouldn't the buyer want to terminate?
The agent might very well point out to the buyer that there are no 4 bedroom
houses in Maplewood, NJ for under $100,000. Is that what you mean by getting
the buyer to relax his requirements?
>The buyer himself may think the same, but ignore
>that for now. The agent might think her time would be better spent on
>more likely-to-buy-quickly clients.
As I said, a real estate agent makes his/her living making deals. If you're a
broker at JPMorgan, would you like to spend your time with me, an unlikely
prospect, or with Joe Moneybags, who's ready, willing and able to invest?
Pete Holsberg
>of problems, as well as the more easily not meantioned problems, that
>I should not expect the selling agent to tell me, the buyer, all of
>the important facts. After all, the selling agent works for the
>seller. I wouldn't expect the selling agent to tell me that the
>neighborhood school is the worst in the area, even if I asked.
Then you have experience with people who should have been taken to the local
board!
>Well our buyers agent produced a contract for us to
>sign, filling in the appropraite blanks. I read it and pointed out that
>it left us only 5 days to have the house inspected. She said that this
>was normal and acted as though it was not a negotiable point. She also
>had an inspector she could recommend and that the inspector could do
>the job within 5 days. I had been told not to trust the agent's
>inspector so I signed the contract and called one a friend recommended.
>He couldn't get to it for about a week. So I used the agent's inspector
>who was good, but was obviouly ignoring the severity of problems he found.
Everything is negotiable, including the commission. One negotiating ploy is to
mark things "non-negotiable". It's just a strategy.
>Had I had a real estate lawyer who worked for me look at the contract
>I might have had time to have my inspector look at the house by
>modifying the contract to give him time.
I think that the consensus on the newsgroup is that an attorney is necessary,
just to CYA.
>I feel that in this case the
>agent was working for herself and was not looking after my best
>interests, though I don't feel she was trying to screw me.
Did you have a buyer's agency contract with this agent? If not, you are
absolutely correct. She *has* to do that; she works for the seller.
>My problem is not with buyers or sellers agents. My problem is that
>the system seems to be geared toward *needing* an agent. I don't
>have access to the MLS without one and to see the MLS I need to
>talk to an agent. I hear that the MLS might open up to non-agents
>for a fee. I'm waiting for the day the internet will be so widely
>used that it will be the place to look. Maybe 10 years. Until then,
>you look in the papers or get an agent.
There's more that an agent does than simply scour the MLS for you.
>A little
>education and a little hard work is really all that is needed beyond
>the necessary lawyer. If your personality will prevent you from
>negotiating a contract, then definitely hire a broker. But I don't
>feel I have that problem. I plan to sell my house FSBO and offer
>a fair market price. I plan to advertise (yes, I'll spend $200)
>and hold open houses (with me on the first floor, my wife on the second,
>and our kid at grandma's). My "For Sale" sign will have a number to call
>for making appointments. If I get a contract I'll have a lawyer
>look it over.
>I'm really not worried about loosing a contract due to
>a personality clash. And that can work both ways. I've literally
>run out of houses I was looking at because the agent was following me
>around talking non-stop. I've also been stymied by trying to get a
>feel for how flexible the seller was on the price. Write a contract
>and find out was the only reply a good agent would give. At the few
>FSBO houses we saw I actually got to talk with the owner directly about
>the price and came away with a good feeling for what price would be
>accepted. My feeling was that if I wanted that house, I'd feel better
>about writing the contract since I had already talked over the price
>with the seller.
Good luck to you. Very few people can do this successfully and I take my hat
off to you if you can. Most of the realtors in this area get another agent to
list their own homes rather than market it themselves. Surely they don't need
an agent; why do you think they do it?
Happy New Year!
Pete Holsberg
>From: jc...@netcom.com (James Cook)
>Subject: Re: Real Estate Agent vs For Sale By Owner
>Date: Fri, 31 Dec 1993 02:57:28 GMT
>Sanjay Keshava spaketh thusly unto the world:
>: In article 2D22...@pjh.jvnc.net, p...@pjh.jvnc.net (Pete Holsberg) writes:
>: >
>: >The seller is obligated to disclose latent defects that they may reasonably
>: >have knowledge of. If he/she doesn't, the realtors have no way of knowing that
>: >there are defects. What would you have had the realtors do?
>: As a buyer, I don't care what goes on between the seller and her
>: agent. If I ask the agent whether the basement walls leak water, I
>: expect an honest answer. Even an "I don't know" is better than "No, of
>: course not" out of ignorance. From a buyer's perspective, the agent
>: should know all there is to know about the house.
>The agent, even if contracted to represent the seller, has a legal and
>professional duty to deal with the public fairly and honestly. A check of
>the business and professions code and also the professional code of
>ethics in California, at least, would reflect this.
Your response is to Sanjay. We're in agreement here.
Pete Holsberg
>From: jc...@netcom.com (James Cook)
>Subject: Re: Real Estate Agent vs For Sale By Owner
>Pete Holsberg spaketh thusly unto the world:
>jcook:
>: >In some cases the agent will keep 6%, as is usually the case with Re/Max
>: >Realtors. Those agents keep 100% of their individual commissions, and if
>: >they happen to act as the listing and selling agent, they thus make 6%.
>Pete:
>: That's true. Do you know why they don't split the commission with a broker?
>: It's because they pay for all of their expenses -- rent for the office, office
>: help, phone, etc., etc. Conventional agents work for a broker who provides all
>: the support "infrastructure" for half the commission.
>Yes. I know. Someone made the statement that agents NEVER get 6% or 100%
>of commissions. I responded to that point.
I did. OK -- they "get" 6% but they sure don't "keep" 6%. :-)
>: Is that based on a comparison with commissions in other sales fields? Or is it
>: your opinion that it is "high"?
>I meant high as compared with the possibility of a 3 or 4% commission.
>High meaning "what it now is." High meaning a status quo from which it
>doesn't decline due to "competition."
I'm sure you can find agencies that will work on 3-4%, just as you will find
athletes who will work for $50,000 per year.
Pete Holsberg
>Any agent must please their clients/customers in order to get referrals.
>If customers/clients don't feel they're treated fairly, regardless of
>the agency allegiance of the agent, they shouldn't send their friends
>and acquaintances.
Ron,
This is the point that seems to be overlooked by most of the posters in
this thread: a successful agent makes a living from referrals. Successful
agents -- people who are out there making deals, helping people sell and
helping people buy -- are not spending their time on the phone making cold
calls, or sitting at open houses (unless the seller insists!). They are
getting business from referrals -- from satisfied customers and clients.
Thus, everything a smart agent does goes toward satisfying the customer/client.
I hope that people will understand that.
Happy New Year.
Ron Rothenberg
PJ>>hard-knocks.
PJ>Sad commentary.
And so avoidable too, a little shopping and reading a good book or two
on R.E. before setting out to make the biggest purchase of their life
would save people from 90% of these harsh lessons.
PJ>not living up to the tenets of their ethical standards???
PJ>>For example, if after showing 20 houses
PJ>>over 3 months, wouldn't the agent get a little anxious to either
PJ>>terminate the agreement or encourage the buyer to relax his requirements
PJ>>and enter a deal?
PJ>Ron Rothenberg will tell you that if an agent can't find you the house you;r
PJ>looking for within a couple of weeks, either you don't know what you're
PJ>looking for or the agent is incompetent. What would be "wrong" with a buyer'
PJ>agent wanting to terminate the agreement after a 3 month period of failure?
PJ>Why wouldn't the buyer want to terminate?
PJ>The agent might very well point out to the buyer that there are no 4 bedroom
PJ>houses in Maplewood, NJ for under $100,000. Is that what you mean by getting
PJ>the buyer to relax his requirements?
Many buyers (and sellers for that matter) enter the market with
preconceived notions about prices, conditions, etc. Most who are ready
to buy quickly learn that you are not going to get a house in an active
market for 50% of its value, and that good homes are a true, competetive
market. Others don't learn -- there are sellers who avoid selling by
not being realistic. There are buyers who avoid buying by not being
realistic. Usually it masks some other fear, which they can sometimes
be helped over. I try to weed out these clients during our initial
counseling/interview session (the interview is 2-way).
The buyers that I choose to work with are those with whom I have a high
chance of success -- due to a good personality match, among other
things. It doesn't have to do with the price of the house, or the
amount of work I have to put in. The underlying question to all
qauestions I ask is:
1) Can I help these people?
2) Can they help themselves?
Since buying a house is a collaboration, both answers MUST be yes. BTW,
I have had clients that took almost two years to buy -- we work w
th people who have financial, credit, bankruptcy problems, etc.,
so we just don't work with 'prime' clients.
iPJ>>The buyer himself may
think the same, but ignore PJ>>that for now. The agent might think her
time would be better spent on PJ>>more likely-to-buy-quickly clients.
After three months of working hard together, they may be just as anxious
to get rid of me as I am to get rid of them.
RULE 1 (brokers' school of hard knocks - After working closely with
someone for three months, you either love each other or hate each other,
there is no in-between.
-rsr-
Ron Rothenberg
Broker/Owner/REALTOR(R)
HomeBase Real Estate
Belmont, MA 02178
(617) 489-4812
Greater Boston's Most Accessible Brokerage.
* SLMR 2.1a * My reality check just bounced.
Ron Rothenberg
PJ>getting business from referrals -- from satisfied customers and clients.
PJ>Thus, everything a smart agent does goes toward satisfying the customer/clie
PJ>I hope that people will understand that.
You're so right -- clients/customers who come in on referral already
know your work is good, know you're honest, you don't have to build
confidence and trust -- it takes a lot less work than working with
customers who call on an ad or find you some other way.
The referrals are the real gravy in the R.E. business, and they are what
make it profitable. Not one deal here and there.
I tell my clients that if I please them and give them the best service
they ever had, they owe me 5 referrals. I remind them (in a nice way of
this) every now and then, and most pay up.
One commission will buy me food and shelter for a few weeks, or maybe a
month, but my continued welfare relies on a steady stream of satisfied
customers. That is my salary. If people sending their friends, I'll
have to go back to my software development job.
-rsr-
* SLMR 2.1a * bugsbugsbugsbugsbugsbugsbugsbugsbugsbugsbugs
Seth B Rothenberg
>
>The referrals are the real gravy in the R.E. business, and they are what
>make it profitable. Not one deal here and there.
>
>I tell my clients that if I please them and give them the best service
>they ever had, they owe me 5 referrals. I remind them (in a nice way of
>this) every now and then, and most pay up.
We spoke to a Real Estate agent in Cleveland Heights, OH...he
said he had sold most of the houses in the neighborhood once,
some twice....
When we heard about our new house being for sale, we called
the agent we had been working with, not the listing agent.
(And, I think he convinced the listing agent to convince the
seller about the bird in hand...)
Incidentally, our agent was either the listing agent or the
showing agent for most of the houses we saw:-)
Elaine Jackson
>One thing I forgot. My wife, who is a realtor, says that in 70-80% of her
>business, her real work starts *after* the contracts have been signed. I
>wonder if you know what she means by that?
No, I don't know. Could you please tell us?
Elaine Jackson
Ron Rothenberg
SK>BTW, could you re-post your article describing what a realtor does
SK>after the contracts are signed? It arrived as garbage and causes my
SK>news reader to dump its core.
HOW TO CHOOSE A REAL ESTATE AGENT (for buyers)
--------------------------------------------------------------------------
Choose your Real Estate Agent Carefully
look for
* Competence - does the agent know the houses in the market (the inventory)
and have a good working knowledge of real estate custom and law in your
area. Does the agent know about the mortgage market and where to find the
good originators, home inspectors and lawyers.
* Commitment - does this person consider their job a real profession, or are
they just doing it part time to earn extra money? Have they kept up with
continuing education. How have they worked to be a better agent? Does the
agent spend much time looking at new houses on the market, broker's open
houses, etc. Successful and good agents are usually out of the office.
* Communication - the ability to explain the jargon-filled and idiosyncratic
(idiot-filled and jargosyncratic?) world of residential real estate to you
clearly and concisely. Ask a few questions about real estate terms or
whatever that's confounding you. Make sure the agent's communications skills
are good. Make sure he/she has the patience to explain it clearly until you
understand it.
* Comfort - you should feel comfortable about and with this agent. There should
be good rapport and trust.
* Confidence - you should feel confidence that this agent is a good match for
you -- the agent should also have confidence that he/she can do the best job
for you.
* Creative thinking - is the agent just going to thrust the MLS book in your
nose and let you choose what you want, or will he/she try to use his/her
skills to match you with the right house, to help you learn what you want,
and for him/her to listen and learn with you. This will save you a great
deal of time, since you won't have to look at every house in town. You
really shouldn't have to look at more than 6-7 houses if you're working with
an observant and knowledgeable agent.
* Credentials - has the agent furthered his/her professional skills by earning
any credentials such as CRS (Certified Residential Specialist) or GRI
(Graduate, REALTORS(R) Institute. Is the agent a member of the local and
national Association of REALTORS(R). (Note: A REALTOR is not just an agent
-- he/she is a member of the NAR and must subscribe to a code of ethics, etc.
- If you deal with REALTORS there is a method for mediation if you have
problems, etc.)
Though it's not always true that people who are always advancing their
education and skills are better at what they do than others, there is a real
strong correlation.
and maybe most important:
* Caring personality - Does the agent listen to you and note your anxieties,
fears and objections and works to assuage them. You should get the feeling
that this agent cares more about making you happy than collecting his/her
commission.
Once you've found this paragon, you are much b
etter served by working with just
one agent. Let the agent know it. Be as considerate of his time and work as
he is of yours. Loyalty and time commitment is a two-way street - No one can do
a thorough and caring job for you if you are working with ten agents -- if you
are working with many agents, it is usually because they are new, or
incompetent and don't have anything better to do with their time than sit in
the office or sit at open houses.
People who work with many agents when they know of one who is exceptional
deprive themselves of that agents' full-time attention.
If you work with many agents, you'll get a confusing array of advice and
opinions, some correct, some incorrect. It's better to get the professional
opinion of one knowledgeable person you trust, then check it out independently
than to sort through the flood of information.
If you're buying a house soon, how can you shop for an agent?
Begin by asking everyone you know who has recently bought a house. Ask them
how well they liked their agent. Every successful agent relies on making
people happy, then having those people refer their friends. Speak to these
agents, then choose the one that feels the best.
Ron Rothenberg Broker/Owner/REALTOR(R) HomeBase Real Estate Belmont, MA 02178
(617) 489-4812 Greater Boston's Most Accessible Brokerage.
* SLMR 2.1a * Age 'n Treachery Overcome Youth 'n Skill
Ron Rothenberg
SU>Well our buyers agent produced a contract for us to
SU>sign, filling in the appropraite blanks. I read it and pointed out that
SU>it left us only 5 days to have the house inspected. She said that this
SU>was normal and acted as though it was not a negotiable point. She also
Customs vary in different places -- I always encourage people to shop
for an inspector before finding a house. When we make an offer, we have
the inspector scheduled, and we make the inspection contingency date
very short (5 days vs. customary 10 days) in order to make the offer
more attractive to the seller.
SU>I agreed to the terms out of ignorance and my agents advice. I'll never
SU>do this again. Luckily there is no horror story involved here but there
Get a new agent.
SU>Had I had a real estate lawyer who worked for me look at the contract
SU>I might have had time to have my inspector look at the house by
SU>modifying the contract to give him time. I feel that in this case the
SU>agent was working for herself and was not looking after my best
SU>interests, though I don't feel she was trying to screw me.
Get a new agent. Don't send your friends to this one.
SU>BTW, I highly recommend being there when the inspector inspects the house.
This is essential and necessary!
I highly recommend not hiring a home inspector who will not let you be
there.
-rsr-
Ron Rothenberg
Broker/Owner/REALTOR(R)
HomeBase Real Estate
Belmont, MA 02178
(617) 489-4812
Greater Boston's Most Accessible Brokerage.
* SLMR 2.1a * Marriage isn't a word, it's a sentence.
Ron Rothenberg
SU>My experience with family and friends is that they do not immediately go
SU>looking for an agent. They first try to decide what area they want
SU>to live in then scan the Sunday paper for houses in that area. If some
SU>sound good, they go look. You're right that 95% have an agent in the house.
SU>But the buyers rarely have an agent with them when they show up. I'd say
SU>that 10% of buyers have an agent working for them. (out of the air :&)
SU>|>
The figure's much closer to 70% of all buyers.
SU>Did you advertise in the papers? Five weeks is not a long time. I think th
SU>three months is the average time to sell a home.
Five weeks is a very long time -- the most excitement and the highest
price for a house is gotten when it first comes on the market - in the
first two or three weeks. Houses go down in value the longer they stay
on the market, especially in a down or stable market.
SU>I'm surprised that an FSBO home without
SU>an agent would be ignored by most potential buyers. When I went out on
SU>Sundays looking for a home I ran into a few FSBO and was surprised that
SU>the guy showing the home was the owner. That "Principles Only" notation
SU>in the ad is the usual giveaway. It didn't stop me from seeing the
SU>house nor discourage me from considering it. Am I unusual?
Nationally, very few homes are sold directly by newspaper ads and open
houses - somewhere around 4%. Open house ads bring buyers in, but most
end up buying another house from that a broker they meet at the open
house sends them.
car lot and ask the dealer for any car, you will get a better deal
SU>It is certainly not to the buyers advantage to *seek* an FSBO home. But it
SU>is not to their disadvantage either. The problem comes when you have a buye
SU>agent who steers you away from FSBO homes, thus limiting you to the 95%
SU>of homes for sale.
Try a buyer agent -- since the agent has a means of compensation, he/she
can help you buy MLS, unlisted, listed, bank-owned, auctions, etc. All
houses are fair game.
SU>-Jim
* SLMR 2.1a * Hi Windows 3.0, bye Windows 3.0
Ron Rothenberg
SU>|> them and paying the going rate in an area. Why? If people didn't need
SU>|> agents, they wouldn't hire them, and then it wouldn't matter if the
SU>|> commission rate was 0% or 20%.
SU>But why do people *need* agents? Is it the difficulty of buying/selling
They don't need agents. They choose to hire agents for a variety of
reasons.
SU>guards. Or is it the steering away of FSBO homes by agents as we've
SU>heard of in this thread? Or is it the sheer ignorance by buyers/sellers?
I don't think there's much steering away from FSBO by agents. I think
FSBO owners are good enough at turning people away all by themselves.
There have been agencies, like HELP-U-SELL that 'unbundle' services --
they will let you buy MLS listing for a few $100 dollars, and provide
othe services.
In most cases, these unbundled services have been massive failures.
SU>we can't tow our houses to such lots, but something like the internet
SU>could make available information on houses, similar to the
There's much more to selling a home than listing it. Let's talk again
after you've given it a try . . . .
(there's a saying among agents that 'if it weren't for r.e. agents, we'd
still be living in caves. buyers come to agents because they need help
making a good decision fast.)
BTW, when I sold my last home, I hired an agent (even though I'm a
broker). He was a particularly good and honest salesman, and I admired
his work. He always sells a home for 8%-10% above what they would go
for with an average agent. The 5% I paid him was well worth it, for
both of us, and I have access to this mysterious MLS and real estate
info that you think is being kept from you.
If you don't think an agent is necessary, don't use one, don't hire one.
-rsr-
Ron Rothenberg
Broker/Owner/REALTOR(R)
HomeBase Real Estate
Belmont, MA 02178
(617) 489-4812
Greater Boston's Most Accessible Brokerage.
* SLMR 2.1a * "Easy credit, terms available..." - Satan
Ron Rothenberg
SK>because it's formalized and in writing doesn't mean the agent
SK>wholeheartedly abides by it. For example, if after showing 20 houses
SK>over 3 months, wouldn't the agent get a little anxious to either
SK>terminate the agreement or encourage the buyer to relax his requirements
SK>and enter a deal? The buyer himself may think the same, but ignore
SK>that for now. The agent might think her time would be better spent on
SK>more likely-to-buy-quickly clients.
I don't know why you find this so surprising. Any business of any sort
that doesn't take the most profitable contracts will soon be out of
business in a competetive market.
Personally (and this is true of several other buyer agents in this area)
if I can not find someone a home within 6-10 showings, there is usually
a communication problem or something -- if they're serious buyers, I try
to match them with a broker who fits their personality better. If we
don't have a house yet, something is wrong with our collaboration.
If there is a reason why they are not ready to buy, it also becomnes
apparent to me by that time and I talk to them about it and see if we
can remedy it together. It's not always simple. Just as some sellers
sabotage their efforts to sell a house, so do buyers.
Usually I don't run into these problems since I interview and counsel
all my clients carefully. I don't take on all contracts offered -- if
there is a mismatch between the way I work and the way the client works,
I refer them out. Frequently I get referrals from clients I have
referred to other brokers.
-rsr-
Ron Rothenberg
Broker/Owner/REALTOR(R)
HomeBase Real Estate
Belmont, MA 02178
(617) 489-4812
Greater Boston's Most Accessible Brokerage.
* SLMR 2.1a * Why do backups fail when you need them?
Ron Rothenberg
SU>of problems, as well as the more easily not meantioned problems, that
SU>I should not expect the selling agent to tell me, the buyer, all of
SU>the important facts. After all, the selling agent works for the
SU>seller. I wouldn't expect the selling agent to tell me that the
SU>neighborhood school is the worst in the area, even if I asked.
Among other things, agents are FORBIDDEN BY LAW to make value judgements
such as this regarding neighborhoods and schools. Is this a good
school? is a very tricky question. To some people it means Are there
MINORITIES at this school? To others it means Are the parents involved?
If some one asks an agent that question, the response should be for the
buyer to be more specific.
SU>|> SU>The real advantage to selling/buying without a broker is that you most
SU>|> SU>likely would be using a real estate attorney. Next time I buy/sell a
SU>|> SU>house I plan to hire one. Agents, IMHO, are not qualified to
SU>|> SU>read/write contracts for anyone. And if they are, then almost
SU>|> SU>anyone could do it as well. Most house sales are simple and so
SU>|> SU>are the contracts. The contracts are standard and require
SU>|> SU>little modification. A house which requires major modifications to th
SU>|> SU>contract should have an attorney involved anyway.
SU>|> SU>|>
SU>|>
SU>|> Sorry to disagree. The role of the agent and the attorney are very
SU>|> different. You do need both. The attorney handles the contract and
SU>|> formalizes the deal that you and the agent make. The agent is in charge
SU>|> of the market -- to give you perspective on the market, analyze your
SU>|> competitioin, etc. , most lawyers aren't all that market savvy (I give
SU>|> courses for the local bar assoc., and some of the lawyers haven't a clue
SU>|> to the difference between a hot house and a dog -- they just handle the
SU>|> paperwork.)
SU>|>
SU>|> Agents definitely aren't qualified to read/write contracts for anyone.
SU>|> They can fill in blanks and add clauses, but they can not write
SU>|> contracts, nor should you rely on them to. Very few home sales are
SU>|> simple.
SU>Well our buyers agent produced a contract for us to
SU>sign, filling in the appropraite blanks. I read it and pointed out that
SU>it left us only 5 days to have the house inspected. She said that this
SU>was normal and acted as though it was not a negotiable point. She also
SU>had an inspector she could recommend and that the inspector could do
SU>the job within 5 days. I had been told not to trust the agent's
SU>inspector so I signed the contract and called one a friend recommended.
SU>He couldn't get to it for about a week. So I used the agent's inspector
SU>who was good, but was obviouly ignoring the severity of problems he found.
SU>I agreed to the terms out of ignorance and my agents advice. I'll never
SU>do this again. Luckily there is no horror story involved here but there
SU>could have been had I let the inspector do the inspection alone. He
SU>would agree, at my insistance, that a problem was more than cosmetic.
SU>The 20 year old boiler that had the pressure reading in the red was one
SU>I refused to let slide.
SU>Had I had a real estate lawyer who worked for me look at the contract
SU>I might have had time to have my inspector look at the house by
SU>modifying the contract to give him time. I feel that in this case the
SU>agent was working for herself and was not looking after my best
SU>interests, though I don't feel she was trying to screw me.
SU>BTW, I highly recommend being there when the inspector inspects the house.
SU>|>
SU>|>
SU>|> SU>|> Why is it not a good idea for buyer and seller to meet? Basically,
SU>sa
SU>|> SU>|> or purchase of an item that represents such a large sum (to most
SU>people)
SU>|> SU>|> is extremely stressful. An intermediary can be more objective than
SU>either
SU>|> SU>|> of the principals, and can soothe wounded feelings when things get
SU>tense.
SU>|>
SU>|> Sometimes it is a good idea for them to meet, sometimes not. If I have
SU>|> buyers who are likable, I always like to have them meet the seller.
SU>|> Sellers sell homes to people they like. If my buyers are unlikable or
SU>|> impolite, I'd just as soon never have them meet. When buyers and
SU>|> sellers meet, egos become involved, and you tend to get mano-a-mano
SU>|> faceoffs, ego negotitation, competition, and the type of fistfights
SU>|> mentioned above. One reason to use an agent is that you don't care to
SU>|> deal with the other party.
SU>I agree that a broker is a great thing to have when two people
SU>sit down to work out any agreement. I wish I had one when I
SU>bought my last car. I almost punched out the salesman who
SU>after insulting my intelligence once too often tried to raise the
SU>price AFTER I signed the contract.
SU>My problem is not with buyers or sellers agents. My problem is that
SU>the system seems to be geared toward *needing* an agent. I don't
SU>have access to the MLS without one and to see the MLS I need to
SU>talk to an agent. I hear that the MLS might open up to non-agents
The MLS is only one tool an agent has. It doesn't sell houses, it only
requests the cooperation of other agents. Anyone who thinks that
selling is as simple as listing in the MLS is wrong. There are areas
with open MLS systems, or no MLS systems, and FSBOs don't sell any
better there.
SU>feel I have that problem. I plan to sell my house FSBO and offer
SU>a fair market price. I plan to advertise (yes, I'll spend $200)
SU>and hold open houses (with me on the first floor, my wife on the second,
SU>and our kid at grandma's). My "For Sale" sign will have a number to call
SU>for making appointments. If I get a contract I'll have a lawyer
SU>look it over.
Better yet, put both of you on the first floor. Buyers hate to be
followed or watched. Isn't it annoying when they do that at Radio
Shack. Can I help you? No! Leave me alone already!
Don't price the house fairly -- price it competetively -- listing price
determines nothing except who looks at the house.
Offer to cooperate with and compensate with selling brokers if they
bring you a winning offer -- You may find that these offers are more
than 3% higher than the ones you get.
And remember - only 4% of all homes sold nationally are sold DIRECTLY
through an open house ad.
Good luck.
-rsr-
Ron Rothenberg
Broker/Owner/REALTOR(R)
HomeBase Real Estate
Belmont, MA 02178
(617) 489-4812
Greater Boston's Most Accessible Brokerage.
* SLMR 2.1a * Standards are Wonderful! So many to pick from!
Steve Pope
> If you're buying a house soon, how can you shop for an agent?
> Begin by asking everyone you know who has recently bought a
> house. Ask them how well they liked their agent. Every
> successful agent relies on making people happy, then having
> those people refer their friends. Speak to these agents,
> then choose the one that feels the best.
Another excellent way to meet agents is at open houses.
How they conduct themselves at an open house can tell you
a lot about their way of doing business, and whether you
would like them personally.
The advantage of this is that you are probably going to
open houses, anyway, just to get a feel for the market.
As you do this, talk to the agents, and collect ther names;
then when you get to a certain threshold of seriousness, contact
the agent you met that you would like to deal with.
It generally gets their attention when you tell them,
"I've met about 20 or so agents around here, and I've
picked YOU to help me now that I'm ready to buy.
Can you do it?"
Worked for me, anyway.
The problem with Rothenberg's suggestion above is that
the opinions of your friends are going to be highly colored
by what these people think of realty agents in general.
Steve
Jim Sullivan
|> SU>|> No one is FORCED to hire a real estate agent, yet people keep hiring
|> SU>|> them and paying the going rate in an area. Why? If people didn't need
|> SU>|> agents, they wouldn't hire them, and then it wouldn't matter if the
|> SU>|> commission rate was 0% or 20%.
|>
|> SU>But why do people *need* agents? Is it the difficulty of buying/selling
|>
|> They don't need agents. They choose to hire agents for a variety of
|> reasons.
One reason. They need them or they have to try to sell it on their own.
The later being difficult due to a lack of knowlege of selling homes and
no place to advertise except the papers.
|>
|> SU>guards. Or is it the steering away of FSBO homes by agents as we've
|> SU>heard of in this thread? Or is it the sheer ignorance by buyers/sellers?
|>
|> I don't think there's much steering away from FSBO by agents. I think
|> FSBO owners are good enough at turning people away all by themselves.
Well I think I and most people who have used buyers agents would
disagree. All FSBOs I found I found on my own. All were ignored
by my agent even though they fit the type of house I was looking for.
Maybe the term "steering away" should become "avoiding". If I saw
one, my agent said that I had every right to go look at it, but she
was not going to take me to one since they were not in the MLS and
thus she did not necessarily know what was in them. You downplay the MLS
yet it is highly used by RE agents for searching homes for buyers.
|> There have been agencies, like HELP-U-SELL that 'unbundle' services --
|> they will let you buy MLS listing for a few $100 dollars, and provide
|> othe services.
|>
|> In most cases, these unbundled services have been massive failures.
The Help-U-Sell in our area is doing alright. I agree that it would be
more difficult to work with them since you need to buy the services
ala carte. However, the existance of these unbundled services shows
that some sellers/buyers do not want/like the existing system of
all services or nothing.
|>
|> SU>we can't tow our houses to such lots, but something like the internet
|> SU>could make available information on houses, similar to the
|>
|> There's much more to selling a home than listing it. Let's talk again
|> after you've given it a try . . . .
It won't be for a while. When I do though I plan to have a few nights
of lost sleep
and weekends lost due to holding my house open. My advantage is that
I live in a very desirable area, the house is on a main street so that
a sign will advertise it nicely. It is in a historic district and I have
avenues of advertising other than the newspaper such as the historic society.
I would agree that a house in an
average neighborhood tucked away in some cul-de-sac would be harder
to sell and might require an RE agent to pull in buyers since the current
lock on the MLS prevents buyers from knowing about homes unless they
are advertised in the local paper, and the buyer happens to read it.
|>
|> (there's a saying among agents that 'if it weren't for r.e. agents, we'd
|> still be living in caves. buyers come to agents because they need help
|> making a good decision fast.)
I find that a bit smug. RE agents in most cases do a fair job. However,
sellers and buyers have little choice due to the RE industries lock on
the system of buying/selling homes. Why do people go to agents? Because
that's the name of the game, and there is NO other game in town. I
personally don't like the game and would like an alternative.
|>
|> BTW, when I sold my last home, I hired an agent (even though I'm a
|> broker). He was a particularly good and honest salesman, and I admired
|> his work. He always sells a home for 8%-10% above what they would go
|> for with an average agent. The 5% I paid him was well worth it, for
|> both of us, and I have access to this mysterious MLS and real estate
|> info that you think is being kept from you.
|> If you don't think an agent is necessary, don't use one, don't hire one.
The MLS is not that mysterious. It simply a database. What makes it
mysterious to some people is that it is protected by the RE industry,
which is fine by me since they own it. My problem with all this is
that there is
little alternative except scouring the papers and driving through
neighborhoods. And God help the poor soul buying a house in a new
city hundreds of miles away.
I agree (and have agreed) that agents are necessary under certain conditions.
I don't have a problem with that. My problem is with the RE industry
being virtually required to sell your home. As I've said before, I have
more than a few avenues to selling my car other than trading it in. Why
is it that if I want to sell my home I get agents who all say 6% or
forget it? Why do I need an agent to find houses for me when a database
of houses exists which I cannot see without an agent and no alternative
database exists? We have heard in this thread too many times that when
an ethical problem develops, you should consult the local RE board. Everyone
knows that most people simply drop the agent. The RE industry is
pretty much self governing and has lobbied for laws to keep it's
grip on that 6% for every home sold. Years ago anyone could get
a RE license simply by passing the RE course which was offered at
many night colleges. Problem was that people were getting their licenses
and then selling their homes on their own or buying homes and collecting
3% since they had a license. Today, in order to get an RE license you
need to take the course AND work for an "established" RE company for
(+/-)6 months. This is written in law in MD and has the effect of eliminating
anyone except but those entering the RE industry from getting an
RE license. Why is this? What changed over the past 20 years?
Maybe it's due to my UNIX backround and anti closed/proprietary
nature (can you say Microsoft?) but I would like to see an open
RE system where the seller can sell the home on his own and have
access to the same information as an agent. If I don't have the
time or stamina I'd hire an agent. Otherwise I would sell it
on my own. Buyers and buyer's agents would also have access to
the same information. The internet is fertile ground for such
a database to develop over the next 5-10 years. Until then, most
buyers and sellers will feel left out in the cold until they hug
their nearest RE agent.
--
Jim Sullivan
Scott Finley
ron.rot...@channel1.com (Ron Rothenberg) writes:
> I don't think there's much steering away from FSBO by agents. I think
> FSBO owners are good enough at turning people away all by themselves.
I have to respectfully disagree here, Ron. I suspect that you don't
steer your clients away from FSBOs, but my experience has been that
many agents bad-mouth FSBOs and avoid them like the plague. They are
surely more work for the agent. Unfortunately, this experience has
included buyer agents, although admittedly the buyer agents in question
had 1) never been buyer's agents before (this will be common as buyer
agency grows), and 2) wouldn't take the time to actually learn the FSBO
inventory in the area. I would have fired the folks in question had
time been my friend. Where were you when I was looking for a buyer's
agent in the western Boston suburbs?
--Scott Finley Scott_...@smtpgateway.cc.nih.gov
Sanjay Keshava
>If there is a reason why they are not ready to buy, it also becomnes
>apparent to me by that time and I talk to them about it and see if we
>can remedy it together. It's not always simple. Just as some sellers
>sabotage their efforts to sell a house, so do buyers.
>
>Usually I don't run into these problems since I interview and counsel
>all my clients carefully. I don't take on all contracts offered -- if
>there is a mismatch between the way I work and the way the client works,
>I refer them out. Frequently I get referrals from clients I have
>referred to other brokers.
>Ron Rothenberg
>Broker/Owner/REALTOR(R)
Very good. It sounds like you uphold the highest ethical standards and
try to do what's best for your clients.
Sanjay Keshava
>In article <2furhq$e...@archive.ny.jpmorgan.com> skes...@jpmorgan.com (Sanjay Keshava) writes:
>>The buyer's agent still benefits from any sale at any price. The
>>entire agreement rests on the buyer's agent's integrity. This buyer's
>>agent agreement sounds like a false sense of security intended to make
>>the buyer believe the agent has his best interests in mind. Just
>>because it's formalized and in writing doesn't mean the agent
>>wholeheartedly abides by it.
>
>A real estate agent makes a living from making deals. If you want to call that
>a "benefit", that's OK with me. :-)
You are introducing a connotation not intended by my original statement.
>Is jpmorgan a brokerage house? Is that why you're so concerned about people
>not living up to the tenets of their ethical standards???
Yes, in some ways, in answer to the first question. No, to the second.
>>For example, if after showing 20 houses
>>over 3 months, wouldn't the agent get a little anxious to either
>>terminate the agreement or encourage the buyer to relax his requirements
>>and enter a deal?
>
>Ron Rothenberg will tell you that if an agent can't find you the house you;re
>looking for within a couple of weeks, either you don't know what you're
>looking for or the agent is incompetent. What would be "wrong" with a buyer's
>agent wanting to terminate the agreement after a 3 month period of failure?
>Why wouldn't the buyer want to terminate?
Two weeks is much too little time. The house one is seeking may not
yet be on the market. There's nothing wrong with either party wanting
to terminate the agreement after 3 months. There should not be a need
for such an agreement.
>The agent might very well point out to the buyer that there are no 4 bedroom
>houses in Maplewood, NJ for under $100,000. Is that what you mean by getting
>the buyer to relax his requirements?
Let's not introduce the absurd.
>>The buyer himself may think the same, but ignore
>>that for now. The agent might think her time would be better spent on
>>more likely-to-buy-quickly clients.
>
>As I said, a real estate agent makes his/her living making deals. If you're a
>broker at JPMorgan, would you like to spend your time with me, an unlikely
>prospect, or with Joe Moneybags, who's ready, willing and able to invest?
I don't question this aspect, only the fact that a buyer's agent
agreement is a facade to make the buyer think the agent is working for
his (buyer's) interests. The agent will do whatever she can, according
to her scruples, to get the buyer into a deal and get a commission.
As an aside...
Throughout this thread there seem to be two polar views, one held by
those with close contact to the real estate agency business, and the
other by those who think some kind of change is needed to improve the
quality and value of service.
In my area, several (aprox 8) homes have recently gone up for sale.
Over half of them are FSBO. One started as FSBO, switched to an
agency, and then switched back over 3 weeks time. I think, with no
factual basis, that there are so many FSBO's because the sellers don't
think the service is worth the commission.
James Cook
: I don't question this aspect, only the fact that a buyer's agent
: agreement is a facade to make the buyer think the agent is working for
: his (buyer's) interests. The agent will do whatever she can, according
: to her scruples, to get the buyer into a deal and get a commission.
Actually, in most states, the use of "buyers agency" agreements was
somewhat pushed by court cases which placed heavy responsibility on
brokers who were not legally bound to promote buyers' interests first,
yet represented buyers while having a legal duty primarily to sellers.
Brokers loathed being caught between - technically representing sellers,
yet treated heavily by courts for not doing so when working with buyers.
These buyer's agency agreements were "invented" and recognised to clean
up the arrangement of legal duties to better protect the public. They're
not a gimick. Yet, the point is well taken that a agency agreement, by
itself, doesn't make the agent "do the right thing." They're just an
improvement of his legal duties to his buyer-client.
sim...@gmail.com
Local full-service agents will submit commission quote and proposals to win your business. I like it because it removes the hassle of calling different agents and the awkwardness of negotiating commission with them. Your information remains private until you pick an agent to interview.
This startup is picked up by the Wall Street Journal http://online.wsj.com/article/PR-CO-20130429-912590.html and Inman News. Check it out.