Buying a house without a buyer's agent - negotiating tips?
texf...@gmail.com
in the next 6 months or so. At the moment, we are planning to do it
without a buyer's agent - we've been studying our target neighborhood
for a while and have a pretty good idea of what different types of
houses sell for, don't need help with finding a mortgage broker (we've
been saving for several years, so we'll just buy the house for cash),
have a good inspector lined up (a family friend), etc. We are
fortunate to live in an area where the MLS is online, so we don't need
an agent to look at the listings.
My understanding is that if we buy a house without a buyer's agent,
the listing agent gets to collect the entire 6% commission (with our
target price, 6% amounts to $30-35K, not exactly pocket change).
We are thinking of trying to negotiate for either a rebate, or
reduction in price based on the fact that the listing agent won't have
to split the commission with the buyer's agent. It seems that the
listing agent would have every incentive to go for this - after all,
we could always turn around, get an agent, and the listing agent
would end up with only 3%. Yet we are not sure how to negotiate
the split, when to bring this up during the offer process, etc.
Our primary objective is to buy a nice house, not to antagonize
potential sellers and their agents :) But it seems that gifting an
extra 18K to the listing agent (or the buyer's agent, whose services
we don't really need) is an overkill. Any advice will be appreciated!
Natalie Munro
If you buy through a listing agent, you may be able to swing a rebate, but
bear in mind that the listing agent is working for the vendor.
Find a good buyer agent, be represented and have him/her negotiate on your
behalf. Save money the safe way.
texf...@gmail.com
> bear in mind that the listing agent is working for the vendor.
I may be a first-time home buyer, but I am not a complete idiot :)
I know that the listing agent is working for the seller.
My question was about negotiating tips - how do I "swing" a rebate
or a price reduction when the listing agent stands to make double
the usual commission. It seems like this should be a win-win
situation for everybody, but I am wondering about the tactics.
> Find a good buyer agent, be represented and have him/her negotiate on your
> behalf.
I intend to negotiate on my own behalf, and I am asking for useful
negotiating tips when dealing directly with the listing agent.
I am *not* asking whether I should use a buyer's agent (I am familiar
with the usual reasons, and they don't seem very convincing:
it's not entirely clear to me why I would need a third party
who is paid 3% of the sale price and whose economic interest is thus
directly opposite to mine).
Elle
> I intend to negotiate on my own behalf, and I am asking
> for useful
> negotiating tips when dealing directly with the listing
> agent.
As I contemplate a home sale and then purchase in the coming
year, I have thought about doing as you suggest.
First, as far as price negotiations are concerned, to heck
with "dealing directly with the listing agent." IMO the
negotiation process is between you and the seller, period.
Contingent on a lot of things, when purchasing my new home,
I thought I'd adjust my offer at the appropriate point in
time (probably with the first offer, and laying out my
reasoning for the offer), explicitly noting that the buying
and selling agent are one in the same, etc., so the agent
should be willing to reduce her/his take to move the
transaction along. I think one should be very direct in
negotiations. Of course, one should always have several
houses in mine as one starts negotiating, so one does not
feel trapped by a seller who is not serious or just won't
budge for whatever reason.
> I am *not* asking whether I should use a buyer's agent (I
> am familiar
> with the usual reasons, and they don't seem very
> convincing:
> it's not entirely clear to me why I would need a third
> party
> who is paid 3% of the sale price and whose economic
> interest is thus
> directly opposite to mine).
In theory, my understanding is that states that have "buying
agent" laws have contracts stating the agent is to work in
the buyer's interests, assisting in obtaining the best price
possible for him/her.
For a studious person, and with a neighborhood where
"comparable prices" are fairly established via public
resources, I too am not sure a second agent is necessary.
May I ask what is the address of the web site you're using
that has the MLS online?
I use www.realtor.com to get a general impression of MLS
listed housing in certain areas (or get a pulse on the
market in general). Based on a study of several areas in a
few states over several years, it seems sufficiently
accurate for a pretty good preliminary search. One drawback
of realtor.com is that current property taxes and any
homeowner association fees are very rarely given. OTOH, some
real estate agents have pretty extensive sites with public
search engines where I can get that kind of detail. A last
resort is to email or telephone the listing agent and ask
for the property taxes and HOA fees. When doing a
preliminary search, I hate bothering them when it's unlikely
I'll use them as an agent.
Rick Blaine
>My question was about negotiating tips - how do I "swing" a rebate
>or a price reduction when the listing agent stands to make double
>the usual commission. It seems like this should be a win-win
>situation for everybody, but I am wondering about the tactics.
You are unlikely to get a direct reduction in the commission. The agents union
won't allow it. :)
A more productive approach is to ask for a commensurate reduction in the house
price, or for the seller to pay for things that might usually be paid by the
buyer.
An alternate approach is to find someone to represent you as a buyers agent. You
do not have to disclose that they are kicking 95% of "their" commission back to
you.
tra...@optonline.net
I would stay away from adressing a cut in the commission directly.
What you really care about is the bottom line price you are paying for
the property. If you get to a point where the seller is at say $300K
and you are at $290K, then it could be appropriate to suggest that to
close the deal, the agent reduce their commission to 4%, which would
kick in ~$6K, and you would come up to ~$294K and see what happens.
Tony Sivori
[...]
> sufficiently accurate for a pretty good preliminary search. One drawback
> of realtor.com is that current property taxes and any homeowner
> association fees are very rarely given. OTOH, some real estate agents
> have pretty extensive sites with public search engines where I can get
> that kind of detail. A last resort is to email or telephone the listing
> agent and ask for the property taxes and HOA fees.
There may be county web sites that allow you to check the taxable value of
a property. For instance, this site will let me look up the taxable value
of any residential property in the city / county where I live.
http://www.pvalouky.org/propertyinfo/search.php
It also lists the owners, so you can spot a repo right away - a bank, HUD
or the VA will be listed as the owner. One drawback, there is a $29,000
exemption for those over 65 years of age, and another $29,000 for anyone
who is totally disabled. So depending on the age and disability of the
owner, the current taxable value may be substantially under the market
value.
Another worthwhile site that might have equivalents elsewhere lets you
look up any address to asses its flood risk. It is easy to find out if a
particular property is in the 100 year flood plain, 500 year flood plain,
or high and dry.
http://gis.fmsm.com/website/jefferson_ky/viewer.asp
There is a FEMA site that lets you do that nationally, but according to
FEMA, every address I have ever checked needs flood insurance. I can
understand their desire to spread the risk, but the results from this site
are ridiculous.
http://www.floodsmart.gov/floodsmart/pages/riskassesment/findpropertyform.jsp
--
Tony Sivori
Tony Sivori
> I intend to negotiate on my own behalf, and I am asking for useful
> negotiating tips when dealing directly with the listing agent. I am
> *not* asking whether I should use a buyer's agent (I am familiar with
> the usual reasons, and they don't seem very convincing: it's not
> entirely clear to me why I would need a third party who is paid 3% of
> the sale price and whose economic interest is thus directly opposite to
> mine).
I'd ask the listing agent to consider a 3% commission, with a 3% reduction
in the price of the house. (Actually, to get exactly the same commission,
you'd have to give the agent an extra .09% on top of the 3% since the
house would be selling for 3% less)
After all, that is what they would normally get when the buyer uses a
buyer's agent. If they don't agree, try 4%. If he (or she) refuses, let
them know that unless they accept 4%, they will get only 3% because you
will get a buyer's agent just so they won't get the full 6%.
Also, be aware that in some areas you can get buyers agents that will
rebate a major portion of the 3% buyers commission to you. Google Redfin.
Also read this New York Times Article, "The Last Stand of the
6-Percenters?".
http://www.nytimes.com/2006/09/03/business/yourmoney/03real.html?_r=1&oref=slogin
--
Tony Sivori
Elle
> Elle wrote:
> [...]
>> sufficiently accurate for a pretty good preliminary
>> search. One drawback
>> of realtor.com is that current property taxes and any
>> homeowner
>> association fees are very rarely given. OTOH, some real
>> estate agents
>> have pretty extensive sites with public search engines
>> where I can get
>> that kind of detail. A last resort is to email or
>> telephone the listing
>> agent and ask for the property taxes and HOA fees.
>
> There may be county web sites that allow you to check the
> taxable value of
> a property. For instance, this site will let me look up
> the taxable value
> of any residential property in the city / county where I
> live.
>
> http://www.pvalouky.org/propertyinfo/search.php
Thanks. That's worth googling on for the area at which I am
looking to move in the next year or so. Mill rates are not
too hard to find, but until I see hard numbers for certain
houses, I do not have much confidence.
> It also lists the owners, so you can spot a repo right
> away - a bank, HUD
> or the VA will be listed as the owner. One drawback, there
> is a $29,000
> exemption for those over 65 years of age, and another
> $29,000 for anyone
> who is totally disabled. So depending on the age and
> disability of the
> owner, the current taxable value may be substantially
> under the market
> value.
Understood.
I try to get a collection of homes of similar size and age
and generate current tax data on them, then take a ballpark
average. That's all I really need for a preliminary check of
the cost-of-living (also, the quality of the local
facilities to which my tax dollars go!)
Elle
> Also read this New York Times Article, "The Last Stand of
> the
> 6-Percenters?".
>
> http://www.nytimes.com/2006/09/03/business/yourmoney/03real.html?_r=1&oref=slogin
Fantastic article. Thanks for posting the link.
texf...@gmail.com
>> I intend to negotiate on my own behalf, and I am asking for useful
>> negotiating tips when dealing directly with the listing agent.
>
> First, as far as price negotiations are concerned, to heck
> with "dealing directly with the listing agent." IMO the
> negotiation process is between you and the seller, period.
Well, it seems to hard to exclude the listing agent from
the negotiations, and I don't really want to do this. The listing
agent is entitled to his/her commission. Because they don't
have to share the commission with the buyer's agent, however,
they ought to be more flexible on the price... methinks :)
It seems that you are suggesting explicitly laying out
this reasoning when making a lower offer, right?
> In theory, my understanding is that states that have "buying
> agent" laws have contracts stating the agent is to work in
> the buyer's interests, assisting in obtaining the best price
> possible for him/her.
I don't really put much trust into these laws because
I don't see how I could possibly enforce them with any given
agent. After all, the buyer's agent is still paid by the seller.
In all other situations I've seen where someone is
working on a percentage commission, their primary motivation
is to get the deal done quickly. The second motivation is
to do the deal at the top price because their compensation is
directly linked to it. It's possible that "buyer's agents" are
altruists who will work hard to reduce their own compensation
because some state law says they should, but I'd rather take
the risk and do the negotiating myself.
> May I ask what is the address of the web site you're using
> that has the MLS online?
We are using a site which is specific to our area
(www.austinhomesearch.com), so it's probably not much
help to you. Together with housealmanac.com and
zillow, it's giving us a pretty good idea of what comparable
houses have been listing and selling for.
texf...@gmail.com
> >My question was about negotiating tips - how do I "swing" a rebate
> >or a price reduction when the listing agent stands to make double
> >the usual commission. It seems like this should be a win-win
> >situation for everybody, but I am wondering about the tactics.
>
> You are unlikely to get a direct reduction in the commission. The agents union
> won't allow it. :)
Thanks, that's good to know.
> A more productive approach is to ask for a commensurate reduction in the house
> price, or for the seller to pay for things that might usually be paid by the
> buyer.
Makes sense, but presumably the seller would be motivated to do this
only if the cost is coming out of the agent's commission (more
precisely,
from the part that would normally go to a buyer's agent). In either
case, it seems like I'd have to make this explicit to the listing
agent.
> An alternate approach is to find someone to represent you as a buyers agent. You
> do not have to disclose that they are kicking 95% of "their" commission back to
> you.
I thought about this, like getting a friend with a real estate license
to
play a "buyer's agent" for us. I even thought of getting a real estate
license myself. I looked at the exam materials, and they seem very
straightforward, but this seems like a bit much for a simple house
purchase :)
Rick Blaine
>Makes sense, but presumably the seller would be motivated to do this
>only if the cost is coming out of the agent's commission (more
>precisely,
>from the part that would normally go to a buyer's agent). In either
>case, it seems like I'd have to make this explicit to the listing
>agent.
Don't know - The seller is in a better position to negotiate than you are, given
that he has the fiduciary relationship with the agent.
>
>> An alternate approach is to find someone to represent you as a buyers agent. You
>> do not have to disclose that they are kicking 95% of "their" commission back to
>> you.
>
>I thought about this, like getting a friend with a real estate license
>to
>play a "buyer's agent" for us. I even thought of getting a real estate
>license myself. I looked at the exam materials, and they seem very
>straightforward, but this seems like a bit much for a simple house
>purchase :)
If you get the license, there are usually some additional disclosures required.
Also, many states require that you work as an associate broker for a period of
time as well. Doesn't seem to make sense for a one off transaction.
texf...@gmail.com
> > I intend to negotiate on my own behalf, and I am asking for useful
> > negotiating tips when dealing directly with the listing agent.
>
> I'd ask the listing agent to consider a 3% commission, with a 3% reduction
> in the price of the house. [...] After all, that is what they would normally get
> when the buyer uses a buyer's agent. If they don't agree, try 4%. If he (or she)
> refuses, let them know that unless they accept 4%, they will get only 3%
> because you will get a buyer's agent just so they won't get the full 6%.
Thanks for the tip. Would you do this early on in the negotiation,
or only if there is a gap that could be covered by a reduced
commission (as suggested by another poster)?
> Also, be aware that in some areas you can get buyers agents that will
> rebate a major portion of the 3% buyers commission to you. Google Redfin.
Great idea. Most of them do not currently operate in Texas, but
it looks like ZipRealty is now active in our city (as of 10 days ago).
Their buyer's rebate is only 20%, though.
> Also read this New York Times Article, "The Last Stand of the
> 6-Percenters?".
I read it first thing this morning :) I didn't understand all of it.
For example, why would some listing agents refuse to take
offers from Redfin buyers? They'd still be getting the same
commission as they would with a conventional buyer's agent...
Elle
> Elle wrote:
>
>>> I intend to negotiate on my own behalf, and I am asking
>>> for useful
>>> negotiating tips when dealing directly with the listing
>>> agent.
>>
>> First, as far as price negotiations are concerned, to
>> heck
>> with "dealing directly with the listing agent." IMO the
>> negotiation process is between you and the seller,
>> period.
>
> Well, it seems to hard to exclude the listing agent from
> the negotiations,
I agree the agent is a conduit, but the final say is between
the buyer and seller. That's whaty I was trying to say,
anyway.
> and I don't really want to do this. The listing
> agent is entitled to his/her commission. Because they
> don't
> have to share the commission with the buyer's agent,
> however,
> they ought to be more flexible on the price... methinks :)
>
> It seems that you are suggesting explicitly laying out
> this reasoning when making a lower offer, right?
Yes, though I can understand the point of another poster who
said simply make your offer reflect the lower commission you
expect the agent to take.
The question to me is whether the seller knows it's okay to
negotiate this with the agent, or whether the agreement the
seller and agent have stipulates a lower commission.
>> In theory, my understanding is that states that have
>> "buying
>> agent" laws have contracts stating the agent is to work
>> in
>> the buyer's interests, assisting in obtaining the best
>> price
>> possible for him/her.
>
> I don't really put much trust into these laws because
> I don't see how I could possibly enforce them with any
> given
> agent. After all, the buyer's agent is still paid by the
> seller.
Understood. Media reports seem to back up the above and what
you say below.
> In all other situations I've seen where someone is
> working on a percentage commission, their primary
> motivation
> is to get the deal done quickly. The second motivation is
> to do the deal at the top price because their compensation
> is
> directly linked to it. It's possible that "buyer's
> agents" are
> altruists who will work hard to reduce their own
> compensation
> because some state law says they should, but I'd rather
> take
> the risk and do the negotiating myself.
>
>> May I ask what is the address of the web site you're
>> using
>> that has the MLS online?
>
> We are using a site which is specific to our area
> (www.austinhomesearch.com), so it's probably not much
> help to you. Together with housealmanac.com and
> zillow, it's giving us a pretty good idea of what
> comparable
> houses have been listing and selling for.
Okay.
Tony Sivori
> Tony Sivori wrote:
>>
>> I'd ask the listing agent to consider a 3% commission, with a 3%
>> reduction in the price of the house. [...] After all, that is what
>> they would normally get when the buyer uses a buyer's agent. If they
>> don't agree, try 4%. If he (or she) refuses, let them know that unless
>> they accept 4%, they will get only 3% because you will get a buyer's
>> agent just so they won't get the full 6%.
>
> Thanks for the tip. Would you do this early on in the negotiation, or
> only if there is a gap that could be covered by a reduced commission (as
> suggested by another poster)?
Consult an attorney on how late in the deal you can negotiate the
commission.
If possible, I'd get the price of the house set, then "oh, by the way" on
the commission. That way, you have nothing to lose but something to gain.
The home owner will get the sale, and will pocket the same amount. The
listing agent will get his / her 3 or 4%. You'll get the house for 2 or 3%
less. Everyone should be happy.
I intend to buy a house in the next two or three months, and the above is
exactly what I intend to do.
>> Also, be aware that in some areas you can get buyers agents that will
>> rebate a major portion of the 3% buyers commission to you. Google
>> Redfin.
>
> Great idea. Most of them do not currently operate in Texas, but it
> looks like ZipRealty is now active in our city (as of 10 days ago).
> Their buyer's rebate is only 20%, though.
>
>> Also read this New York Times Article, "The Last Stand of the
>> 6-Percenters?".
>
> I read it first thing this morning :) I didn't understand all of it.
> For example, why would some listing agents refuse to take offers from
> Redfin buyers? They'd still be getting the same commission as they
> would with a conventional buyer's agent...
The purpose of refusing to show houses to Redfin customers would be to
maintain the current 6% fee system. They would see anything less as a bad
precedent. Rightly so, from their point of view. For home owners and home
buyers, of course, the opposite is true.
--
Tony Sivori
tra...@optonline.net
texf...@gmail.com wrote:
> Tony Sivori wrote:
>
> > > I intend to negotiate on my own behalf, and I am asking for useful
> > > negotiating tips when dealing directly with the listing agent.
> >
> > I'd ask the listing agent to consider a 3% commission, with a 3% reduction
> > in the price of the house. [...] After all, that is what they would normally get
> > when the buyer uses a buyer's agent. If they don't agree, try 4%. If he (or she)
> > refuses, let them know that unless they accept 4%, they will get only 3%
> > because you will get a buyer's agent just so they won't get the full 6%.
>
> Thanks for the tip. Would you do this early on in the negotiation,
> or only if there is a gap that could be covered by a reduced
> commission (as suggested by another poster)?
This is beyond ridiculous. If I were either the seller or the agent
and you walked in to start discussing what commission the agent should
be getting early on in the negotiation, I'd tell you to get lost. Why
would anyone even consider this when no deal is at hand? What kind of
discussion do you expect to now take place between the seller and
agent, who have a signed agreement in place spelling out the
commission? You expect they should now start discussing cutting the
commission, when you have no deal about to happen?
The only valid issue you as buyer have is how much you are willing to
pay for the place period. If it comes down to the agent cutting their
commission by a percent or so to close the deal when the deal is at
hand and their cutting the commission can make it happen and they go
for it at that point, great. I've seen it happen. But I wouldn't
insult everyone by starting negotiations centered on the agents
commission.
tra...@optonline.net
Tony Sivori wrote:
> texflyer wrote:
>
> > Tony Sivori wrote:
> >>
> >> I'd ask the listing agent to consider a 3% commission, with a 3%
> >> reduction in the price of the house. [...] After all, that is what
> >> they would normally get when the buyer uses a buyer's agent. If they
> >> don't agree, try 4%. If he (or she) refuses, let them know that unless
> >> they accept 4%, they will get only 3% because you will get a buyer's
> >> agent just so they won't get the full 6%.
> >
> > Thanks for the tip. Would you do this early on in the negotiation, or
> > only if there is a gap that could be covered by a reduced commission (as
> > suggested by another poster)?
>
> Consult an attorney on how late in the deal you can negotiate the
> commission.
And now we have to get an attorney into it? You can discuss the
commission or anything else any damn time you want before signing the
contract.
>
> If possible, I'd get the price of the house set, then "oh, by the way" on
> the commission. That way, you have nothing to lose but something to gain.
> The home owner will get the sale, and will pocket the same amount. The
> listing agent will get his / her 3 or 4%. You'll get the house for 2 or 3%
> less. Everyone should be happy.
In reality, the price of the house is the only thing you are
negotiating. Once that is set and agreed to, why would the agent then
willingly give up half of their commission? The agent, who has a
signed agreement with the seller, isn't going to take 3% and just go
away. If I were the seller and you agreed to the price, then pulled
this crap of screweing the agent, I'd show you the door, because it's
negotiating in bad faith and I wouldn't want to find out what your
gonna try to pull next.
texf...@gmail.com
>>> I'd ask the listing agent to consider a 3% commission, with a 3% reduction
>>> in the price of the house. [...] After all, that is what they would normally get
>>> when the buyer uses a buyer's agent. If they don't agree, try 4%. If he (or she)
>>> refuses, let them know that unless they accept 4%, they will get only 3%
>>> because you will get a buyer's agent just so they won't get the full 6%.
>>
>> Thanks for the tip. Would you do this early on in the negotiation,
>> or only if there is a gap that could be covered by a reduced
>> commission (as suggested by another poster)?
>
> This is beyond ridiculous. If I were either the seller or the agent
> and you walked in to start discussing what commission the agent should
> be getting early on in the negotiation, I'd tell you to get lost. Why
> would anyone even consider this when no deal is at hand?
Please don't get mad, I am just asking questions. I am new to this
whole real estate thing, and I am here to learn from folks who know
more than me.
Of course, it's completely pointless to bring up commissions if there
is no prospect of the deal. I am talking about a situation where I am
prepared to make a realistic offer. Should I reduce this offer
by 2% or so, explaining to the listing agent that I expect the cut
to come out of the (non-existent) buyer's agent's portion of the
commission? Or should I instead make my "full-price" offer and then
go down the "oh, by the way..." route? I understand completely
that the commission is set in the contract between the seller and
the listing agent, but it seems that there's gotta be a way to
negotiate on the 3% that would normally go to a third party.
> The only valid issue you as buyer have is how much you are willing to
> pay for the place period.
And that's the only issue I have. At the end of the day, I only care
about the final amount I have to pay; I don't care whether 90%
of it is the listing agent's commission :)
> If it comes down to the agent cutting their
> commission by a percent or so to close the deal when the deal is at
> hand and their cutting the commission can make it happen and they go
> for it at that point, great. I've seen it happen.
How did it happen? Did the buyer or the seller suggest it?
> But I wouldn't
> insult everyone by starting negotiations centered on the agents
> commission.
I wouldn't imagine doing this. As I said, I want to find a house that
my family will be happy in, and pay a fair price for it. I am not
putting the cart before the horse.
texf...@gmail.com
>> If possible, I'd get the price of the house set, then "oh, by the way" on
>> the commission. That way, you have nothing to lose but something to gain.
>> The home owner will get the sale, and will pocket the same amount. The
>> listing agent will get his / her 3 or 4%. You'll get the house for 2 or 3%
>> less. Everyone should be happy.
>
> In reality, the price of the house is the only thing you are
> negotiating. Once that is set and agreed to, why would the agent then
> willingly give up half of their commission? The agent, who has a
> signed agreement with the seller, isn't going to take 3% and just go
> away.
I don't get it (sorry, I am new to this whole thing). In a normal
house buying transaction, where there are two agents involved,
the listing agent would get 3%. Why isn't he going to take 3%
in this scenario? In fact, it seems that he is getting 4% - a third
more than he usually would. The seller gets the same amount,
the buyer pays less, everybody should be happy, no?
> If I were the seller and you agreed to the price, then pulled
> this crap of screweing the agent, I'd show you the door
How is the agent getting screwed? He is paid even more
than usual!
Sorry if these questions sound stupid to you, I am trying
to work out the logic of all this.
Rick Blaine
>I read it first thing this morning :) I didn't understand all of it.
>For example, why would some listing agents refuse to take
>offers from Redfin buyers? They'd still be getting the same
>commission as they would with a conventional buyer's agent...
They're protecting the union. :(
Given the size and cost of most of the major real estage angency offices around
here, you can bet they'll fight tooth and nail to keep those 6% commisions. The
sad thing is, according to the NYT article, it isn't the agents that are keeping
all that money.
Rick Blaine
>How is the agent getting screwed? He is paid even more
>than usual!
Their game, their rules.
One of my trips to Vegas, I decided to try valet parking. Guy met me at the car,
unloaded the suitcases from the trunk and pointedly told me another person would
deliver the bags to my room.
Decided I wasn't going to tip someone for that and he could deal with whoever
delivered the bags if he wanted to split the tip.
When the bags were eventually delivered, one was missing. It eventually showed
up, but I got the message. A very cheap lesson that when you are dealing with
someone's livelyhood, you best play by their rules.
Rick Blaine
>Please don't get mad, I am just asking questions. I am new to this
>whole real estate thing, and I am here to learn from folks who know
>more than me.
Your questions are sounding a bit like the person who attends one of those
weekend "real estate can make you rich" seminars, then walks into a bank the
following Monday and tries to bluff the manager into selling a repo for a steal.
People who have some experience with real estate transactions may be able to
short circuit the process and save a few bucks. People who don't, make mistakes.
Some costly.
One of the advantages that your agent brings for his half of the commission is
negotiating experience. In your case, since you don't have any real estate
transaction experience, you might want to reconsider...
texf...@gmail.com
> Your questions are sounding a bit like the person who attends one of those
> weekend "real estate can make you rich" seminars, then walks into a bank the
> following Monday and tries to bluff the manager into selling a repo for a steal.
That's not where I am coming from at all. I am not looking for a
property to flip or to invest in or anything like that. Just trying to
see whether not using a buyer's agent might save us some money
when buying a house to live in, that's all.
> People who have some experience with real estate transactions may be able to
> short circuit the process and save a few bucks. People who don't, make mistakes.
> Some costly.
What's a costly mistake that could happen if we don't use a buyer's
agent? That's an honest question. As I mentioned, we've been closely
tracking listing and selling prices in the neighborhood we are
interested in, so we feel like we have a pretty decent idea of what's
a fair price for any given house. Inspection, appraisal, title
insurance, etc. all seem doable, too.
> One of the advantages that your agent brings for his half of the commission is
> negotiating experience. In your case, since you don't have any real estate
> transaction experience, you might want to reconsider...
It's true that we don't have any real estate transaction experience
in the US (we are not Americans by birth; in our country, things work
a little bit differently, but that's neither here, nor there). On the
other hand, I feel perfectly comfortable with negotiations, and paying
$15-18K to someone to negotiate on my behalf (especially when they
are paid *more* if they get me to pay more) seems like an overkill.
Maybe it's because most real estate agents I've seen around here -
some of them even recommended by friends - didn't look like amazing
negotiators.
Elle
> One of the advantages that your agent brings for his half
> of the commission is
> negotiating experience.
I do not know what your background is. But for the
assistance of the OP, my own meager experience with 3.5 home
transactions is that the agent offers virtually no help with
the actual back-and-forth of offers and counteroffers. In
fact, my impression is they will even obfuscate the meaning
of various transaction costs, dumping them on their client
if possible, to get the deal done.
Texflyer sounds like a pretty intelligent person. I don't
think Tony's approach (where the deal appears to be set,
then the buyer is to turn around and make further demands
via threatening to go get a buyer's agent) is wise, though.
Nor does it seem to me to make sense. The buyer has a nearly
completed contract with the seller, then snaps at the seller
that the deal is on hold until either the agent comes down
on commission or the buyer fetches a buyer's agent?
If I were the seller, I think I'd seriously consider letting
this buyer go.
Elle
> Given the size and cost of most of the major real estage
> angency offices around
> here, you can bet they'll fight tooth and nail to keep
> those 6% commisions. The
> sad thing is, according to the NYT article, it isn't the
> agents that are keeping
> all that money.
The good thing is that city attorney etc. offices are
increasingly bringing suit against Realtors for
anti-competitive practices.
The bubble's been generous to realtors and agents. They
should not be surprised that competition is increasing,
requiring that they adjust their attitudes and commissions.
Rick Blaine
>That's not where I am coming from at all. I am not looking for a
>property to flip or to invest in or anything like that. Just trying to
>see whether not using a buyer's agent might save us some money
>when buying a house to live in, that's all.
The point I was trying to make was that asking a few questions on Usenet will
not make you an expert in real estate transactions.
>
>What's a costly mistake that could happen if we don't use a buyer's
>agent? That's an honest question.
The best that could happen is that you will lose the house. It may be under
market price, the seller may be motivated, it may be the steal of a lifetime.
On the other hand, you've done your comps but you've pissed off the sellers
agent, who in turn has discouraged the seller from dealing with you, who in turn
ignores any bid that isn't exactly what he's listed for.
How does an agent discourage a seller from dealing with you? There's thousands
of ways starting with the "Oh, we know all about this guy. He talks a lot but
never closes the deal."
> As I mentioned, we've been closely
>tracking listing and selling prices in the neighborhood we are
>interested in, so we feel like we have a pretty decent idea of what's
>a fair price for any given house. Inspection, appraisal, title
>insurance, etc. all seem doable, too.
>
Great. You do know that your sources of comps will be trailing the market by 3-6
months, right? And that the rendering company 1/2 mile away is expanding? And
that the school district has decided to shut down that high school in the
neighborhood and turn it into a rehab center?
My point is that there is more to a home value than delayed comps and
transactions costs.
>It's true that we don't have any real estate transaction experience
>in the US (we are not Americans by birth; in our country, things work
>a little bit differently, but that's neither here, nor there).
I wouldn't be comfortable buying property in another country without someone
representing my interests. At the least, you ought to consider hiring a
competent real estate attorney. For less than $1 or $2K, you would have someone
looking out for you.
>On the
>other hand, I feel perfectly comfortable with negotiations, and paying
>$15-18K to someone to negotiate on my behalf (especially when they
>are paid *more* if they get me to pay more) seems like an overkill.
>Maybe it's because most real estate agents I've seen around here -
>some of them even recommended by friends - didn't look like amazing
>negotiators.
I understand that perfectly and agree with the sentiment. But you ought to be
able to find someone who can front for you for significantly less than that. You
can still call the strategy and of course have the final decision.
texf...@gmail.com
> The point I was trying to make was that asking a few questions on Usenet will
> not make you an expert in real estate transactions.
Agreed. I have no illusions about becoming a real estate expert.
I am simply asking for tips, experiences, and advice, and
yes, I realize they are worth as much as I paid for them :)
> On the other hand, you've done your comps but you've pissed off the sellers
> agent, who in turn has discouraged the seller from dealing with you, who in turn
> ignores any bid that isn't exactly what he's listed for.
Good point. I realize that I may piss off the seller's agent (even
though he'll be paid *more* - go figure). In a sense, that's what
I am asking about: is there any way of sharing the buyer's agent's
commission with the listing agent that would make everyone happy.
>> As I mentioned, we've been closely
>>tracking listing and selling prices in the neighborhood we are
>>interested in, so we feel like we have a pretty decent idea of what's
>>a fair price for any given house. Inspection, appraisal, title
>>insurance, etc. all seem doable, too.
>
> Great. You do know that your sources of comps will be trailing the market by 3-6
> months, right?
No, I don't think so. As I said, we are fortunate to live in an area
where the entire MLS is publicly accessible online. We see when
new listings appear, when prices are reduced, when they go
under contract, etc. This is not precise, of course (e.g., many
houses sell for less than the last listed price), but in combination
with other sources we feel that we are coming up with reasonable
comps.
> And that the rendering company 1/2 mile away is expanding? And
> that the school district has decided to shut down that high school in the
> neighborhood and turn it into a rehab center?
We've been renting in this neighborhood for 2 years. Yeah, we keep
track of things like that.
> I wouldn't be comfortable buying property in another country without someone
> representing my interests.
As I said before, nobody paid by the seller is *truly* representing
my interests unless they are Mother Theresa or something,
regardless of what some state law says.
I am responsible for representing my interests.
> At the least, you ought to consider hiring a
> competent real estate attorney. For less than $1 or $2K, you would have someone
> looking out for you.
Yes, we are definitely considering hiring a good
real estate lawyer to review the paperwork.
I appreciate your advice. Don't get me wrong, I am not looking
to scam a quick buck or screw some real estate agent out of
her living. It's just that I feel that we've already done
the vast majority of prep work and research that buyer's agents
usually do, and that they aren't going to help much with
offers and negotiations, anyway.
Tony Sivori
> Tony Sivori wrote:
>>
>> Consult an attorney on how late in the deal you can negotiate the
>> commission.
>
> And now we have to get an attorney into it?
Yes. I do consider it prudent to have an attorney representing my interest.
>> If possible, I'd get the price of the house set, then "oh, by the way"
>> on the commission. That way, you have nothing to lose but something to
>> gain. The home owner will get the sale, and will pocket the same
>> amount. The listing agent will get his / her 3 or 4%. You'll get the
>> house for 2 or 3% less. Everyone should be happy.
>
> In reality, the price of the house is the only thing you are
> negotiating.
I don't agree with that, but I see no need to argue the point.
> Once that is set and agreed to, why would the agent then willingly give
> up half of their commission? The agent, who has a signed agreement
> with the seller, isn't going to take 3% and just go away.
Why not? The agent was expecting 3% and the agent would get 3 or even 4%.
> If I were the seller and you agreed to the price, then pulled this crap
> of screweing the agent,
The agent is screwing you by eating 6% of the value of your house. That is
a lot of money for the service rendered. It is like a sales tax, but
unlike taxes, you can choose not to pay.
Why the sudden change of attitude? You were not so hot to pay 6% in
Message-ID: <1157303886.8...@e3g2000cwe.googlegroups.com>
> I'd show you the door, because it's negotiating in bad faith and I
> wouldn't want to find out what your gonna try to pull next.
Fine. I won't be buying your house.
--
Tony Sivori
SoCalMike
>
> Our primary objective is to buy a nice house, not to antagonize
> potential sellers and their agents :) But it seems that gifting an
> extra 18K to the listing agent (or the buyer's agent, whose services
> we don't really need) is an overkill. Any advice will be appreciated!
>
costco gave me a half percent kickback apon close of escrow because i
found my buying agent through them. better than nothing.
catalpa
<texf...@gmail.com> wrote in message
news:1157318385.7...@h48g2000cwc.googlegroups.com...
>
> Our primary objective is to buy a nice house, not to antagonize
> potential sellers and their agents :) But it seems that gifting an
> extra 18K to the listing agent (or the buyer's agent, whose services
> we don't really need) is an overkill. Any advice will be appreciated!
>
The listing agent won't give you a cent. You need to find a buyer's agent
that gives rebates.
texf...@gmail.com
>> Our primary objective is to buy a nice house, not to antagonize
>> potential sellers and their agents :) But it seems that gifting an
>> extra 18K to the listing agent (or the buyer's agent, whose services
>> we don't really need) is an overkill. Any advice will be appreciated!
>
> The listing agent won't give you a cent. You need to find a buyer's agent
> that gives rebates.
Yeah, this seems to be the consensus :( Oh well.
Kinda sucks to pay someone $15K for doing nothing,
but I guess that's how the system is set up.
I still don't understand why listing agents would rather
lose the deal than rebate even a single cent of
the buyer's agent's commission (which they won't
receive anyway with any other buyer),
but there are lots of things I don't understand :)
Anthony Matonak
> catalpa wrote:
>
>>>Our primary objective is to buy a nice house, not to antagonize
>>>potential sellers and their agents :) But it seems that gifting an
>>>extra 18K to the listing agent (or the buyer's agent, whose services
>>>we don't really need) is an overkill. Any advice will be appreciated!
>>
>>The listing agent won't give you a cent. You need to find a buyer's agent
>>that gives rebates.
>
> Yeah, this seems to be the consensus :( Oh well.
> Kinda sucks to pay someone $15K for doing nothing,
> but I guess that's how the system is set up.
You don't have to pay someone $15K for doing nothing.
Everything in a real estate deal is negotiable. You
can ask the listing agent to lower the price $15K or
you can find a buyers agent that is willing to work
for a fixed fee and they give you the rest of the
commission.
> I still don't understand why listing agents would rather
> lose the deal than rebate even a single cent of
> the buyer's agent's commission (which they won't
> receive anyway with any other buyer),
> but there are lots of things I don't understand :)
An agent would rather sell to someone who is willing
to pay more money than to sell to someone who wants
to nickel and dime the transaction. There is always
another buyer out there.
Anthony
tra...@optonline.net
Anthony Matonak wrote:
> texf...@gmail.com wrote:
> > catalpa wrote:
> >
> >>>Our primary objective is to buy a nice house, not to antagonize
> >>>potential sellers and their agents :) But it seems that gifting an
> >>>extra 18K to the listing agent (or the buyer's agent, whose services
> >>>we don't really need) is an overkill. Any advice will be appreciated!
> >>
> >>The listing agent won't give you a cent. You need to find a buyer's agent
> >>that gives rebates.
> >
> > Yeah, this seems to be the consensus :( Oh well.
> > Kinda sucks to pay someone $15K for doing nothing,
> > but I guess that's how the system is set up.
>
> You don't have to pay someone $15K for doing nothing.
>
> Everything in a real estate deal is negotiable. You
> can ask the listing agent to lower the price $15K or
> you can find a buyers agent that is willing to work
> for a fixed fee and they give you the rest of the
> commission.
>
> > I still don't understand why listing agents would rather
> > lose the deal than rebate even a single cent of
> > the buyer's agent's commission (which they won't
> > receive anyway with any other buyer),
> > but there are lots of things I don't understand :)
I now have to agree with the posters who recommend you use a buyers's
agent, because you obviously still don't get it. I told you many
posts ago exactly how you can likely get some concession on the part of
the listing agent in the circumstances you described. And that's by
presenting yourself as a serious buyer, ready to close the deal now at
the right price. If the seller wants 300K and you are at 290K with no
other agent involved, it's not unreasonable or unusual for the listing
agent to then cut their take by 1 or 2% to make the deal happen. If
they cut it by say 1.5%, that's ~$4500. Maybe the seller comes down by
$2750 and you come up by $2750. In many cases, the agent is the one
to suggest the idea, because they would rather have 4% of a sure deal
now, than MAYBE 6% of some future deal after months more work.
But you don't get there by starting the negotiations with suggesting
the realtor cut their commission. And you don't get there by
listening to some of the unethical advice here, like agreeing on the
sale price, then saying "Oh, BTW, now I think you, the listing agent,
should cut your commission deal that you have with the seller and give
it to me."
You have to stop thinking about who gets what and start thinking about
what the right price is for the house. If I'm buying a property, at
the end of the day, all I care about is that I got a good deal. I
don't really care if the seller gives the listing agent 2% or 6%, or if
they give half the money to their ex wife, for that matter. But I
would use the fact that no other agent is involved to my negotiating
advantage.
I've negotiated $50M deals between Fortune 100 companies and I can tell
you that if you follow some of the advice here, all you are going to do
is piss off everyone.
tra...@optonline.net
texf...@gmail.com wrote:
> tra...@optonline.net wrote:
>
> >> If possible, I'd get the price of the house set, then "oh, by the way" on
> >> the commission. That way, you have nothing to lose but something to gain.
> >> The home owner will get the sale, and will pocket the same amount. The
> >> listing agent will get his / her 3 or 4%. You'll get the house for 2 or 3%
> >> less. Everyone should be happy.
> >
> > In reality, the price of the house is the only thing you are
> > negotiating. Once that is set and agreed to, why would the agent then
> > willingly give up half of their commission? The agent, who has a
> > signed agreement with the seller, isn't going to take 3% and just go
> > away.
>
> I don't get it (sorry, I am new to this whole thing). In a normal
> house buying transaction, where there are two agents involved,
> the listing agent would get 3%. Why isn't he going to take 3%
> in this scenario? In fact, it seems that he is getting 4% - a third
> more than he usually would. The seller gets the same amount,
> the buyer pays less, everybody should be happy, no?
Because to agree on the price of the house and then turn around and say
"OK, now Mr Listing Agent, I want you to cut your commission in half
and give it to me" is unethical and will surely piss off the real
estate agent. And as seller, if I had any other buyers around at close
to your price, I'd move on to them, because I wouldn't want to find out
what you're gonna pull next. People who would do this are the type to
tie a seller up for months, bring in some inspector who is gonna want
all kinds of normal wear/tear items in a 20 yr old house made new,
demand more concessions, etc.
>
> > If I were the seller and you agreed to the price, then pulled
> > this crap of screweing the agent, I'd show you the door
>
> How is the agent getting screwed? He is paid even more
> than usual!
By having this pulled on him at the last minute, after the price of the
house is set.
He's not being paid more than was agreed to the whole time this deal
was being negotiated. He's now being told, when he thinks negotiating
is over and the deal is done, that you want him to cut his commission
in half.
And BTW, you really are going back on what you agreed to. You set the
price of the house at X. Now, if you get your way, the deal is
changed so the price of the house becomes X minus part of the agents
commission.
tra...@optonline.net
Tony Sivori wrote:
> trader4 wrote:
>
> > Tony Sivori wrote:
> >>
> >> Consult an attorney on how late in the deal you can negotiate the
> >> commission.
> >
> > And now we have to get an attorney into it?
>
> Yes. I do consider it prudent to have an attorney representing my interest.
The point is that anyone with real estate experience knows they don't
need an attorney to tell them this. They can negotiate it at any
point, all they want, till the cows come home, until you have a
contract signed by both parties.
>
> >> If possible, I'd get the price of the house set, then "oh, by the way"
> >> on the commission. That way, you have nothing to lose but something to
> >> gain. The home owner will get the sale, and will pocket the same
> >> amount. The listing agent will get his / her 3 or 4%. You'll get the
> >> house for 2 or 3% less. Everyone should be happy.
> >
> > In reality, the price of the house is the only thing you are
> > negotiating.
>
> I don't agree with that, but I see no need to argue the point.
>
> > Once that is set and agreed to, why would the agent then willingly give
> > up half of their commission? The agent, who has a signed agreement
> > with the seller, isn't going to take 3% and just go away.
>
> Why not? The agent was expecting 3% and the agent would get 3 or even 4%.
Because what you did was unethical and will piss off the realtor. How
would you like it if you were party to a deal among several parties and
were to receive X and after the price is negotiated and agreed, I come
to you and say "OH, BTW, I think you should cut your take by $5K and
give it to me?"
>
> > If I were the seller and you agreed to the price, then pulled this crap
> > of screweing the agent,
>
> The agent is screwing you by eating 6% of the value of your house. That is
> a lot of money for the service rendered. It is like a sales tax, but
> unlike taxes, you can choose not to pay.
No. No one put a gun to the head of the seller and said they had to
list with that agent at 6%. They did it of their own free will. As
buyer, you are not even a party to that agreement. Which is why the
buyer should be focusing on getting the house at the right price, not
who gets what out of the deal.
Now, I agree that 6% of a $500K house is a lot of money. And in many
cases, realtors don't come close to deserving it. But that doesn't
mean that trying to get the agent to cut their commission after
agreeing to a price is ethical, wise, or will likely work. With the
proper negotiating approach, you may be able to get the lising agent to
lower their take, but this sure aint' the way to do it.
>
> Why the sudden change of attitude? You were not so hot to pay 6% in
> Message-ID: <1157303886.8...@e3g2000cwe.googlegroups.com>
>
> > I'd show you the door, because it's negotiating in bad faith and I
> > wouldn't want to find out what your gonna try to pull next.
>
> Fine. I won't be buying your house.
Excellent! We're both happy!
>
> --
> Tony Sivori
Elle
> trader4 wrote:
>> Once that is set and agreed to, why would the agent then
>> willingly give
>> up half of their commission? The agent, who has a
>> signed agreement
>> with the seller, isn't going to take 3% and just go away.
>
> Why not? The agent was expecting 3% and the agent would
> get 3 or even 4%.
Arguably s/he was expecting 6% (or possibly, per the
agreement with the seller, a reduced 5% if she acted as
buying and selling agent).
Aside: I completely reject another poster's statements about
how asking a few questions on Usenet about real estate
negotiating is not going to make the asker an expert. This
statement should have been mightily qualified with something
like, "But one can learn a lot by asking questions. Fact is
the only stupid question is an unasked one." I can't imagine
any (non real estate agent trained) seller acquiring
expertise in real estate without asking questions and often
drawing on others' experience. Another reality is that
agents do not, in my experience and estimation, give
significant advice on the numbers to present when
negotiating a price. Also, I think the truth is this
discussion with the OP has been very fruitful.
I wonder if the poster who seemed to be saying to the OP
that she would never acquire the necessary expertise to
negotiate well by asking questions is in fact a real estate
agent (or otherwise connected to one) and so inclined to
discourage consumers from becoming educated on real estate
negotiations.
Usenet is one of many online fora that represents the
ultimate marketplace of ideas. It has been a boon to
consumers, increasing competition and lowering prices in
many areas. Tony's NY Times article is further proof of
this. Always ask questions about financial transactions. The
OP is doing right.
Doug Miller
[...]
>
>My understanding is that if we buy a house without a buyer's agent,
>the listing agent gets to collect the entire 6% commission (with our
>target price, 6% amounts to $30-35K, not exactly pocket change).
>We are thinking of trying to negotiate for either a rebate, or
>reduction in price based on the fact that the listing agent won't have
>to split the commission with the buyer's agent. It seems that the
>listing agent would have every incentive to go for this - after all,
>we could always turn around, get an agent, and the listing agent
>would end up with only 3%. Yet we are not sure how to negotiate
>the split, when to bring this up during the offer process, etc.
You don't negotiate that. The listing agent is working for, and paid by, the
seller. Not you. You are not a party to the contract between the seller and
the listing agent.
You find a house that you like, offer what you think is a fair price for it,
and let the seller and the listing agent figure out how much the agent should
get. It's none of your concern.
--
Regards,
Doug Miller (alphageek at milmac dot com)
It's time to throw all their damned tea in the harbor again.
Doug Miller
>> If you buy through a listing agent, you may be able to swing a rebate, but
>> bear in mind that the listing agent is working for the vendor.
>
>I may be a first-time home buyer, but I am not a complete idiot :)
>I know that the listing agent is working for the seller.
>My question was about negotiating tips - how do I "swing" a rebate
>or a price reduction when the listing agent stands to make double
>the usual commission. It seems like this should be a win-win
>situation for everybody, but I am wondering about the tactics.
How do you figure it's a "win-win" for the agent? What incentive does the
agent have to reduce his own commission?
Doug Miller
>texflyer wrote:
>Consult an attorney on how late in the deal you can negotiate the
>commission.
Hellooooooo! The *buyer* can't negotiate the listing agent's commission at any
point in the deal. The listing agent's commission is specified by a contract
between the listing agent and the *seller*.
>
>If possible, I'd get the price of the house set, then "oh, by the way" on
>the commission. That way, you have nothing to lose but something to gain.
>The home owner will get the sale, and will pocket the same amount. The
>listing agent will get his / her 3 or 4%. You'll get the house for 2 or 3%
>less. Everyone should be happy.
And if I were the seller, I'd tell you to go pound sand. You've already signed
a purchase offer at a specific price, I've accepted it, and that's the price
at which you're going to buy the house. If I negotiate any reduction in the
listing agent's commission, then *I* keep that money, not you.
>
>I intend to buy a house in the next two or three months, and the above is
>exactly what I intend to do.
Let us know how that works out for you, ok?
Doug Miller
>
>I don't get it (sorry, I am new to this whole thing). In a normal
>house buying transaction, where there are two agents involved,
>the listing agent would get 3%. Why isn't he going to take 3%
>in this scenario?
Because he signed a contract with the seller that entitles him to 6%.
> In fact, it seems that he is getting 4% - a third
>more than he usually would. The seller gets the same amount,
>the buyer pays less, everybody should be happy, no?
No. The agent gets only 4% instead of the 6% specificed in his contract, and
you think he should be happy???
>
>> If I were the seller and you agreed to the price, then pulled
>> this crap of screweing the agent, I'd show you the door
>
>How is the agent getting screwed? He is paid even more
>than usual!
He's getting paid less than his contract with the seller entitles him to.
>
>Sorry if these questions sound stupid to you, I am trying
>to work out the logic of all this.
The logic is that the agent's commission is determined by the contract between
him and the *seller*. You as buyer are not a party to this contract, and are
not in a position to alter its terms.
Doug Miller
>
>Of course, it's completely pointless to bring up commissions if there
>is no prospect of the deal. I am talking about a situation where I am
>prepared to make a realistic offer. Should I reduce this offer
>by 2% or so, explaining to the listing agent that I expect the cut
>to come out of the (non-existent) buyer's agent's portion of the
>commission? Or should I instead make my "full-price" offer and then
>go down the "oh, by the way..." route? I understand completely
>that the commission is set in the contract between the seller and
>the listing agent, but it seems that there's gotta be a way to
>negotiate on the 3% that would normally go to a third party.
Apparently, you actually *don't* "understand completely" that the commission
is set in the listing contract.
You are not a party to that contract.
You are not able to negotiate its terms.
Any such negotiations that might take place do not involve you.
>
>> The only valid issue you as buyer have is how much you are willing to
>> pay for the place period.
>
>And that's the only issue I have. At the end of the day, I only care
>about the final amount I have to pay; I don't care whether 90%
>of it is the listing agent's commission :)
Nonsense. The entire thread to this point has been about the fact that you
*do* care how much of the selling price is the agent's commission, and your
desire to reduce that share so as to reduce the selling price.
Natalie Munro
>
> I wonder if the poster who seemed to be saying to the OP
> that she would never acquire the necessary expertise to
> negotiate well by asking questions is in fact a real estate
> agent (or otherwise connected to one) and so inclined to
> discourage consumers from becoming educated on real estate
> negotiations.
You're paranoid.
Real estate agents are in one of many industries where you're not just
paid for what you do, you're paid for what you know.
Registration as a real estate agent where I am is contingent on the
initial education and continuing education. I attend many courses to keep
my license and I attend others on my own to keep my knowledge sharp and
current so that when someone does ask me a question, I have an answer and
when I'm in a negotiation, I have all the facts.
Somewhere in this long string of responses, someone said that there is
more to negotiating than just a price. A real estate agent should have
the knowledge to identify the factors and negotiate accordingly.
A private buyer can ask questions and give it a try, and maybe do ok.
It's a case of how much risk a person is willing to take on.
Doug Miller
>What's a costly mistake that could happen if we don't use a buyer's
>agent? That's an honest question.
Paying too much for the house.
> As I mentioned, we've been closely
>tracking listing and selling prices in the neighborhood we are
>interested in, so we feel like we have a pretty decent idea of what's
>a fair price for any given house. Inspection, appraisal, title
>insurance, etc. all seem doable, too.
Do you *really* think you have a better idea of home values than the real
estate agents who deal with that stuff, day in and day out, for years?
>
>> One of the advantages that your agent brings for his half of the commission
> is
>> negotiating experience. In your case, since you don't have any real estate
>> transaction experience, you might want to reconsider...
>
>It's true that we don't have any real estate transaction experience
>in the US (we are not Americans by birth; in our country, things work
>a little bit differently, but that's neither here, nor there). On the
>other hand, I feel perfectly comfortable with negotiations, and paying
>$15-18K to someone to negotiate on my behalf (especially when they
>are paid *more* if they get me to pay more) seems like an overkill.
That's not the way a buyer's agent works. As a buyer working with a buyer's
agent, you have a contract with that agent which obligates him to represent
*your* interests -- which includes getting the house you want at the lowest
price possible.
Lou
> in the next 6 months or so. At the moment, we are planning to do it
> without a buyer's agent - we've been studying our target neighborhood
> for a while and have a pretty good idea of what different types of
> houses sell for, don't need help with finding a mortgage broker (we've
> been saving for several years, so we'll just buy the house for cash),
> have a good inspector lined up (a family friend), etc. We are
> fortunate to live in an area where the MLS is online, so we don't need
> an agent to look at the listings.
>
> My understanding is that if we buy a house without a buyer's agent,
> the listing agent gets to collect the entire 6% commission (with our
> target price, 6% amounts to $30-35K, not exactly pocket change).
> We are thinking of trying to negotiate for either a rebate, or
> reduction in price based on the fact that the listing agent won't have
> to split the commission with the buyer's agent. It seems that the
> listing agent would have every incentive to go for this - after all,
> we could always turn around, get an agent, and the listing agent
> would end up with only 3%. Yet we are not sure how to negotiate
> the split, when to bring this up during the offer process, etc.
>
> potential sellers and their agents :) But it seems that gifting an
> extra 18K to the listing agent (or the buyer's agent, whose services
> we don't really need) is an overkill. Any advice will be appreciated!
>
I live in New Jersey. Around here, house prices generally are set by the
market. Some people sell their houses themselves, some (most) sellers use
an agent. Listing agents certainly advise sellers as to what a house is
worth, and of course they (and the seller) want to get as much as they can,
but if the price is set too high a house just sits there without being sold,
and eventually the seller ends up reducing the price.
In any case, the seller pays the commission to the listing agent, and the
price is pretty much independent of whether the seller uses an agent or not.
What difference does it make to you what the seller does with the money?
Doug Miller
>I still don't understand why listing agents would rather
>lose the deal than rebate even a single cent of
>the buyer's agent's commission
Because you're not the only person in the world who's willing to buy that
house.
>(which they won't
>receive anyway with any other buyer),
What, you think you're the only guy who's ever gone househunting without
having a buyer's agent?
Rick Blaine
>
>I wonder if the poster who seemed to be saying to the OP
>that she would never acquire the necessary expertise to
>negotiate well by asking questions is in fact a real estate
>agent (or otherwise connected to one) and so inclined to
>discourage consumers from becoming educated on real estate
>negotiations.
I think you mininterpreted my post - assuming it was me you were refering to -
as I never said never. :)
Usenet is a great place to ask questions and a great place to learn. What I and
several others were reacting to was a sense that the questioner was going beyond
just trying to get educated.
I was getting the feeling that the OP was looking for the magic words that would
cause the listing agent to automatically give up 1/2 of the full commision on a
real estate sale, just because the OP was representing himself.
What myself and others were trying to explain is that for a number of reasons,
that wasn't going to happen and we offered alternatives that would get the OP
the same end result.
Rick Blaine
>Title companies are very willing to help you make sure
>you're filling things out correctly but don't use the one recommended
>by the selling agent.
I would qualify this statement slightly and say that _some_ title companies are
willing to help with FSBOs.
Around here, title fees are regulated by the state and thus all title companies
charge the same. The large title companies in town won't do anything to
jepordize the majority of their business which comes from real estate agents by
dealing with a FSBO. The smaller title companies will.
texf...@gmail.com
> I was getting the feeling that the OP was looking for the magic words that would
> cause the listing agent to automatically give up 1/2 of the full commision on a
> real estate sale, just because the OP was representing himself.
No, I am not looking for a magic bullet; sorry if you got that
impression. Just trying to get a better idea of how
the system works.
> What myself and others were trying to explain is that for a number of reasons,
> that wasn't going to happen and we offered alternatives that would get the OP
> the same end result.
And I appreciate this advice.
Elle
> "Elle" (elle_n...@earthlink.net) writes:
>>
>> I wonder if the poster who seemed to be saying to the OP
>> that she would never acquire the necessary expertise to
>> negotiate well by asking questions is in fact a real
>> estate
>> agent (or otherwise connected to one) and so inclined to
>> discourage consumers from becoming educated on real
>> estate
>> negotiations.
>
> You're paranoid.
You're a real estate agent. :-)
Elle
> Do you *really* think you have a better idea of home
> values than the real > estate agents who deal with that
> stuff, day in and day out, for years?
Do you really think all agents are interested in full
disclosure of this information, or are they more interested
in a quick sale, and so hesitant to disclose anything that
would slow down a sale?
Read Tony's NY Times article dated yesterday, indicating
realtors, for one, do not always act in sellers' interests,
and a seller and buyer do have to play hard ball with them.
I think it best to think of agents as no better than car
salespeople.
texf...@gmail.com
> If the seller wants 300K and you are at 290K with no
> other agent involved, it's not unreasonable or unusual for the listing
> agent to then cut their take by 1 or 2% to make the deal happen. If
> they cut it by say 1.5%, that's ~$4500. Maybe the seller comes down by
> $2750 and you come up by $2750. In many cases, the agent is the one
> to suggest the idea, because they would rather have 4% of a sure deal
> now, than MAYBE 6% of some future deal after months more work.
Makes sense.
> But you don't get there by starting the negotiations with suggesting
> the realtor cut their commission.
I didn't propose starting the negotiations with suggesting the
realtor cut their commission - it was another poster.
I was simply asking whether this is a good idea or not,
and I can certainly see why it might not be.
> And you don't get there by
> listening to some of the unethical advice here, like agreeing on the
> sale price, then saying "Oh, BTW, now I think you, the listing agent,
> should cut your commission deal that you have with the seller and give
> it to me."
Okay, then I won't listen to this advice.
> You have to stop thinking about who gets what and start thinking about
> what the right price is for the house.
And that's the only thing I am thinking about, but I suspect
that the final price might be lower if there is only one
middleman involved, thus my questions. What you
are suggesting makes perfect sense, by the way.
Elle
texf...@gmail.com
>> As I mentioned, we've been closely
>>tracking listing and selling prices in the neighborhood we are
>>interested in, so we feel like we have a pretty decent idea of what's
>>a fair price for any given house. Inspection, appraisal, title
>>insurance, etc. all seem doable, too.
>
> Do you *really* think you have a better idea of home values than the real
> estate agents who deal with that stuff, day in and day out, for years?
The real estate agent might have a better idea of home values
(although I am not even sure of that), but his/her economic
interest is directly opposite to mine. If the market
is dropping, will the agent encourage me to wait another
6 months while she is paid nothing? She gets paid more the
more I pay. If I am prepared to offer $10K more than the house
is worth, the agent might stop me... or might not - that's
just extra $300 in profit for the agent.
> That's not the way a buyer's agent works. As a buyer working with a buyer's
> agent, you have a contract with that agent which obligates him to represent
> *your* interests -- which includes getting the house you want at the lowest
> price possible.
How would I enforce this contract? The agent is still paid by
the seller in proportion to the price. I can't read people's minds,
I don't know whose interests they have deep in their hearts when
they urge me to finish the deal quickly.
It may upset you that I distrust real estate agents, but in
every other walk of life where I've encountered people who
work on commission, their #1 priority was to do the deal
quickly, not to minimize the amount of money they are paid.
texf...@gmail.com
>> My understanding is that if we buy a house without a buyer's agent,
>> the listing agent gets to collect the entire 6% commission (with our
>> target price, 6% amounts to $30-35K, not exactly pocket change).
>> We are thinking of trying to negotiate for either a rebate, or
>> reduction in price based on the fact that the listing agent won't have
>> to split the commission with the buyer's agent. It seems that the
>> listing agent would have every incentive to go for this - after all,
>> we could always turn around, get an agent, and the listing agent
>> would end up with only 3%. Yet we are not sure how to negotiate
>> the split, when to bring this up during the offer process, etc.
>
> I don't get it - are things that different in Texas?
I don't think there are many differences between Texas
and New Jersey. It's relatively unusual for an attorney
to be involved in TX, and there is a survey done almost
every time, but other than that, it's pretty much the same
from what I can tell.
> I live in New Jersey. Around here, house prices generally are set by the
> market. Some people sell their houses themselves, some (most) sellers use
> an agent. Listing agents certainly advise sellers as to what a house is
> worth, and of course they (and the seller) want to get as much as they can,
> but if the price is set too high a house just sits there without being sold,
> and eventually the seller ends up reducing the price.
Yep, that's pretty much how it works here. That said, it's
conceivable that when faced with two offers - say, $500K from
someone who has a buyer's agent and $495K from someone
who doesn't - the seller and his agent would go for the latter
because everybody would get paid more, isn't it?
(And no, I am not talking about dropping the offer by $5K
after the contract is signed).
> In any case, the seller pays the commission to the listing agent, and the
> price is pretty much independent of whether the seller uses an agent or not.
> What difference does it make to you what the seller does with the money?
Doesn't make any difference to me. As I said before,
the seller can pay 90% of the price to the listing
agent, it's all the same to me.
texf...@gmail.com
>>I understand completely
>>that the commission is set in the contract between the seller and
>>the listing agent, but it seems that there's gotta be a way to
>>negotiate on the 3% that would normally go to a third party.
>
> Apparently, you actually *don't* "understand completely" that the commission
> is set in the listing contract.
> You are not a party to that contract.
> You are not able to negotiate its terms.
I am not proposing to negotiate the terms of the contract between
the seller and the listing agent. I am guessing that there might
be more flexibility in the selling price when there is a single
middleman involved (who stands who receive much more than
his usual commission) instead of two middlemen.
> Nonsense. The entire thread to this point has been about the fact that you
> *do* care how much of the selling price is the agent's commission, and your
> desire to reduce that share so as to reduce the selling price.
Then you haven't been reading the same thread. I said explicitly
that I don't care if 90% of the price goes to the listing agent.
All I care about is the selling price, and my hope is that the
selling price might be lower if, instead of two 3% middlemen,
there is only one. Apparently, this is not as ridiculous an idea
as you seem to think.
Elle
> Also read this New York Times Article, "The Last Stand of
> the
> 6-Percenters?".
[Look back for link]
More citations on this point:
"Some States Now Limit Price Rebates to Buyers," Wall Street
Journal, Aug. 12, 2005. Excerpt:
---
Why are Governors and state legislatures enacting
regulations to make buying and selling homes as expensive as
possible?
We ask this question because in recent weeks three normally
level-headed Republican Governors -- Matt Blunt of Missouri,
Rick Perry of Texas and Bob Riley of Alabama -- have signed
into law legislation that protects Realtors from discount
competitors.
About a dozen other states have also buckled to the National
Association of Realtors lobby. They've effectively become
partners in what looks suspiciously like a price-fixing
scheme, whereby discounters are prevented by law from
charging fees below the industry norm of 5% to 6% of the
home sales price.
http://homes.wsj.com/buysell/agentsandbrokers/20050819-wsj.html
---
"Real-Estate Brokers Step Up Rebates to Home Buyers," April,
2006,
http://www.realestatejournal.com/buysell/markettrends/20060406-hagerty.html
texf...@gmail.com
>>My question was about negotiating tips - how do I "swing" a rebate
>>or a price reduction when the listing agent stands to make double
>>the usual commission. It seems like this should be a win-win
>>situation for everybody, but I am wondering about the tactics.
>
> How do you figure it's a "win-win" for the agent? What incentive does the
> agent have to reduce his own commission?
Because he is not reducing his own commission. Normally,
he would expect to receive 6% of the selling price, of which
he would give half to the buyer's agent. Now, in the absence
of the buyer's agent, he stands to receive more than half
of 6% (to be split with his broker, of course, etc. etc.)
How is this not a win for the agent?
I am not really trying to get into the semantics of who is
technically paying whom. It's too bad this thread has taken
this turn. My basic question is whether the selling price
of the house might be lower if the buyer doesn't have
an agent. You are absolutely right that I shouldn't care
how this lower price is worked out between the seller
and the listing agent, and I don't care.
texf...@gmail.com
> You find a house that you like, offer what you think is a fair price for it,
> and let the seller and the listing agent figure out how much the agent should
> get. It's none of your concern.
This is starting to sound just like buying a car. Why do you care
what the invoice is? Holdback? None of your concern, that's
between the dealer and the manufacturer. Find a car that you
like and offer what you think is a fair price for it.
You are right, Doug, I don't care how the seller and the listing
agent split the money. I just don't want to pay more for the
house than I should. You seem to think that not having
a buyer's agent will not result in a lower price. Other folks
seem to think that it might (in some circumstances). And
I am grateful for all y'all's advice. I really mean it, too.
Elle
Tony wrote
>> Also, be aware that in some areas you can get buyers
>> agents that will
>> rebate a major portion of the 3% buyers commission to
>> you. Google Redfin.
>
> Great idea. Most of them do not currently operate in
> Texas, but
> it looks like ZipRealty is now active in our city (as of
> 10 days ago).
> Their buyer's rebate is only 20%, though.
Maybe you saw this already, but for the archives: Increase
that rebate in Texas (effectively, 0.6% of a home bought
with ZipRealty, where the buyer's agent gets 3% of the total
commission) to at least 1% using
http://www.texasdiscountrealty.com/buyers1.htm
Here's an Austin real estate agent in Texas who offers 2% of
the sales price back:
http://www.nicolepeel.com/buyerrebate.php
The U.S. Department of Justice has successfully sued real
estate commissions in several states for limiting or
prohibiting such rebates. But evidently when a state
legislature passes a law with such limits, it's not as
clearcut. I am researching why.
Jeanne
Then you're going about it the wrong way. Given that the seller and the
seller agent set the commission and you have no say (or interest) in how
they split it except that some will go to a buyer agent, then look for
FSBOs. No agents at all. Voila no commissions. Hence, lower prices.
texf...@gmail.com
> Given that the seller and the
> seller agent set the commission and you have no say (or interest) in how
> they split it except that some will go to a buyer agent, then look for
> FSBOs. No agents at all. Voila no commissions. Hence, lower prices.
Well, around here relatively few houses are FSBO, and they seem
overpriced to start with :) As I said, I have no problem with
the listing agent receiving his customary commission, or whatever
else they arranged with the seller.
Anyway, it does seem that finding a buyer's agent who'll rebate
part of his commission provided we do our own househunting
is our best bet.
texf...@gmail.com
> Maybe you saw this already, but for the archives: Increase
> that rebate in Texas (effectively, 0.6% of a home bought
> with ZipRealty, where the buyer's agent gets 3% of the total
> commission) to at least 1% using
> http://www.texasdiscountrealty.com/buyers1.htm
>
> Here's an Austin real estate agent in Texas who offers 2% of
> the sales price back:
> http://www.nicolepeel.com/buyerrebate.php
Thanks for the tips!
Vic Smith
>tra...@optonline.net wrote:
>
>
>And that's the only thing I am thinking about, but I suspect
>that the final price might be lower if there is only one
>middleman involved, thus my questions. What you
>are suggesting makes perfect sense, by the way.
Forget about that. How many times have you heard FSBO sellers
talk about keeping the commissions for themselves? There is never
consideration for the buyer in commission calculations. But buyers
always set the market price. They are the money end of the
transaction.
Don't underestimate the market insight a buyer's agent can provide.
They do these negotiations every day.
They have relationships with seller's agents.
They should have a relationship of trust with you, and work for your
interests..
Generalizations are of limited value, but I did have a positive
experience when using a buyers agent 10 years ago. It went like this.
Wife and I enlisted the aid of agent in the area we were interested
in.
Agent showed us a few homes we didn't care for.
We saw a home closer to work in an area a bit more expensive
than we planned for, and asked our agent to arrange a showing.
My wife loved it, and our agent knew this.
The asking price of 180k was ok to me (my county has all home sales
prices available on-line,) but I let the agent run the show.
Our agent said to offer 170k. How did she know this? Why did
she advise to cut some hundreds from her commission?
I'd say she was a good agent.
The seller then asked for a counter-offer. I thought that meant come
up 5k. Our agent said offer $500 more, we did, and that was it.
How did she know this? Since I'm not in that business I don't know,
and don't care to speculate.
All I know is that having her as our agent saved me money, time,
doubts and hassle, and since we have lived happily ever after in our
home, meeting her was one of those "good moments" in our lives.
Maybe it doesn't work this way for everybody.
BTW, I agree with you about commission percentages being out of whack.
RE agents could make a good living back when the median house was
selling for 40k. They must be doing very well indeed nowadays. But I
guess there's more competition now. I took classes and got a license
back in 1983, but the market was slow and I never pursued
that career. Maybe in a another life.
--Vic
Don K
> tra...@optonline.net wrote:
>
>> You have to stop thinking about who gets what and start thinking about
>> what the right price is for the house.
>
> And that's the only thing I am thinking about, but I suspect
> that the final price might be lower if there is only one
> middleman involved, thus my questions. What you
> are suggesting makes perfect sense, by the way.
The sellers already agreed to give their broker a certain percentage
of the selling price. If you want to cut out the middlemen you have to
find someone selling a house without a broker.
Don
Doug Miller
>Doug Miller wrote:
>
>>>I understand completely
>>>that the commission is set in the contract between the seller and
>>>the listing agent, but it seems that there's gotta be a way to
>>>negotiate on the 3% that would normally go to a third party.
>>
>> Apparently, you actually *don't* "understand completely" that the commission
>> is set in the listing contract.
>> You are not a party to that contract.
>> You are not able to negotiate its terms.
>
>I am not proposing to negotiate the terms of the contract between
>the seller and the listing agent.
To the contrary, that is *exactly* what you are proposing. That contract
between the seller and his agent, specifying the agent's commission, was
already signed several days, weeks, or months ago, when the seller listed the
house for sale with that agent. You're proposing to modify its terms after the
fact. You're not a party to that contract.
> I am guessing that there might
>be more flexibility in the selling price when there is a single
>middleman involved (who stands who receive much more than
>his usual commission) instead of two middlemen.
>
>> Nonsense. The entire thread to this point has been about the fact that you
>> *do* care how much of the selling price is the agent's commission, and your
>> desire to reduce that share so as to reduce the selling price.
>
>Then you haven't been reading the same thread. I said explicitly
>that I don't care if 90% of the price goes to the listing agent.
I have indeed read the entire thread, and I know what you said. I'm just
saying that you don't really believe that, even though you said it, because
the entire thread has been all about your desire to reduce the price of the
house by reducing the share that goes to the listing agent.
>All I care about is the selling price, and my hope is that the
>selling price might be lower if, instead of two 3% middlemen,
>there is only one. Apparently, this is not as ridiculous an idea
>as you seem to think.
The unrealistic part is your expectation that you will be able to alter the
agreement between the seller and the listing agent.
Doug Miller
>Doug Miller wrote:
>
>>>My question was about negotiating tips - how do I "swing" a rebate
>>>or a price reduction when the listing agent stands to make double
>>>the usual commission. It seems like this should be a win-win
>>>situation for everybody, but I am wondering about the tactics.
>>
>> How do you figure it's a "win-win" for the agent? What incentive does the
>> agent have to reduce his own commission?
>
>Because he is not reducing his own commission. Normally,
>he would expect to receive 6% of the selling price, of which
>he would give half to the buyer's agent. Now, in the absence
>of the buyer's agent, he stands to receive more than half
>of 6% (to be split with his broker, of course, etc. etc.)
>How is this not a win for the agent?
Because you're asking him to take less than the 6% that he's due under the
terms of his contract with the seller.
Doug Miller
>Doug Miller wrote:
>
>> You find a house that you like, offer what you think is a fair price for it,
>> and let the seller and the listing agent figure out how much the agent should
>> get. It's none of your concern.
>
>This is starting to sound just like buying a car. Why do you care
>what the invoice is? Holdback? None of your concern, that's
>between the dealer and the manufacturer. Find a car that you
>like and offer what you think is a fair price for it.
>
>You are right, Doug, I don't care how the seller and the listing
>agent split the money. I just don't want to pay more for the
>house than I should. You seem to think that not having
>a buyer's agent will not result in a lower price.
I didn't say that. I said that you are not able to alter the terms of that
contract. You don't have a contract with the listing agent. The only power you
have in the negotiation is the power of the purse: you can meet, or not meet,
the seller's asking price. If you offer less than the seller is asking, then
it's up to the seller to figure out a way to meet your offer (if he wants to).
How he gets there is none of your affair.
Don K
> Jeanne wrote:
>
>> Given that the seller and the
>> seller agent set the commission and you have no say (or interest) in how
>> they split it except that some will go to a buyer agent, then look for
>> FSBOs. No agents at all. Voila no commissions. Hence, lower prices.
>
> Well, around here relatively few houses are FSBO, and they seem
> overpriced to start with :) As I said, I have no problem with
> the listing agent receiving his customary commission, or whatever
> else they arranged with the seller.
Advising the seller to set a realistic asking price is one of those
no-added-value things from the broker you were complaining about. No
broker wants to waste much time pushing some overpriced property. A
FSBO might have an inflated idea of the property's worth, or might
be hoping to get just get lucky.
> Anyway, it does seem that finding a buyer's agent who'll rebate
> part of his commission provided we do our own househunting
> is our best bet.
It's probably more productive to just make whatever offer represents
a good deal for you and be willing to walk away from a property if
they don't take it. Take off another 6% if you're that hung up about it.
Aren't there also websites for FSBO's, do-it-yourself brokers or
other discounters?
Don
Elle
> I have indeed read the entire thread, and I know what you
> said. I'm just
> saying that you don't really believe that, even though you
> said it, because
> the entire thread has been all about your desire to reduce
> the price of the
> house by reducing the share that goes to the listing
> agent.
You and I are reading different threads.
This has clearly been an exploration, with the OP interested
in all suggestions.
texf...@gmail.com
>>I am not proposing to negotiate the terms of the contract between
>>the seller and the listing agent.
>
> To the contrary, that is *exactly* what you are proposing.
Then I am not expressing myself clearly. This is very possible,
and I apologize (I am not a native English speaker).
> That contract
> between the seller and his agent, specifying the agent's commission, was
> already signed several days, weeks, or months ago, when the seller listed the
> house for sale with that agent. You're proposing to modify its terms after the
> fact. You're not a party to that contract.
Ok, how about this. I don't care about the contract between the seller
and his agent. Let me ask my question this way. If there is only one
agent involved in the transaction, is this likely to result in a lower
selling price and, if so, how do I go about negotiating in this case.
Are you happier with this formulation?
>>Then you haven't been reading the same thread. I said explicitly
>>that I don't care if 90% of the price goes to the listing agent.
>
> I have indeed read the entire thread, and I know what you said. I'm just
> saying that you don't really believe that, even though you said it, because
> the entire thread has been all about your desire to reduce the price of the
> house by reducing the share that goes to the listing agent.
Alright, let's say I am not reducing the share that goes
to the listing agent (believe it or not, my goal is to
minimize the price, not the agent's share).
Do you have any advice on obtaining a lower price if
there is no second agent involved?
texf...@gmail.com
>>You seem to think that not having
>>a buyer's agent will not result in a lower price.
>
> I didn't say that. I said that you are not able to alter the terms of that
> contract. You don't have a contract with the listing agent. The only power you
> have in the negotiation is the power of the purse: you can meet, or not meet,
> the seller's asking price. If you offer less than the seller is asking, then
> it's up to the seller to figure out a way to meet your offer (if he wants to).
> How he gets there is none of your affair.
Fair enough. The contract between the seller and his agent is indeed
none of my affair. So, how do you recommend obtaining a lower price
there is no second agent involved in the deal?
texf...@gmail.com
>>Because he is not reducing his own commission. Normally,
>>he would expect to receive 6% of the selling price, of which
>>he would give half to the buyer's agent. Now, in the absence
>>of the buyer's agent, he stands to receive more than half
>>of 6% (to be split with his broker, of course, etc. etc.)
>>How is this not a win for the agent?
>
> Because you're asking him to take less than the 6% that he's due under the
> terms of his contract with the seller.
Please correct if I am wrong, but my understanding
is that if I show up with a random agent I got off the
street, the listing agent *will* take less than the 6%.
In fact, he will give up half of his commission without
any complaint. Is this correct?
I keep hearing that "a buyer's agent costs you nothing,
he is paid by the seller". But from what I understand,
there is nothing about paying the buyer's agent in
the standard contract between a seller and a listing
agent. From the contract forms I've seen (and you'll have
to excuse me if I am wrong), the seller promises 6%
to the listing agent, and then the listing agent expects
to give half of that to the buyer's agent. Is this correct?
texf...@gmail.com
>>I still don't understand why listing agents would rather
>>lose the deal than rebate even a single cent of
>>the buyer's agent's commission
>
> Because you're not the only person in the world who's willing to buy that
> house.
Maybe I am, maybe I am not. Don't know where you are, but
in my neck of the woods houses aren't exactly flying off the lots.
The real estate bubble passed us by. Prices have been dropping,
now they are back up again, but there is a lot of new development
holding prices down.
> What, you think you're the only guy who's ever gone househunting without
> having a buyer's agent?
No, of course not. That's exactly why I am here, asking questions:
to get some advice from people who have done it before, to
educate myself, to clear my misconceptions. I am sorry if
my attempts to learn rub you the wrong way, but you don't
really have to be so hostile, you know?
SoCalMike
> catalpa wrote:
>
>>> Our primary objective is to buy a nice house, not to antagonize
>>> potential sellers and their agents :) But it seems that gifting an
>>> extra 18K to the listing agent (or the buyer's agent, whose services
>>> we don't really need) is an overkill. Any advice will be appreciated!
>> The listing agent won't give you a cent. You need to find a buyer's agent
>> that gives rebates.
>
> Yeah, this seems to be the consensus :( Oh well.
> Kinda sucks to pay someone $15K for doing nothing,
> but I guess that's how the system is set up.
>
> I still don't understand why listing agents would rather
> lose the deal than rebate even a single cent of
> receive anyway with any other buyer),
> but there are lots of things I don't understand :)
>
its like lawyers not suing lawyers, cops not ticketing other cops and
sharks not eating other sharks... professional courtesy.
the selling agent knows they could end up being the buying agent from
the same person on the next transaction, especially in small towns.
SoCalMike
> RE agents could make a good living back when the median house was
> selling for 40k. They must be doing very well indeed nowadays. But I
> guess there's more competition now. I took classes and got a license
> back in 1983, but the market was slow and I never pursued
> that career. Maybe in a another life.
since the "boom" of the past few years, *everyone* has a RE license now.
thats why agents are averaging 3 sales a year.
SoCalMike
> Doug Miller wrote:
>
>> You find a house that you like, offer what you think is a fair price for it,
>> and let the seller and the listing agent figure out how much the agent should
>> get. It's none of your concern.
>
> This is starting to sound just like buying a car. Why do you care
> what the invoice is?
heh. if by "invoice", you mean what the LAST person paid for it, you
might not want to know that.
i paid $119k for my condo from an old couple that bought it as a repo 4
years earlier. they paid half that. oh well. even with the flaccid
market, its still worth over double what i paid for it 4 years ago.
the sellers ended up buying into a mobile home park nearby. why? dunno.
Rick Blaine
>since the "boom" of the past few years, *everyone* has a RE license now.
>thats why agents are averaging 3 sales a year.
And why the agency owner is driving around in his *purchased* Lexus, sitting in
the corner office of his investment office building, collecting rent from all
the agents on top of the agency percentage, and laughing all the way to the
bank.
Doug Miller
>
>Ok, how about this. I don't care about the contract between the seller
>and his agent. Let me ask my question this way. If there is only one
>agent involved in the transaction, is this likely to result in a lower
>selling price
Probably not -- most likely it results in a higher commission for the agent.
>and, if so, how do I go about negotiating in this case.
Same way you would in any other purchase transaction: pay what the seller is
asking and buy the property, or offer less than that and prepare yourself for
the possibility that your offer will be rejected.
>Are you happier with this formulation?
Doesn't really make any difference. The fact is that the agent's commission
has already been stipulated in a binding contract to which you are not a
party. Your ability to influence the terms of that contract is essentially
zero.
>
>>>Then you haven't been reading the same thread. I said explicitly
>>>that I don't care if 90% of the price goes to the listing agent.
>>
>> I have indeed read the entire thread, and I know what you said. I'm just
>> saying that you don't really believe that, even though you said it, because
>> the entire thread has been all about your desire to reduce the price of the
>> house by reducing the share that goes to the listing agent.
>
>Alright, let's say I am not reducing the share that goes
>to the listing agent (believe it or not, my goal is to
>minimize the price, not the agent's share).
My point is that you've been very clear throughout the thread that your intent
is to minimize the price *by* reducing the agent's share.
>
>Do you have any advice on obtaining a lower price if
>there is no second agent involved?
>
Sure. Same way you would obtain a lower price if there *is* a second agent
involved -- offer a lower price. Feel free to point out to the seller that if
he renegotiates a lower commission with the agent, he can make more money out
of the deal. But don't be surprised if your offer is not accepted.
Doug Miller
agent involved in the deal or not is immaterial from the buyer's point of
view: you buy the house at a particular price, or you don't.
Doug Miller
>Doug Miller wrote:
>
>>>Because he is not reducing his own commission. Normally,
>>>he would expect to receive 6% of the selling price, of which
>>>he would give half to the buyer's agent. Now, in the absence
>>>of the buyer's agent, he stands to receive more than half
>>>of 6% (to be split with his broker, of course, etc. etc.)
>>>How is this not a win for the agent?
>>
>> Because you're asking him to take less than the 6% that he's due under the
>> terms of his contract with the seller.
>
>Please correct if I am wrong, but my understanding
>is that if I show up with a random agent I got off the
>street, the listing agent *will* take less than the 6%.
>In fact, he will give up half of his commission without
>any complaint. Is this correct?
If that's what the listing contract stipulates, yes.
>
>I keep hearing that "a buyer's agent costs you nothing,
>he is paid by the seller". But from what I understand,
>there is nothing about paying the buyer's agent in
>the standard contract between a seller and a listing
>agent. From the contract forms I've seen (and you'll have
>to excuse me if I am wrong), the seller promises 6%
>to the listing agent, and then the listing agent expects
>to give half of that to the buyer's agent. Is this correct?
That's normally the way it works, yes.
Doug Miller
>Doug Miller wrote:
>
>>>I still don't understand why listing agents would rather
>>>lose the deal than rebate even a single cent of
>>>the buyer's agent's commission
>>
>> Because you're not the only person in the world who's willing to buy that
>> house.
>
>Maybe I am, maybe I am not. Don't know where you are, but
>in my neck of the woods houses aren't exactly flying off the lots.
It's the same way here, too, from what I'm told. (Indianapolis)
>The real estate bubble passed us by. Prices have been dropping,
>now they are back up again, but there is a lot of new development
>holding prices down.
Definitely the case here too. So the seller may have some motivation to lower
his asking price. How he goes about doing that is not the buyer's concern.
>
>> What, you think you're the only guy who's ever gone househunting without
>> having a buyer's agent?
>
>No, of course not. That's exactly why I am here, asking questions:
>to get some advice from people who have done it before, to
>educate myself, to clear my misconceptions. I am sorry if
>my attempts to learn rub you the wrong way, but you don't
>really have to be so hostile, you know?
I'm not being hostile, just realistic. You're not a party to the
listing contract. You have no power to alter its terms. Yet despite repeated
explanations of that from several others in addition to me, you persist in
thinking that you do. That's *not* realistic.
texf...@gmail.com
> I'm not being hostile, just realistic. You're not a party to the
> listing contract. You have no power to alter its terms. Yet despite repeated
> explanations of that from several others in addition to me, you persist in
> thinking that you do. That's *not* realistic.
Believe it or not, I have a completely open mind about this.
That's why I am asking questions and learning from other people,
yourself included. I do not "persist" in thinking anything, because
I haven't formed any firm opinions yet. That's why I try to qualify
every statement I make with "it seems that..." or "wouldn't it make
sense that..." If I am wrong about something, I am willing to listen
to an explanation and yes, I often ask for clarifications if I don't
understand.
Please don't attribute opinions to me that I don't hold. If my mind
were set, I would not be asking questions here, now, would I?
Tony Sivori
> In article <pan.2006.09.04....@yahoo.com>, Tony Sivori
> <TonyS...@yahoo.com> wrote:
>
>>Consult an attorney on how late in the deal you can negotiate the
>>commission.
>
> Hellooooooo! The *buyer* can't negotiate the listing agent's commission
> at any point in the deal. The listing agent's commission is specified by
> a contract between the listing agent and the *seller*.
You're wrong. I can negotiate and reduce the commission, provided the
agent is willing to do so.
>>If possible, I'd get the price of the house set, then "oh, by the way"
>>on the commission. That way, you have nothing to lose but something to
>>gain. The home owner will get the sale, and will pocket the same amount.
>>The listing agent will get his / her 3 or 4%. You'll get the house for 2
>>or 3% less. Everyone should be happy.
>
> And if I were the seller, I'd tell you to go pound sand. You've already
> signed a purchase offer at a specific price, I've accepted it, and
> that's the price at which you're going to buy the house. If I negotiate
> any reduction in the listing agent's commission, then *I* keep that
> money, not you.
You're obviously a big fan real estate agents and their fees. So use 'em,
love 'em, pay them to your hearts content. Just don't get bent when I
don't share your view. Or rather more accurately, go right ahead and get
bent if you want to, but don't expect me to care what you think.
--
Tony Sivori
KLS
>I am not really trying to get into the semantics of who is
>technically paying whom. It's too bad this thread has taken
>this turn.
The problem is that in the United States, these "semantics" are
exactly what you're battling against, as Doug has been telling you.
You're right that agents can adjust their commissions pretty much at
will, but as he's pointed out to you, 1) they won't unless there's a
financial advantage, and 2) even if there is, they still won't because
the system is so strongly entrenched that their best interests are
supported by the status quo, rightly or wrongly.
My advice to you is to continue the battle you're fighting because
logically you are absolutely correct. However, you also need to be
prepared to lose a lot of deals before you find the one that comes
together the way you want. So, I wish you all the best in your
crusade because I agree with your general principle about agents
taking too much of the profits. Maybe in 5-10 years we'll have a more
equitable real estate buying/selling mechanism.
Terry Lomax
texf...@gmail.com wrote:
> We are in TX and are about to make the jump and buy our first house
> in the next 6 months or so. At the moment, we are planning to do it
> without a buyer's agent - we've been studying our target neighborhood
> for a while and have a pretty good idea of what different types of
> houses sell for, don't need help with finding a mortgage broker (we've
> been saving for several years, so we'll just buy the house for cash),
> have a good inspector lined up (a family friend), etc. We are
> fortunate to live in an area where the MLS is online, so we don't need
> an agent to look at the listings.
Your situation is more ideal for using a buyer's agent than most
situations. Here's why.
There's a conflict of interest if a buyer's agent has ties with a bank,
because the buyer's agent will steer you toward higher home prices so
the bank sells you a bigger loan.
There's a conflict of interest if a buyer's agent knows the inspector,
because the inspector might pass a house with problems so the deal can
go through and the buyer's agent can get the commission.
It should be obvious to potential home buyers: when you get your loan
preapproved, do NOT pick a buyer's agent based on recommendations from
the loan company, and when you pick a home, do NOT choose an inspector
based on a recommendation from the buyer's agent.
With those two problems gone (as you're paying cash and you know your
inspector), the only remaining conflict of interest is a problem that
will NEVER go away: the buyer's agent will steer you to more expensive
homes because he'll get a larger commission when he splits with the
seller's agent. You mostly have this problem solved because you said
you find the listings yourself. If the buyer's agent tries to steer
you to more expensive homes, you can just tell him/her: "No, I'm
looking to spend no more than $250,000. If it's not worth it to you to
help me buy a home that inexpensive, let me know and I'll replace you
with a good buyer's agent who complies with my target price range, and
I'll give him lots of recommendations that he did a good job and he'll
get more business while you'll be out of the loop..."
The buyer's agent can save you time by checking documents for the home
you want to buy.
Regarding your main question, just give a low offer without specifying
why. If the seller's agent offers to take a smaller commission from
the seller because there's no buyer's agent, great. If they don't
accept, move on. It's a buyer's market. The number of days a home is
on the market is at an alltime high. Home values continue to plunge,
so perhaps they'll like your low offer in a month and accept it after
all.
One advantage of not using a buyer's agent: FSBO homes. Buyer's agents
whine if you show interest in an FSBO. Realtors stick together, so
they try to steer people away from the good people who sell directly
without a parasite or two parasites collecting fat commissions for
doing essentially nothing.
Of course if you buy from an FSBO, you don't have to worry about a
seller's agent getting a double commission. There are so many online
sites these days, it's easier to find FSBO listings than in the past.
MLS doesn't list FSBO, does it? I know realtor.com won't list FSBO.
texf...@gmail.com
> The problem is that in the United States, these "semantics" are
> exactly what you're battling against, as Doug has been telling you.
It doesn't help that there is a lot of obfuscation around.
For example, many folks have been telling me: "the buyer's
agent doesn't cost you anything, the seller is paying him".
But this doesn't seem to be quite true. The seller has
a contract with the listing agent, not the buyer's agent
(as Doug has certainly driven home). The listing agent
will share his take 50-50 with any buyer's agent, but
would not give a single cent to the buyer himself if
there is no buyer's agent. Okay, I learned something.
> You're right that agents can adjust their commissions pretty much at
> will, but as he's pointed out to you, 1) they won't unless there's a
> financial advantage, and 2) even if there is, they still won't because
> the system is so strongly entrenched that their best interests are
> supported by the status quo, rightly or wrongly.
It's the second part that I had a hard time understanding -
that someone would sacrifice a financially advantageous
deal to maintain the integrity of the system. But then again,
I am not in this business, so what do I know. It's good
to hear all kinds of opinions here.
> My advice to you is to continue the battle you're fighting because
> logically you are absolutely correct. However, you also need to be
> prepared to lose a lot of deals before you find the one that comes
> together the way you want.
Yeah, that's the thing. I am not really prepared to tilt
at the windmills. It seems stupid to pay $15K to a buyer's
agent since we'll be doing all the work anyway, but, on
the other hand, if we have no realistic prospect of
getting a lower price without a buyer's agent, it might
be simpler just to get one. Contrary to Doug's accusations,
I am listening and learning.
Lou
<texf...@gmail.com> wrote in message
news:1157382127.9...@i3g2000cwc.googlegroups.com...
> Lou wrote:
>
> >> My understanding is that if we buy a house without a buyer's agent,
> >> the listing agent gets to collect the entire 6% commission (with our
> >> target price, 6% amounts to $30-35K, not exactly pocket change).
> >> We are thinking of trying to negotiate for either a rebate, or
> >> reduction in price based on the fact that the listing agent won't have
> >> to split the commission with the buyer's agent. It seems that the
> >> listing agent would have every incentive to go for this - after all,
> >> we could always turn around, get an agent, and the listing agent
> >> would end up with only 3%. Yet we are not sure how to negotiate
> >> the split, when to bring this up during the offer process, etc.
> >
> > I don't get it - are things that different in Texas?
>
> I don't think there are many differences between Texas
> and New Jersey. It's relatively unusual for an attorney
> to be involved in TX, and there is a survey done almost
> every time, but other than that, it's pretty much the same
> from what I can tell.
>
> > I live in New Jersey. Around here, house prices generally are set by
the
> > market. Some people sell their houses themselves, some (most) sellers
use
> > an agent. Listing agents certainly advise sellers as to what a house is
> > worth, and of course they (and the seller) want to get as much as they
can,
> > but if the price is set too high a house just sits there without being
sold,
> > and eventually the seller ends up reducing the price.
>
> Yep, that's pretty much how it works here. That said, it's
> conceivable that when faced with two offers - say, $500K from
> someone who has a buyer's agent and $495K from someone
> who doesn't - the seller and his agent would go for the latter
> because everybody would get paid more, isn't it?
> (And no, I am not talking about dropping the offer by $5K
> after the contract is signed).
I still don't get it. What if the offers were reversed - the 500k is from a
buyer without an agent, and the 495k is from a buyer with a buyer's agent?
Or what if both offers came from buyers with agents, or both came from
buyers without agents? A "rational" seller will accept the offer that
nets the greatest amount of money after all the fees, commissions, etc. are
paid. Unless it affects the seller's net, why the seller would care if the
buyer had a buyer's agent or not is beyond me.
The seller's real estate agent has a (legal?) duty to present all offers
received to the seller. The agent may offer advice, but it's the seller who
decides which offer to accept, if any.
> > In any case, the seller pays the commission to the listing agent, and
the
> > price is pretty much independent of whether the seller uses an agent or
not.
> > What difference does it make to you what the seller does with the money?
>
> Doesn't make any difference to me. As I said before,
> the seller can pay 90% of the price to the listing
> agent, it's all the same to me.
Then how you can consider that you should get a rebate doesn't make sense.
Natalie Munro
> "Natalie Munro" <aa...@FreeNet.Carleton.CA> wrote
>>
>> You're paranoid.
>
> You're a real estate agent. :-)
It's so neat how you got that to rhyme with 'scum' :)
Tony of the New York Times would be laughing with us if he had the time,
but he's very busy getting paid to write juicy, inside scoopy articles
that sell more magazines to more people.
Lou
"Don K" <dk@dont_bother_me.com> wrote in message
news:rv6dnYTEwvux9mHZ...@comcast.com...
> <texf...@gmail.com> wrote in message
news:1157380776.4...@i3g2000cwc.googlegroups.com...
> > tra...@optonline.net wrote:
> >
> >> You have to stop thinking about who gets what and start thinking about
> >> what the right price is for the house.
> >
> > And that's the only thing I am thinking about, but I suspect
> > that the final price might be lower if there is only one
> > middleman involved, thus my questions. What you
> > are suggesting makes perfect sense, by the way.
>
> The sellers already agreed to give their broker a certain percentage
> of the selling price. If you want to cut out the middlemen you have to
> find someone selling a house without a broker.
>
> Don
And, I might add, a seller who's willing to drop the price because of that.
Based on my admittedly limited experience, people who decide to go the FSBO
route do so in the expectation of being able to pocket that money - if they
have to drop the price because the buyer thinks they're not paying an agent,
they might just as well have an agent and save themselves the trouble.
tra...@optonline.net
Terry Lomax wrote:
> texf...@gmail.com wrote:
>
> > We are in TX and are about to make the jump and buy our first house
> > in the next 6 months or so. At the moment, we are planning to do it
> > without a buyer's agent - we've been studying our target neighborhood
> > for a while and have a pretty good idea of what different types of
> > houses sell for, don't need help with finding a mortgage broker (we've
> > been saving for several years, so we'll just buy the house for cash),
> > have a good inspector lined up (a family friend), etc. We are
> > fortunate to live in an area where the MLS is online, so we don't need
> > an agent to look at the listings.
>
> Your situation is more ideal for using a buyer's agent than most
> situations. Here's why.
>
> There's a conflict of interest if a buyer's agent has ties with a bank,
> because the buyer's agent will steer you toward higher home prices so
> the bank sells you a bigger loan.
This is just nonsense. I've dealt with lots of real estate agents and
never had the feeling that they were trying to get me to buy more
expensive homes so some bank they are in cahoots with can give a
slightly larger loan. The simple fact is, most buyers know the price
range they are looking for and a real estate agent would be pretty
stupid wasting time trying to get them into a more expensive house for
the chance of what? A bigger kickback from a bank? Isn't that illegal
in most states to begin with, particularly if it's not disclosed?
If there is a conflict of interest, it's that it is in any agents
interest to just close a deal without regard to price, so they can
collect a quick commission and move on. On the buy side, that means
they could have you pay $330K for a house that they think is only worth
$300, just to be done and move on. On the sell side, it means they
would rather see it sold for $300K today, rather than sit around for
months and wait and see if they can sell it for $330, because the small
diff in commission aint worth it.
>
> There's a conflict of interest if a buyer's agent knows the inspector,
> because the inspector might pass a house with problems so the deal can
> go through and the buyer's agent can get the commission.
That's a valid point.
>
> It should be obvious to potential home buyers: when you get your loan
> preapproved, do NOT pick a buyer's agent based on recommendations from
> the loan company, and when you pick a home, do NOT choose an inspector
> based on a recommendation from the buyer's agent.
>
> With those two problems gone (as you're paying cash and you know your
> inspector), the only remaining conflict of interest is a problem that
> will NEVER go away: the buyer's agent will steer you to more expensive
> homes because he'll get a larger commission when he splits with the
> seller's agent. You mostly have this problem solved because you said
> you find the listings yourself. If the buyer's agent tries to steer
> you to more expensive homes, you can just tell him/her: "No, I'm
> looking to spend no more than $250,000. If it's not worth it to you to
> help me buy a home that inexpensive, let me know and I'll replace you
> with a good buyer's agent who complies with my target price range, and
> I'll give him lots of recommendations that he did a good job and he'll
> get more business while you'll be out of the loop..."
>
> The buyer's agent can save you time by checking documents for the home
> you want to buy.
Let's see. You think the agent is corrupt and working in cahoots with
a bank to force people into bigger homes. You think the agent is out
to screw you by getting you into a bigger house for more commission.
Yet, you want the agent to save you time by reviewing documents? LOL
Gordon
@m73g2000cwd.googlegroups.com:
> I still don't understand why listing agents would rather
> lose the deal than rebate even a single cent of
> the buyer's agent's commission (which they won't
> receive anyway with any other buyer),
> but there are lots of things I don't understand :)
>
In some states ilegal to to share a commision with
anyone who isn't a licensed realtor.
texf...@gmail.com
> A "rational" seller will accept the offer that
> nets the greatest amount of money after all the fees, commissions, etc. are
> paid. Unless it affects the seller's net, why the seller would care if the
> buyer had a buyer's agent or not is beyond me.
Let me explain what I *was* thinking (I don't want
to get attacked again for not getting it; I am getting it, I am
just explanining my original reasoning).
It *seemed* to me - apparently, erroneously - that in
the absence of a buyer's agent, it is possible to arrange the
deal that the seller nets more, the listing agent gets paid
more than his customary 3%, and the buyer pays less.
It *seemed* to me that such a deal would be advantageous
to a rational seller and to a rational agent. Apparently,
I was wrong.
Now, folks have attacked for me for suggesting this,
and explained that I don't understand the system, and
admittedly I don't. Apparently, no listing agent would
agree to such a deal even if everyone gets paid more
than they would with a buyer's agent. Okay, I accept that.
The original idea will not work.
>> Doesn't make any difference to me. As I said before,
>> the seller can pay 90% of the price to the listing
>> agent, it's all the same to me.
>
> Then how you can consider that you should get a rebate doesn't make sense.
I was not saying that I *should* get a rebate. I was
conjecturing that the absence of a fourth party who
usually collects 3% of the selling price might enable
the seller to net more, the listing agent to net more,
and the buyer to pay less. The mathematics of this
works, but in reality this is not likely to happen, or
so people here tell me. Okay, I accept this.
tra...@optonline.net
They don't have to share a commission to do what she wants. All they
have to do is agree to accept less than the full commission to close
the deal, which is legal anywhere.
Rick Blaine
>I still don't get it. What if the offers were reversed - the 500k is from a
>buyer without an agent, and the 495k is from a buyer with a buyer's agent?
>Or what if both offers came from buyers with agents, or both came from
>buyers without agents? A "rational" seller will accept the offer that
>nets the greatest amount of money after all the fees, commissions, etc. are
>paid. Unless it affects the seller's net, why the seller would care if the
>buyer had a buyer's agent or not is beyond me.
There are usually other factors involved besides the offer price. The seller
needs to evaluate the odds that the deal will go through, any contingencies, the
likelyhood that the deal will fall thru for any number of reasons.
The chances of two people making identical offers except for price is unlikely.
Rick Blaine
>Based on my admittedly limited experience, people who decide to go the FSBO
>route do so in the expectation of being able to pocket that money - if they
>have to drop the price because the buyer thinks they're not paying an agent,
>they might just as well have an agent and save themselves the trouble.
Exactly. The house has a value. The presence or absence of an agent doesn't
change that value. And in any case, the lack of an agent on the sales side does
not mean that the seller is pocketing a lot of extra money. There are still
listing fees, advertising, lawyers, etc.