<p><a href=“http://www.nytimes.com/2008/01/22/business/22agent.html?_r=1&hp&oref=slogin[/url]”>http://www.nytimes.com/2008/01/22/business/22agent.html?_r=1&hp&oref=slogin</a> </p>
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<p>What a loser. $75,000? Should have used that to find a better job.</p>
<p>I think there’s an implicit conflict of interest between acting as a real estate agent and acting as the mortgage broker. Some of the sleaziest or most dubious transactions I’ve seen are where someone on the other side is acting in both roles. </p>
<p>I also run over comps with my clients, both Sellers and Buyers, before listing and before writing an offer.</p>
<p>I am a realtor, and there are some that I have no respect for. With my company we are contraced, and not independent (this is the case for ReMax). We are forced to take a certain amount of ethic classes and cannot hold an active mtg brokers license. Our state even has a paragraph that spells out that you are employing a Realtor and to hire other licensed professionals. I read this paragraph out to them and explain it thoroughly…my typical statement is I can assist you in Real Estate Sales, but I am not a mtg broker, a licensed home inspector, or a Title attorney, you need to speak to them. I than hand them 3 cards for ea area and tell them to look them over, or chose someone they want. </p>
<p>I also run the comps like TheDad and leave it on the computer screen for them while we are writing the contract. I do this in front of them so they can see I am not hiding anything. The worse part is when they look at me and say what should I offer them? I have to say to them I cannot advise you on what to spend, all I can do is show you the comps and you must make that decision…it is the one thing that as a buyer I know is frustrating, afterall “we know the market…right?”</p>
<p>I did sit in 1 transaction on the other side of the table with the buyer who used a realtor/mtg broker…we threatened them with losing their earnest money b/c they kept putting off the closing…final threat be there at 4 or we start mediation, they showed up at 4:05. </p>
<p>To all prospective buyers and sellers go with a company that has contracted realtors (in other words they always have to split their commission) not someone who gets 100% of the commission (I hear the screams now), but here is my reason as a contracted Realtor we must attend monthly meetings, we must attend classes besides continuing ed. The successful Realtor can make just as much on either side of the fence, but I would rather have one that has to answer to someone above them. I AM SPEAKING AS A HOMEOWNER (NOT A REALTOR) WHO HAS BOUGHT AND SOLD 5 HOMES IN 12 YEARS</p>
<p>My motto to every client when I first meet them is “I WANT YOU TO BE THE MOST INFORMED BUYER/SELLER”. I always get a quizzical look like that’s stupid than I won’t use ever again…inevitably I get more return business and referrals b/c they are so informed, they felt relaxed through the process and they realized there is alot more to real estate than opening a door to a home, planting a for sale sign and writing a contract.</p>
<p>With all the data now available for free on the interent including MLS data from nearly every area, nobody should be uninformed–especially sophisticated educated buyers who have already bought and sold homes. I hope they spend $200K on their case and lose every cent on this nonsense. Then the agent should sue them for his costs.</p>
<p>Setting myself to be shot by all real estate agents on this board:</p>
<p>As barrons noted, with all of the data for homes on the market available on the net, why should I, as a home buyer, use a real estate agent to search for a new home? I have seen on-line real estate agency sites that claim that they rebate most of the buying agent’s commission back to you the buyer ([BuySide</a> Realty](<a href=“http://buysiderealty.com/]BuySide”>http://buysiderealty.com/)) So, If I can research homes for sale myself, what is it that an agent would provide that is worth $18-20K?</p>
<p>I don’t mean this to be inflammatory, but having bought two houses in the past (one a FSBO when I was a “kid” of 28 years old and the other through an agent 2 years later), I’m not sure that I recall what the value added that the agent provided that would be worth that kind of money in today’s market.</p>
<p>Some buyers need the help. Most second and third timers do not. When I had to buy in a new city I used an agent and it was helpful. My second home there was bought directly. When we sell we will use and agent as I do believe that FSBO loses money but we’'ll use the low fee listing agents and pay the full half to the buyers agent.</p>
<p>fundingfather, I’d like to know too. </p>
<p>In our area FSBOs tend to not do well, so IMO an agent is almost necessary when selling. But if you are familiar with the area and like barrons says, are a 2nd, 3rd, etc -timer at buying…why would an agent be necessary?
Couldn’t the same thing be accomplished with a RE atty? </p>
<p>I also don’t mean to be infammatory, since I am good friends with a couple realtors ;)</p>
<p>First, in my state the seller pays for the realtor cost. Now b4 you say oh yeah but a FSBO is cheaper, IMO it is not, most FSBO’s bring in a realtor for a CMA and then list on their own(I have yet to see a seller deduct 6%, typically they list it at the CMA $$$), thus you have 2 parties that are not licensed in real estate doing a legal transaction. I bought a FSBO, knocked down the price, but ade it a condition that my realtor was paid through them (I was licensed in another state).<br>
Second, by hiring a realtor you have legal representation. Most contracts state if party A fails to do something Party B has recourse (mediation is the typical recourse)
Third, Realtors pre-qualify their clients, we know how much they can afford, and when we write the contract it comes with a pre-qual letter. I have had clients who go to mtg brokers (I deal directly with lenders, and run away from brokers) and get a pre-qual letter, some brokers will sell them a loan that would qualify the buyers in a home they never could afford in the 1st place (SUB-PRIME)
Fourth, Do you know what the legal easement is for your state or county? As realtors we have that knowledge
Fifth, 88% of homebuyers use Realtors, why would you close yourself off? If you live in a neighborhood with listing activity, I may agree. I have always stopped with clients in front of a FSBO and asked do you want me to call…typical answer…NO…my opinion, they are leary of why they didn’t use a realtor.
Sixth, As a Realtor we keep every doc that was created in the sale (inspection, pre-qual, counters, HUDS,contacts # etc.) for 3 yrs. I have had clients who call me up and ask who did the termite inspection? I can give the name, number and cost. </p>
<p>I respect everyone who does the sale or buying of a home on their own, and give you credit. I tried selling 1 of my own, b4 becoming a realtor on my own, and got tired of being stuck to the house!</p>
<p>I am not trying to convert anyone, I applaud anyone who can do it, but to say we don’t deserve the commission is wrong. I typically spend at least 100+ hrs. with each client. My commission is cut into parts, I am self employed. I have to pay taxes, health insurance, my broker, the state, legal insurance, my lock box, my listing fee, so that 18K actually works out to be @ 7K</p>
<p>Here’s my numbers:
200 pm lock box
7% to royalty fees
41% to taxes (we don’t pay SS or payroll)
Gas and food (have to stop and eat)
Wear and tear on my car (yes, it is deductible, but 18 cents a mile does not cover the gas)
Fortunate enough not to pay health, but I believe it is 200 pm
Adds run 200 per week
Then add the cut to the broker which can be anywhere for 20-55%</p>
<p>I hope everyone now see we are not gauging anyone, we are here to help those who are willing to employ us. I will always support any homeowner who wants to sell on their own, but I will also ask do you know the real estate law in your state? If you don’t than maybe you should at least contact a realtor for info</p>
<p>DrDrewsmom…RE atty can’t let you into a home with a lockbox. They are there for the closing and in my state only to make sure there are no clouds on the title, and that the i’s and t’s are dotted…will not get involved with appraisals or mtg issues</p>
<p>Over the years I have sold 5 houses and bought 6. It is all but essential to have a realtor to sell a house. As a seller, I always feel that I am being ripped off because about all the realtor does is list the house. Almost always the house is actually sold by a different agency. On the other side, when I buy a house I definitely use a realtor. The realtor that shows you houses knows they will make a sale and they will work for the buyer even though they are paid by the seller.</p>
<p>Edad you just proved the stats that buyers use a realtor. By the way to FSBO’s make sure you use the right company, in our state if there is no lockbox than you are not in the system</p>
<p>Back to the suit. Frankly, I see this as buyer’s remorse over the price. This story really irritates me because it is personal. I have a relative who sold a house. The party who purchased it sued my relative (the seller). The reason for the suit was an “undisclosed structural problem”. In the meantime, they had a licensed person inspect the home before purchasing. They sued for more money than the dwelling was worth. Afterall, it was in a prime location, and the lot had substantial value. As a side note, the house was well maintained ( really beautiful too) and is standing 15 years+ after this dwelling was purchased. Frankly, my relative wanted to settle up front rather than coughing up thousands with an attorney. The plaintiff refused to settle the case until tenths of thousands were spent with an attorney! The relative saw this as a hold up, and really an attempt to renegotiate the purcase price after the fact. Oh, and realtors were sued as well. I am not sure about their inspector, but I imagine that they were also sued. This fiasco cost my relative a fortune, and it was wrong. The plaintiff finally settled just before trial and my relative had to spend a fortune with an attorney, and hand over additional money to this buyer. It was a very sad situation. I don’t know of any other similar stories, but I know of this one, because this happened to a relative.</p>
<p>As for Sellers using Realtors, I can generally get them a better net than they most likely would have gotten with a FSBO. Most Sellers don’t have a clue about how to properly market and to maximize value. But beyond the net, what’s the value of keeping them out of post-sale lawsuits? At least in California, the disclosure protocols are fairly rigorous and a wrong check-mark on a form can cost you thousands later on.</p>
<p>For Buyers, it’s a slam dunk. I can comp properties far better than they can unless they’re an appraiser or realtor themselves. </p>
<p>One indicator of my pro-consumer abilities: three times I’ve talked clients out of writing offers on properties that I thought were horrible for them. In all three cases, they were much happier with what they ultimately bought, even if it took a few weeks longer. (One case, Mrs. Buyer wound up delivering a baby the day escrow closed…we cut that one a little close, or at least that’s what the mohel said.)</p>
<p>Oy Gavolt ;)</p>
<p>I see this as the buyer realizing they bought while the prices were still on the downhill slide and trying to blame someone other than themself. A realtor is a salesperson who has a specific interest in closing the deal. Why would anyone put all of their faith in someone who has an interest in the deal? They should do their own research, check the comps, have some idea if the market is in heading upwards or downwards. This is made much easier nowadays with the wealth of info available on the internet. Saying that 'a house down the street of similar size cost $xxxx less doesn’t always cut it - especially in that area (of which I’m familiar) and in that price range ($1M). Something as simple as the orientation or the view the home has can easily add 10% to the price of the home. Some homes in that area have fantastic views of the ocean, lagoon, or back-country and others have none.</p>
<p>This says a bit more about the personality of the buyer -
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<p>I sold my last house as a FSBO and bought my current one as a FSBO and they both worked out great. I’d be willing to do it again although I’d have to decide at the time depending on the market whether selling through an agent was worth the expense. A few years ago houses were practically selling themselves around here and realtors weren’t necessarily adding much value and were taking a commission at the expense of both the seller and buyer (i.e. due to the higher price to cover the commission). In today’s market the ‘selling’ of the house is more important.</p>
<p>I meant to say tens of thousands, not tenths of thousand of dollars, LOL.</p>
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<p>I agree. Now the realtor had to take the hit. It could have been the seller, or anyone else involved in this transaction. This party just wanted to get some of their money back after the fact, and it looks like the purchaser succeeded too.</p>
<p>“They simply didn’t do what is expected of a knowledgeable, sophisticated buyer, and are now looking for someone other than themselves to take responsibility,” Roger Holtsclaw, an agent who was hired by Mr. Little as an expert witness, said in a court deposition.”</p>
<p>Good heavens, I’m supposed to be a knowledgeable, sophisticated buyer?? I thought that’s what we paid the real estate agent for–knowledge and sophistication.</p>
<p>“Mr. Little ordered an appraisal of the house but did not respond to the couple’s requests to see it, the suit charges.”</p>
<p>I found this to be a little troubling…why would he not show the appraisal to the buyers? I can’t remember if it is normal for the appraisal to be given to the buyer. But then why would the buyers close without seeing the appraisal if it were important to them?</p>
<p>If the facts are no more than what was in the newspaper, I can’t imagine that I would feel much sympathy for the buyer if I were on the jury. Sometimes the value of homes goes down if you bought at the peak. Nowadays, the value of homes goes down while you’re in escrow! That’s life…</p>
<p>So what’s next - will home sellers sue the agent if the home goes up in value after it’s sold because the realtor recommended too low of a price as perceived by the seller (after the sale of course)? The agent will get sued coming and going!</p>
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<p>I completely agree with this statement! All RE buyers should be given a paper with this statement in large type and bold letters. RE agents serve a purpose, but buyers need to be aware of this conflict of interest.</p>
<p>ucsd, I agree with you. </p>
<p>Also, I don’t think that a buyer should be able to sue the seller and use an excuse, to renegotiate a purchase price after the deal was made.</p>