I hate to tell you this, but the buying agents ALWAYS work for the seller. Why? Because you don't pay them, they get a split of the commission.
That being said, good veteran agents will look out for you. That's because they're smart enough to know that the real money isn't in screwing you on a single sale, it's the repeat business and referrals.
During my last house buying round, there was a house that not only was listed by my agent's company, but was her listing, so she would get the entire commision if I bought it. Additionally, it was a limited listing (transfer situation, the seller's employer would buy the house if not sold in a short period) that was going to run out in a few days. She recommended that I buy a different house in the same area.
If you don't trust your buying agent enough to even take referrals, I'd get a new agent immediately. You have no contract with this agent.
A good agent should be able to give you a list of appraisors and provide you with a comparative market analysis of homes in the area.
This house has been on the market for about 2 months now. It's located in the Clarks Summit area of NE Pa near Scranton where prices tend to be lower than national averages. The company selling the home mostly does re-locations because the area has a lot of fairly temporary residents. Eg. This house was bought (my realtor says) 3 years ago for #162K. It's on the market now for $175K. No work was done to it because it's fairly new. On my walk through I noticed it had a 200 amp square D service box, new hi efficiency forced air gas furnace. Taxes are on the high side I think. It may even be that the home is currently owned by the company the previous owner worked for. If you're curious, the MLS # 20055340 and can be seen here:
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last photo shows a beautiful addition made to the original home
"Larry Fishel" wrote in news:1136011715.713517.238450 @g43g2000cwa.googlegroups.com:
Some buyers are weird and some realtors are a bit unscrupulous. Sounds like this one was a combination of both.
When I sold my last house, the first buyer I encountered underbid my house and passed along a letter of credit that was only $500 over what they bid (making it look as though they couldn't go higher). I got another bid the next day for $250 under my asking price and took it. The first bidder called me up and told me he actually was able to qualify for a much bigger loan. It seems his realtor instructed him to get multiple letters of credit from his mortgage broker so they could support whatever bid they put in, but it would make it look like they had little to no wiggle room in the bid. That's the way I took it, and I told him he should consider getting another realtor before he continued his home search.
How is the market? Is the house occupied? When we purchased our home in '92 the owners had moved out of state and purchased another place, leaving this vacant. They wanted 84K, we offered 69k and settled on
72K. It needed a new roof, which they would have paid for if we offered full price. They took our offer because they had NO offers in 5 months.
Last year the people across from me listed their home. The priciest home in our neighborhood had been 250k, they thought their place was worth 329. Lots of lookers and only lookers. (They were going to lower the price but they were getting so many lookers that they thought they were asking too little!). Someone came by one day, offered 319 and they laughed "it's a bargain at 329!". he left, made an offer on something else. 9 months later it's still sitting there at 329 after having changed agents. No lookers in a while.
That's not totally true. In some cases the assessor is far behind (like 5 years). OTOH, some are fairly up to date, but all assessors offices record the sales prices of homes, so you can check recent sale prices of similar homes.
100% wrong. A "buyer's agent" contracts with the buyer to represent only the buyer. In some areas this may be unheard of but to find out, you need to check with the appropriate state regulatory agency. A "buyer's agent" often works on an hourly rate, not a share of the commission.
And both the reality and legality are as "kokonutty" said. There is a difference between a "buyer's agent" and the normal realtor with whom a buyer is dealing. The latter is always representing the seller, the former is not.
-- dadiOH ____________________________
dadiOH's dandies v3.06... ...a help file of info about MP3s, recording from LP/cassette and tips & tricks on this and that. Get it at
Properties do not always sell for the true market value. Some sellers, and some buyers, are desperate and will take or make any offer.
In my town, the realtors do a pretty good job of setting an asking price that will draw buyers, but will often tell you in advance that you should accept a slightly lower offer, if it is credible, if you want a prompt sale. Properties that are on the market too long get a reputation of being overpriced, and draw fewer offers.
We have an aspiring slumlord in town who has his realtor bid 50 percent of the asking price immediately when any property comes on the market. A seller's realtor should advise the seller to reject that offer, but is ethically bound to allow it to be presented. I am sure most people just laugh at these offers, but I am also sure that once in a while it works, or he wouldn't be doing it. A seller could, probably for emotional or intellectual reasons, find a 50% cash offer, presented immediately, attractive.
I think the gentleman who said you cannot lose money by overbidding exaggerated. Recently, in some markets, values have been appreciating so rapidly that overbidding may not hurt you. But the news lately has been full of predictions that the housing bubble will soon burst, and sales have actually decreased very recently. If you overbid, and prices do not continue to increase, you will certainly lose money. A case in point: a home in our town sold a couple of years ago for far more than similar properties, because the couple just had to have that house. Soon the husband lost his job and had to relocate to the Dakotas; his wife had to leave her lucrative local job to follow him and the kids. Their house was on the market for six months at a high asking prices, but drew few offers, none of which would have allowed them to pay off their mortgage, and pay closing costs, including a realtor's fee. They then decided to rent it to friends, but eventually the friends moved out. So I think it is fair to say that they lost money by overbidding; they just don't yet know how much they lost.
I would suggest a rule of thumb would be to check recent sales prices for similar properties. Adjust that for any special circumstances (need for repairs, exceptionally good condition, changes in the local economy, etc.) and come up with a fair price, and offer just below that, being ready to improve your offer depending on the response. If no realtors are involved, offer to split the savings with the seller.
You fail to understand. The OP was concerned because he thought the buying agent had an interest in the property selling high because the agent's company represented it. Well, the buying agent gets a share of the percentage of the selling price. They are always working for the seller. That's just the way it is.
A good agent, as I said elsewhere in the post (you didn't bother to quote, you should do that) will put aside momentary opportunities to make money and do a good job for the buyer. Again, you didn't quote my example of an agent possibly hurting herself to represent me properly. That's because a successful agent knows the money is in repeat business and referrals.
The point is, who PAYS the agent? It's not (in almost all cases in the US) the buyer. It's the seller who pays. The lower the price, the less commission for the agent. That's a fact of the real-estate game.
Again, as the bulk of my message made clear (people seem not to have paid attention to it), good agents put that aside and work hard for the buyer.
I agree with half of this. The commission is a function of the sale price, so the buyer's agent typically has an incentive to push the price higher. However, who pays the agent is irrelevant, except with regard to the separate issue of how much cash you can bring to the closing. The agent's incentives are dictated by what actions they can take to increase their income, not by who writes them their check at the end of the day.
Brian rightly points out that buyer's agents have an incentive that pushes the other way: to treat you right so they get referrals. OTOH, in a large hot market, agents will rely on referrals to differing degrees. Some agents will be able to simply cater to ill-informed buyers and treat them poorly, not caring much about referrals. Agents with large cheesy ads in the paper are prime suspects here.
An unspoken premise of many conversations about house prices is that if homes are appreciating quickly, the market value of the house will catch up quickly to the high price you paid, so you won't lose money on the house. Be careful with this one. The right way to think about paying for a house is "how much do I have to pay to beat out the next guy?" If you pay more than this, you're losing money on the purchase. Whether the market value of the house catches up with your purchase price doesn't matter.
The money you spent above what you had to pay (to beat the next highest bidder) would have been in your pocket. You could invest it and be making a return on it or (more likely) spend it on furnishing the house. Determining the minimum price you need to pay is a very difficult task, but the point is you should not take that task less seriously simply because prices are rising rapidly.
A final note (a little OT): don't judge whether there is a "bubble" in the market based on how many stories appear in the papers and on TV and on newsgroups, blogs, etc. Judge whether there is a bubble based on whether you believe a specific argument someone is making on this point. Repetition does not make something true. A good place to start is "Assessing High House Prices: Bubbles, Fundamentals, and Misperceptions", by Himmelberg, Mayer, and Sinai, Journal of Economic Perspectives vol. 19 no. 4, Fall 2005, available in any decent university library. Their bottom line is that there is little evidence of a bubble.
You are confusing a seller's agent *dealing* with a buyer and a buyer's agent. Here's the way it works...
Someone wants to sell real property and lists it with a broker.
Agents of that broker (and others if MLS) try to peddle the property. By necessity, they deal with potential buyers but they are not buyer's agents. They are *ALL* seller's agents representing the seller.
If you go to a broker and say, "I want to buy a house" agents working for him will show you houses but that does not make them buyer's agents... they are still representing the seller and are compensated by a portion of the commission arising from any sales they make.
You are perfectly free to go to a broker and say, "I want to *hire* you as a buyer's agent". If he accepts (not all will) he then represents you...he is a buffer between you and the various and sundry seller's agents. He does whatever *you* want him to do...he may search out properties, negotiate...whatever. He is compensated by *you* and that compensation is whatever was agreed upon between you; it may be an hourly fee, a flat rate, a percentage of the price you pay...whatever is agreed between you. The important thing is that he is *your* agent - a buyer's agent - and is representing you.
-- dadiOH ____________________________
dadiOH's dandies v3.06... ...a help file of info about MP3s, recording from LP/cassette and tips & tricks on this and that. Get it at
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