If you found the property yourself and there's no contract, there's no obligation to use him, legally or otherwise, IMO.

A few warnings about double agency... the agent you approach to do it is contractually bound to the seller. Anything you tell him concerning payments/finances/financing, and ect he/she is legally required to pass to the seller. The reverse is NOT true. Once you approach the sellers agent he/she has grounds to challenge for the fee even if you bring your agent back in.

A lot depends on the marketplace, in Rhode Island my (exclusive) buyers agent was quite good with paperwork to prove she was the agent of record because of legal actions that had happened in the state. Apparently there were "open houses" that used their "guest signins" to reject paying the buyer agents commissions after the fact. In Texas nobody bothered with paperwork, and in fact my EBA here told me that my assertion on the offer was sufficient.

The seller is paying for the agents, so I have always stuck with EBAs. No conflict of interest, and they usually know the offer side of the transaction better than most.

It was very educational in RI how differently the RE agents acted when they were handed the forms at group showings. (with my agent present she doesn't have to deal with implied agency issues as with walkins and such)

Ended up not staying with the company in RI, and bought a condo in TX instead.

SUCKISSTAPLES said:If you feel like this agent is doing a good job as a buyers agent, let him show you the houses.

Going directly to the listing agent sometimes puts you in a favorable position, but more often does not

I agree. Maybe he didn't send you those because he did not feel you would like them. He has shown you some properties already, so he has an idea of what you are looking for. Tell him you want to see thewm and if he is as nice as you think, I'm sure he'll be happy to oblige.

As a Realtor, I can vouch that in general you DO NOT get a better deal going through the listing agent, all you do is get the listing agent more money. Use your own representation.

ptiemann said:There's a small chance that the seller will not permit his agent to double-end it, even though it may save him money on commission.

In TX, it's relatively common for the Realtors to write themselves a 6% (double-end) commission and detail that it gets split with the buyer's agent.
Guess what happens if the buyer has no agent? The sellers Agent can get the non-split commission.

Made an offer on a house w/o representation about a year ago. The offer was asking price -3% (basically full asking price if I brought a Realtor).
I got a counter offer of representation and a slightly higher price. My offer would have netted the seller more - but their Realtor was looking to bring money into the office.

I walked. I dunno of the seller realized what happened.

SUCKISSTAPLES said:Going directly to the listing agent sometimes puts you in a favorable position, but more often does not

Some says going to the listing agent gets the buyer a better deal, some says it does nothing except gives the agent 2x the commission. I know, a buyer's agent supposedly has the buyer's interest at heart. But, come on, the only interest they have is their own, i.e., make a sale with as little effort as feasible. This could be by getting you to not drop the price too much, or not notice too many faults with the house, and try to point out everything that is half way decent and probably already obvious.

What can be some positives / negatives if using listing agent to buy? I'm giving examples below. Please comment whether these guesses are right and add your experiences. I'm weighing whether to use listing agent vs. Redfin. Right now, it looks like Redfin is winning in my mind.

Positives
+ Listing Agent gets more commission, so he'll talk more in my favor. I think the value of this is iffy since he still can't make up facts that aren't true or make a lower offer price sound higher.
+ Listing Agent knows about seller's situation and may tell me info that gives me an advantage
+ Listing Agent knows if any offer has been made and may tell me what those offers are

Negatives
- You don't get an automatic rebate of the commission as with Redfin or other discount brokers
- Some listing agents don't do crap for you eventhough they get paid 2x

mmyk72 said:SUCKISSTAPLES said:Going directly to the listing agent sometimes puts you in a favorable position, but more often does not

Some says going to the listing agent gets the buyer a better deal, some says it does nothing except gives the agent 2x the commission. I know, a buyer's agent supposedly has the buyer's interest at heart.

Positives
+ Listing Agent gets more commission, so he'll talk more in my favor. I think the value of this is iffy since he still can't make up facts that aren't true or make a lower offer price sound higher.
+ Listing Agent knows about seller's situation and may tell me info that gives me an advantage
+ Listing Agent knows if any offer has been made and may tell me what those offers are

ALL of the "positives" you've posted violate the realtor's code of ethics for a dual/listing agent. They could be true in practice, but they would involve you paying a double comission to someone who knowingly violates their own code of ethics. Any "agent" who would do that to their seller needs to get run out of town on a rail, not rewarded with your business.

That said, I've never had a problem getting listing agents to spill all kinds of info that is helpful to me as a buyer and bad for their clients. An experienced Buyer's agent ought to have that conversation for you, and give you some distance in negotiations, which can help keep your emotions out of your money.

I'm licensed in my state and negotiated 2 deals this year - I got a very solid deal for myself, and a screaming "How-the-heck-did-you-do-that?!" deal for my brother(seriously, he had to take a three-dollar certified-check to the closing table, and current comps are selling in his hood in less than a week for $30k more than he paid!).

On my next deal, I'll have someone else negotiate on my behalf. It's just plain easier for someone who isn't involved to hold a seller's feet to the fire and play hardball.

I think a lot of these comments stem from the fact that people really know little about real estate firms work.

One of the key questions that needs to be asked is whether the firm practices disclosed dual agency or is a designated agency firm. Without getting into too much detail, if they do disclosed dual agency, then the agent can represent both the buyer and the seller. With designated agency, they only represent the seller or the buyer. An unrepresented buyer will be assigned an agent. There are pros and cons for both types.

Like condo developments, once you start discounting something, then everyone will want the same. For instance, knock 10k off the price of a unit in a 10 unit complex, then you've not just reduced the price 10k, you've reduced it by 100k. Similarly, with real estate, there are firms out there that would rather lose a deal over 1k (seen it happen) than cut their commission because once word gets out that it happened, then everyone will want the same deal and you end up alienating your future customers. Other firms let their own agents dictate how they want to practice so some may give rebates and some may not.

As for Redfin, read the fine print, I think they have a minimum commission so you didn't say what your purchase price range was going to be. I believe it's $5500.

As for making a full price offer -3% commission, that is somewhat amusing as I see some houses sell with full representation by both sides for less than the 3%. I've also heard of deals that went through that way and looked up the comps afterwards, had the buyer used an agent, they could have saved more. I actually don't blame that agent for letting you walk. People more concerned about the deal itself rather than the property make for fickle buyers, as if buyers aren't already fickle enough. That listing agent would have had to work twice as hard to close the deal as there was clearly no trust involved, so why should he get half the pay? That's usually the typical response about these situations and why it doesn't really happen that frequently.

dcg9381 said:henry33 said:
One of the key questions that needs to be asked is whether the firm practices disclosed dual agency or is a designated agency firm. Without getting into too much detail, if they do disclosed dual agency, then the agent can represent both the buyer and the seller. With designated agency, they only represent the seller or the buyer. An unrepresented buyer will be assigned an agent. There are pros and cons for both types.


To be honest, I don't know. I can tell you that the listing agent didn't offer to represent me - the listing agent offered to provide me with a "seller's agent" out of the listing office.

This wasn't a casual offer - we provided 2% earnest money with the offer letter.


henry33 said:
Like condo developments, once you start discounting something, then everyone will want the same. For instance, knock 10k off the price of a unit in a 10 unit complex, then you've not just reduced the price 10k, you've reduced it by 100k. Similarly, with real estate, there are firms out there that would rather lose a deal over 1k (seen it happen) than cut their commission because once word gets out that it happened, then everyone will want the same deal and you end up alienating your future customers. Other firms let their own agents dictate how they want to practice so some may give rebates and some may not.


That's fine, but if the above was the rational behind the decline of my initial offer and the resulting counter offer that would have netted a lot more commission for the listing office and a lower net price for the home owner, I think they're doing their client a disservice... In this case, they're representing their business, not the best interests of the own owner.

henry33 said:
As for Redfin, read the fine print, I think they have a minimum commission so you didn't say what your purchase price range was going to be. I believe it's $5500.


Contracts vary. This was TX and a that was selling for less than $200k. The seller's agent would have netted the standard 3% - which is par for the course for full service agents in this neck of the woods. Per contract, the listed commission is 6% to be split between buyers and sellers agents (not necessarily the same office).
The only exceptions I've seen that drive commissions higher are commissions on lots - where they can easily sell for under $100k. Typical agent commission is 5% on both sides (listing/buyer) for my area.


henry33 said:
As for making a full price offer -3% commission, that is somewhat amusing as I see some houses sell with full representation by both sides for less than the 3%. I've also heard of deals that went through that way and looked up the comps afterward, had the buyer used an agent, they could have saved more.


This is the typical spin I hear from agents and my local Association of Realtors. To be honest, I don't know what that house eventually sold for, but I feel that it was worth a full price offer. I had no hesitation at that price.
The fact that the seller countered with an offer that would have netted them less money indicates that I had some wiggle room, but not a full 3% - which is what I wanted if we only had one Realtor involved.

Note, if I don't know the value of the homes and the market well, I would use a Realtor. Please pretend I'm an educated, market savvy, well financed buyer.

The advertising I've heard locally is that homes sold by Realtors sell for more money than homes do when FSBO (For Sale By Owner). I'll bet you a pretty penny that the metric they're going by is the SALES PRICE of the home, not the NET to the seller...

Please, compare apples to apples - lets do a comparison of net to the seller on non-distressed sales FSBO vs Realtor.

At least you didn't tell me that buyers agents don't cost anything / work for free..

 

henry33 said:
I actually don't blame that agent for letting you walk. People more concerned about the deal itself rather than the property make for fickle buyers, as if buyers aren't already fickle enough. That listing agent would have had to work twice as hard to close the deal as there was clearly no trust involved, so why should he get half the pay? That's usually the typical response about these situations and why it doesn't really happen that frequently.

That would have been a mistake and a disservice to the client. I've bought and sold every single property I've owned without a Realtor - without exception. If I came in with no earnest money, no pre-qualification, or wrote the offer scrawled on napkin, I could see your point - but that was not the case.

My last home, I interviewed and considered listing with a local Realtor - mainly as a professional favor to my wife who does RE title for a living. She evaluated the house, gave me what she though was a good asking price. We agreed that I'd try to sell it FSBO for 60 days and if I had no luck I'd list with her. I sold that house for a substantially higher net that her suggested asking price minus the 6% commission.

I WILL hire a Realtor when I relocate and don't know much about the area or need an area specific expert. As long as I'm buying and selling property within 10 miles of where I've lived for years and my wife works in RE title, I don't need or want a Realtor or Realtor related fees.

It's for this reason that I'd say you're jumping to conclusions by saying what they did was unethical if you didn't know the type of agency practiced. It's a little strange that they said seller's agent though, typically it's a buyer's agent, but I guess a seller's agent would make more sense to the listing broker as opposed to buyer's agent. A buyer's agent would sound better to the buyer though. I didn't mean to imply that your offer wasn't serious, just the way it goes sometimes.

We're going to have to agree to disagree on this one with regards to the rationale. You haven't really shown that your deal netted the seller LESS money! It nets the seller less money if things worked the way YOU thought it would. However the seller signed a contract with the listing firm long before you showed up and in that contract it probably said that the listing agent gets 6% period. If a buyer comes with a buyer's agent, then the listing agent agrees to split the commission with that buyer's agent. If not, then you're not entitled to any commission rebate because you're not a licensed broker. There was NO savings to the seller due to the way the contract was worded. It's like going into a store and saying well why don't you cut the commission the guy that sold you that product you have on your shelf and save me some money. The deal was negotiated long before the product hit the shelf. It's hard to renegotiate a contract AFTER it's already signed. You're making the assumption that YOU as a 3rd party can interfere with someone else's contract.

As for Redfin, they offer up to 50% of the commission back to the buyer, but they're only in certain states and Texas isn't one of them. Their minimum commission is $5500 so for 200k, you would have gotten $500 back. But they're not in Texas so you couldn't use them.

As for the net to the seller, there was some study done a while ago that concluded that houses listed with Realtors sold faster but not necessarily for more. This was done in one market. The theory could be that houses listed with Realtors are on the local MLS and with basic supply and demand, the more people know about your property, the more offers you would get and the likelyhood that you would get more money for the property than trying to market on your own. There are still bidding wars in the current market. Time is also a factor so if a property sells faster, and if it were vacant, there would be carrying costs so that might save a little money there. After all, who said it? In the long run we're all dead.

As for knowing the market, yes I did assume that you knew something about it, but do you have the lastest figures? For instance do you know what sold just last week? Your information may be old and if the market is going down, then perhaps your offer was too much. On the other hand if your market was going up due to demand from first time homebuyers, then maybe the asking price netted more offers and another offer came in that was just better so the broker just let you walk. Just not enough information really to make it sound something different from sour grapes. Buyers are never really happy when they lose a deal, but sometimes after a few rounds they do learn for the next time.