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Additionally realtors are a cartel and a selling agent will and can do plenty to honestly poo poo talk your offer to their client. At minimum they’ll say “I know the agent who submitted offer A and have done business with her before, but this I represented buyer I have no idea about.”
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Jan 24, 2023 12:40
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On your HOA insurance question for condos it is basically the HOA insures the building and property and you are responsible for a studs in policy. This covers drywall, flooring, cabinets, fixtures, etc., and your stuff. It is called a HO-6 policy. On a SFH you cover all the insurance with an HO-3 policy. There are many factors in what it costs but i find the HO-6 policy runs about 1/3 the cost (mine is about $450/yr on a 500sqft condo). The other big thing is the HOA financial health as mentioned already Hadlock. Unfortunately in my experience you can't get that info until you have an accepted offer. Your offer should be contingent on it though so you and your attorney can review.
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Jan 24, 2023 15:00
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Slugworth posted:The good news is that if you're able to buy a million dollar home, the only thing keeping you from dying poor is bad financial decisions! Ha it would be closer to $700K, but a family mortgage wouldn’t have PMI, have half the interest rate, and the property taxes would be a fraction of what others pay. It would be more akin to a 500K mortgage at current rates.
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Jan 24, 2023 18:03
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Dik Hz posted:lol what. The types of people who balk at getting a realtor are the types of people who are an absolute pain in the rear end to deal with throughout the transaction. Yes there's a little bit of value in knowing that the buyer has an agent pushing them to close the deal, but the post I was responding to (which said that it's moot to pocket an extra 3% of the sale price) was obviously wrong - as a seller of course you should consider that extra 3% when you're evaluating offers, that's literally more money you get to keep. "But think of the hit you take if the deal falls through" is a risk that you weigh against that "moot" 3%, and that risk may be partially or wholly mitigated by earnest money.
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Jan 24, 2023 18:44
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spwrozek posted:The other big thing is the HOA financial health as mentioned already Hadlock. Unfortunately in my experience you can't get that info until you have an accepted offer. Your offer should be contingent on it though so you and your attorney can review. Not sure about your region, but in mine, which is more than 20% condos, if you were more than a quarter-interested in putting down an offer, you would "request the docs" which always got the realtor excited because for every 100 people that show up to an open house maybe 2 or 3 might do that, and by the time you got home it would be waiting for you in your email inbox. Usually had city plat info, HOA meeting minutes going back 12-36 months, and the state-required hoa financial report, which I think must be prepared by an independent auditor every 2(?) years with a standard table at the end specifying reserves and how it's broken down. If there was an sb800 lawsuit you'd get the 300 page complaint with color photos detailing every minor imperfection in the flashing or wrong model roof crane for window cleaning or wrong color/size gravel in a drainage area compared to architect specification Reading that stuff was exhausting but very interesting and varied a lot, gave you a general sense of how well everything was managed
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Jan 24, 2023 18:48
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QuarkJets posted:Yes there's a little bit of value in knowing that the buyer has an agent pushing them to close the deal, but the post I was responding to (which said that it's moot to pocket an extra 3% of the sale price) was obviously wrong - as a seller of course you should consider that extra 3% when you're evaluating offers, that's literally more money you get to keep. "But think of the hit you take if the deal falls through" is a risk that you weigh against that "moot" 3%, and that risk may be partially or wholly mitigated by earnest money. You're assuming that a seller will accept reducing the sale price by 3% which is a benefit primarily for the buyer and may cause the seller an additional headache dealing with an unrepresented buyer. I don't know how often that actually happens and most home prices have a ~6% realtor fee baked in already. Unless you're suggesting the seller does not reduce the original sale price so that they can keep more of the sales money but then what benefit is there for the buyer?
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Jan 24, 2023 18:59
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QuarkJets posted:Yes there's a little bit of value in knowing that the buyer has an agent pushing them to close the deal, but the post I was responding to (which said that it's moot to pocket an extra 3% of the sale price) was obviously wrong - as a seller of course you should consider that extra 3% when you're evaluating offers, that's literally more money you get to keep. "But think of the hit you take if the deal falls through" is a risk that you weigh against that "moot" 3%, and that risk may be partially or wholly mitigated by earnest money. Even if they did, would you take the risk that they’d be reasonable after they’re under contract?
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Jan 24, 2023 19:00
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QuarkJets posted:Yes there's a little bit of value in knowing that the buyer has an agent pushing them to close the deal, but the post I was responding to (which said that it's moot to pocket an extra 3% of the sale price) was obviously wrong - as a seller of course you should consider that extra 3% when you're evaluating offers, that's literally more money you get to keep. "But think of the hit you take if the deal falls through" is a risk that you weigh against that "moot" 3%, and that risk may be partially or wholly mitigated by earnest money. I'll tell two anecdotes My most recent house was sold to an old couple who were unrepresented and had basically just had an attorney look over their offer. It was a cash offer and the highest bid, so I would have picked them anyway, but pocketing that extra 3% was great and obviously would have been a consideration if other offers had been more competitive. The deal closed without a hitch The house before that was sold to a represented buyer who made an "as is" offer and would later try and argue that "as is" meant that we should pay for their utilities in perpetuity. This wasn't a joke, they were completely serious and tried to "concede" to only asking that we pay 1 year of their utility bills. This was a simple SFH Don't let an agent convince you that representation is going to ward off a pain in the rear end
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Jan 24, 2023 19:02
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Hadlock posted:Not sure about your region, but in mine, which is more than 20% condos, if you were more than a quarter-interested in putting down an offer, you would "request the docs" which always got the realtor excited because for every 100 people that show up to an open house maybe 2 or 3 might do that, and by the time you got home it would be waiting for you in your email inbox. That would be nice. It was always like pulling teeth from the HOA management company to get the info in my experience.
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Jan 24, 2023 19:03
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Popete posted:You're assuming that a seller will accept reducing the sale price by 3% No, I'm not. Popete posted:Unless you're suggesting the seller does not reduce the original sale price so that they can keep more of the sales money but then what benefit is there for the buyer? The same benefit as offering a higher purchase price
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Jan 24, 2023 19:36
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spwrozek posted:That would be nice. It was always like pulling teeth from the HOA management company to get the info in my experience. In CA, the HOA finances are a mandatory disclosure and there's even a spot for them on the standard disclosure form. YMMV by state, of course. What isn't included by default, here, are important notices / minutes from the HOA. That can be like pulling teeth, definitely, and can have a ton of important information you ought to read to double-check whether the seller is straight-up lying to you on disclosures.
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Jan 24, 2023 19:38
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I want it to work that way too, but sadly I don't think it does. Sure we can deal our own cards, and at the end of the night we'll collectively go home with that much more money. But just because the house charges an exorbitant rake, doesn't mean people want to go play in the alley. I don't trust the people I play against in the casino, let alone out on the street.
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Jan 24, 2023 19:42
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QuarkJets posted:I'll tell two anecdotes The later almost sounds like someone planning to pull a bitcoin mining or grow op scam.
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Jan 24, 2023 20:06
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I could see the advantage in a highly competitive market paired with a cash offer but if the buyer was getting a mortgage I'd probably be a bit hesitant to deal with them. Not that a realtor is going to always be better to deal with but it seems more likely an unrepresented buyer will be less serious.
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Jan 24, 2023 20:06
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QuarkJets posted:I'll tell two anecdotes
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Jan 24, 2023 20:11
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QuarkJets posted:No, I'm not. Perhaps this is also a regional thing, but many listings I've seen and realtors I've spoken to here in CA split the seller fee between the two realtors involved. You'd save literally nothing on an offer from a self-rep'd buyer because your selling agent would just take the whole fee for himself instead. It isn't 3% to seller and 3% to buyer; it's 6% (give or take, YMMV if using a low-fee agency, blah blah) divided between the two.
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Jan 24, 2023 20:38
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Sundae posted:Perhaps this is also a regional thing, but many listings I've seen and realtors I've spoken to here in CA split the seller fee between the two realtors involved. You'd save literally nothing on an offer from a self-rep'd buyer because your selling agent would just take the whole fee for himself instead. It isn't 3% to seller and 3% to buyer; it's 6% (give or take, YMMV if using a low-fee agency, blah blah) divided between the two. Yeah, that’s my experience too. The seller guarantees the agent the 6% and the sellers negotiate with other agents over how much of that 6% they can keep. In some spots I’ve seen frustrated agents kick in part of their fee to buyers or sellers to get things across and stupid poo poo (minor fixes, broom sweeping, staging costs) can, but is not always included in that fee.
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Jan 24, 2023 21:10
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My agent went on a trip out of country the week before closing and said he would delegate a replacement for any outstanding items but he didn’t. Stopped responding to emails and texts for the most part. Pretty much left us on our own to sort poo poo out, including wresting missing documents from the HOA. Definitely gave me an appreciation for how easy his job is. He showed up at closing with a sun tan to close the deal, though. I give him a D-.
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Jan 24, 2023 22:14
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kreeningsons posted:My agent went on a trip out of country the week before closing and said he would delegate a replacement for any outstanding items but he didn’t. Stopped responding to emails and texts for the most part. Pretty much left us on our own to sort poo poo out, including wresting missing documents from the HOA. Definitely gave me an appreciation for how easy his job is. He showed up at closing with a sun tan to close the deal, though. I give him a D-. I wonder if it was on purpose so he didn't have the share the commission any colleagues. At that point why didn't you call his brokerage to force the issue?
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Jan 24, 2023 22:25
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We lost at least one bidding war because our agent was on a plane to, I think Mexico. Then he thought our bid for another house was too low and... I'm not convinced he even sent it to the realtor. We fired him after that (had done, I think, 5 or 6 offers at that point with him), got a different agent who we got an offer accepted after bidding on two houses and would show up at 8pm on a saturday night to do a showing. Fire your agents early and often.
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Jan 24, 2023 22:29
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the point about real estate agents being largely worthless isn't in individual transactions, its that they've essentially baked a 6% price increase across the market. they might have been more valuable, say, in 1995, but in 2023 in general most of your searching is being done yourself through Zillow, and all the legal elements of an offer should (and would be) better handled by an attorney, which you have to hire anyway for closing, they are essentially a parasite middleman increasing the cost of homes
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Jan 25, 2023 00:25
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Upgrade posted:the point about real estate agents being largely worthless isn't in individual transactions, its that they've essentially baked a 6% price increase across the market. they might have been more valuable, say, in 1995, but in 2023 in general most of your searching is being done yourself through Zillow, and all the legal elements of an offer should (and would be) better handled by an attorney, which you have to hire anyway for closing, they are essentially a parasite middleman increasing the cost of homes
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Jan 25, 2023 00:28
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Dik Hz posted:The average buyer is too dumb to buy a house without a real estate agent. I actually kinda believe this, but the whole 'We are taking 5% off the top to navigate a process and maybe fill out some paperwork' is highway robbery. Real Estate Agents could be useful, but the cost of them is way, way out of band.
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Jan 25, 2023 00:31
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There is a lot to coordinate and if your agent isn't helping you do that, your agent isn't good. I had difficult sellers that basically offered zero time for trades to perform detailed inspections and write up estimates. My agent was good and took care of coordinating the people I picked with the sellers and she'd tell me "be there at x on y". There's no way I would have been able to get it all coordinated in a timely manner on my own. Now, did that earn her $10k? I don't know, but that's what she got. I used her on the selling side before that, too, and she definitely earned her pay there (it was quite a bit less). She was on top of the seller's bank and keeping things moving there, since it was a quick close. I did make it easy on her by moving out and having it empty before we listed it. If a transaction goes smoothly, an agent is useless, never use one. As soon as you encounter difficulties, a good one can be invaluable, always use one. I'm not very organized, and was single when buying, and I think I'd use an agent again if I ever buy single again. It would be different with a partner to share the effort with, but all my buying and selling has been done when I'm single.
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Jan 25, 2023 00:38
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It would be nice if their pay wasn't based on the sale price of the home, it's such a bizarre way to get paid in the first place. Like is selling a multi million dollar mansion that much more difficult than a $200k home? It also incentives the sale at the highest possible price, so the buyers agent probably isn't going to be pushing to get the best value for their client.
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Jan 25, 2023 00:44
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Canine Blues Arooo posted:I actually kinda believe this, but the whole 'We are taking 5% off the top to navigate a process and maybe fill out some paperwork' is highway robbery. Real Estate Agents could be useful, but the cost of them is way, way out of band. So out of curiosity I used the FRED data to estimate how many homes a Realtor(R) needs to sell per year taking 3% as their split to equal the median household income, just to sort of get a ratio and up until 2020, it actually stayed pretty steady. 1990 - 6.6 homes 2000 - 6.7 homes 2010 - 6 homes 2020 - 6 homes It's really only been in the past year with the insane bubble that the 3% cut seems high
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Jan 25, 2023 00:53
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Perhaps their compensation could be a lower % of the sale price, with the expectation that buyer & seller leave a tip?
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Jan 25, 2023 00:54
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It's a bizarre situation because any random client could require a ton of work or almost no work. My buyer's agent spent 8 months taking us to houses every other weekend, for ultimately $7200 in 2009. He probably had another client the same week he picked us up who picked the second house they saw, offered list price with no contingencies, won it, and paid him 3% on $800k for his six hours of work. But since the seller is paying the buyer's agent, it doesn't make sense to try and submit a bid with an hourly rate attached where some bidders have run up a hundred hours of work and others have almost nothing. Sharing a commission means the seller has a fixed, fairly knowable cost for paying the agents. If sellers agents got percentage commissions but buyers agents actually cost buyers money, fixed or hourly, that might be a big burden on some buyers, and it'd probably also make it far more attractive to work as a seller's agent only vs. taking on buying clients. If we start with the premise that most buyers and sellers need someone to help them through the process, how do you guys think they should ideally be paid?
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Jan 25, 2023 01:13
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Leperflesh posted:If we start with the premise that most buyers and sellers need someone to help them through the process, how do you guys think they should ideally be paid? Well house prices increased much faster than wages so maybe the agent commission rate should've decreased at some point.
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Jan 25, 2023 01:22
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PerniciousKnid posted:Well house prices increased much faster than wages so maybe the agent commission rate should've decreased at some point. If agency rate was responsive to supply and demand, then in theory there'd be a glut of people seeking that high wage and competition would drive down that wage. Presumably the commission rate is being supported by the cartel-like behavior, but even when a company like Redfin thumbs its nose and intentionally lowers commission rate, it doesn't seem to have forced the rest to follow suit.
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Jan 25, 2023 01:25
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Canine Blues Arooo posted:I actually kinda believe this, but the whole 'We are taking 5% off the top to navigate a process and maybe fill out some paperwork' is highway robbery. Real Estate Agents could be useful, but the cost of them is way, way out of band. I tried buying without an agent and wife said no, and she's much smarter than I am So clearly half of 5% is still the market rate, as I tried explaining this to her. She did not want to take on unplanned risk of me loving up the deal as a first time home buyer
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Jan 25, 2023 01:34
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The agent doesn't get the full 2.5% for selling/buying. The agency (whose agency license they work under, in addition to their on REA licence) takes their cut, I think almost half of their payout, for junior, and somewhat less for senior REA. From what I understand it is a process of several (more than 3) years to graduate to senior. This is all hearsay though, may not be true.
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Jan 25, 2023 01:42
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Hadlock posted:I tried buying without an agent and wife said no, and she's much smarter than I am  My buddy is taking another whack at it. I estimate sellers would describe him as something other than reasonable, so add an anecdote to that side
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Jan 25, 2023 01:43
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How do you even schedule showings without an agent?
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Jan 25, 2023 01:53
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PerniciousKnid posted:How do you even schedule showings without an agent? Call/email the listing agent, assuming you meant as the buyer.
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Jan 25, 2023 01:55
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Hadlock posted:The agent doesn't get the full 2.5% for selling/buying. The agency (whose agency license they work under, in addition to their on REA licence) takes their cut, I think almost half of their payout, for junior, and somewhat less for senior REA. From what I understand it is a process of several (more than 3) years to graduate to senior. This is all hearsay though, may not be true. Except that some agents are independent rather than working for a brokerage (note the confusing use of that term), but they still collect the same cut. Also in my experience the brokerage adds very little value to the process. They supposedly help the agents get leads, but people don't call up Coldwell Banker and say "I need an agent," they get a recommendation for a specific person. And when your agent goes on vacation gently caress no nobody at their company fills in they just let you spin int he wind. Maybe they provide some standard forms, some software, a group discount on the MLS subscription? I dunno I'm skeptical. Leperflesh fucked around with this message at 02:10 on Jan 25, 2023 |
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Jan 25, 2023 02:07
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Popete posted:It would be nice if their pay wasn't based on the sale price of the home, it's such a bizarre way to get paid in the first place. Like is selling a multi million dollar mansion that much more difficult than a $200k home? Iirc the studies tend to show that agents don't push for high prices but fast easy transactions. A 10% higher sale price boosts their income by 10%, but if it took twice as much effort their hourly income is still down by nearly half. When they sell their own houses they tend to keep them on the market longer and secure higher sales prices, and I'm sure that they spend more time bargain hunting when they buy.
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Jan 25, 2023 02:11
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Leperflesh posted:Except that some agents are independent rather than working for a brokerage (note the confusing use of that term), but they still collect the same cut. it's been a couple of years since I looked into this, but I think all real estate agents in CA need to operate under an agency license. i could be wrong. i can't imagine anyone would knowingly work for an agency in the internet age if they didn't absolutely have to
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Jan 25, 2023 02:52
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Shifty Pony posted:Iirc the studies tend to show that agents don't push for high prices but fast easy transactions. A 10% higher sale price boosts their income by 10%, but if it took twice as much effort their hourly income is still down by nearly half. I know most of these real estate YouTubers suck, but I find the guy below to be somewhat credible. He has done a couple videos showing how the negotiation works atm it feels to back up what you are saying. https://youtu.be/xYl7cc8nc_4
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Jan 25, 2023 03:32
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Hadlock posted:it's been a couple of years since I looked into this, but I think all real estate agents in CA need to operate under an agency license. i could be wrong. i can't imagine anyone would knowingly work for an agency in the internet age if they didn't absolutely have to Looked it up to get my facts straight: in CA you can be a "real estate broker" which allows you to work independently and/or hire agents to work for you/your business, or, you can be a "real estate agent" which does require you to work under a supervising broker. Brokers have to pass more classes (8 vs. 3 for agents), and either have 2 years of experience as an agent or get a bachelor's degree with a major or minor in real estate. Brokers also need a higher grade on a harder test. In the common parlance, though, most people make no distinction between them and just refer to their "agent" without specifying that actually they hired a qualified broker. I'm sure this is all different from state to state.
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Jan 25, 2023 04:03
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