real estate: contact seller's agent directly?

[bnc]

If I remember correctly there are a few Realtors around here, so hopefully I can borrow a bit of wisdom.

I'm looking for a house and found one on my own that deserves serious consideration, but I don't have an agent.

I was thinking of working directly with the listing agent and trying to negotiate a fee reduction. For instance, instead of 6% split between 2 buyer's and seller's agents, reduce it to ~4% (for example) but the seller's agent gets it all since I already found the house. Is that an acceptable thing to do, and would that negotiation best take place up front or saved until the end to close the deal?

Is there some other process, or standard fee, when the buyer's agent happens to be listing the house the buyer ends up wanting? What I mean is, could I hire the listing agent as my buyer's agent and then let them "find" the house for me.

I also thought of just searching around for an agent that is willing to split their half of the fee with me if I let them run the paperwork (no house hunting involved). Granted, the seller's agent has the best customer ratings I've seen around here, so I would literally be cold calling other agents or would ask the bank/fcu if they can recommend one.

It seems a bit odd to me to have one person representing both buyer and seller, but even with 2 agents they both benefit most from a sale taking place in the shortest period of time and at the highest price, so I'm not sure how much that matters.

Thanks in advance for any advice.

[Vol Texan]

The seller's agent is just that: a SELLER's agent. He or she has only the seller's best interest at heart. They don't care about you or your interests. I recommend having your own agent (and no, I'm not in the real estate business, but I recently had a transaction where the agents were a bit too close together, and I felt like my interest was not being represented well enough).

It's like going through a legal hurdle when only the other guy has an attorney, but you think that the attorney is neutral. Don't do that - they represent the other guy, and you can never forget that.

[Jumping Frog]

The seller's agent is just that: a SELLER's agent. He or she has only the seller's best interest at heart. They don't care about you or your interests. I recommend having your own agent (and no, I'm not in the real estate business, but I recently had a transaction where the agents were a bit too close together, and I felt like my interest was not being represented well enough).

It's like going through a legal hurdle when only the other guy has an attorney, but you think that the attorney is neutral. Don't do that - they represent the other guy, and you can never forget that.

Although your basic point about seller versus buyer and agency is valid, you can hire an experienced real estate attorney to perform the actual transaction a heck of a lot cheaper than paying the commission to a real estate agent.

To the OP.

I'd give a written offer for whatever price you think is the correct price, noting that the price is set with the expectation that only a 3% commission is to be paid. Note that the "correct price" may in fact have substantially more than a 3% cut.

Real estate on average sells at roughly 95% of asking price, meaning you should walk in the door already expecting at least 5% cut. Thus, it is reasonable to ask for 8% off while noting you expect the agent to eat 3% of that. Personally, I'd ask for 10% off and settle for 8%.

The other agent must present written offers to their client whether they like them or not. Then the amount of commission to be paid becomes a negotiation between the seller and their agent. In the end, you don't really care if the seller got a discount from the agent or not. You only care what the final price is.

[philip964]

Find a house you like, buy it at a good price.

You should have a Buyer's agent representing you. Not the Seller's agent. A Buyer's agent can give you information you will not be able to get anywhere else, such as similar actual sale prices in that same neighborhood. A buyer's agent will want you to sign a contract saying for a period of time you are their agent and any property you buy that is listed with MLS, they will get their share of the commission. Make sure you like the person.

Here is the problem with trying to lower your cost by not being represented by an agent: The seller has already signed a contract with the real estate agent saying they will pay a probably 6% commission if the house sells for a certain period of time.

If you are unrepresented the seller's agent receives the entire commission. If you are represented by a buyer's agent, the buyers agent will receive one half or what ever they agree.

There is no condition in the listing contract for the commission to be lowered. You would have to wait until the listing contract expires. If you contract the owner directly and it is near the expiration. You could buy it after it expires without a commission. However, most sellers are uncomfortable with selling to a stranger without representation (there are many scammers out there, how do they know you are not one, think Craig's list). They also may want to reward their agent who may have helped them a great deal over the listing period.

All the real estate contracts that are required by law that the real estate agents use are on line at the Texas Real Estate Commission website. You are not required to use them, as you can write one yourself (not recommended and the seller's agent might not accept it) or you can use an attorney. You really do not need to be represented. However, if you are not experienced at buying real estate, this could not turn out well for you.

You are a principal in the transaction. You can legally receive part of the commission. But normally for this to happen you will need a friend or a relative who is a licensed real estate broker and they agree in advance in writing to share the commission with you.

Buying without an agent helping you is usually used when you approach a property owner who maybe interested in selling, but has not hired a real estate agent yet to sell their property. Here their selling costs would be lower as an incentive to sell to you.

A house is the biggest investment you will ever probably make. Having an experienced person there to help you make that decision is not a bad thing, especially when the seller has already agreed to pay their fee.

[SewTexas]

bnc,

what area are you looking at? it may be possible one of us can point you in the direction of an agent? or even a neighborhood?

[The Annoyed Man]

Trying to save money in RE or legal fees by representing one's self is simply begging for a fleecing. And....no offense meant to any of the attorneys on the board, but unless you're practicing RE law, you don't know as much about RE transactions as a licensed RE agent does. To the OP, keep in mind that the seller's agent has no obligation to make anything advantageous to you. He or she will only grant you a concession if it is favorable to their client to do so. That is their job, and they have a fiduciary responsibility to best represent their client, not you. If that means taking advantage of you, they not only WILL do it, they SHOULD do it; because if they don't, then they are not best representing their client's interests. I'm not suggesting that the seller's agent should behave unethically.......in fact, they have a high ethical threshold to meet in order to keep their licenses.....but that does not mean that "ethical" and "helpful to you" mean the same thing.

Get your own agent.

[WildBill]

Trying to save money in RE or legal fees by representing one's self is simply begging for a fleecing. ... Get your own agent.

At the risk of sounding trite "penny wise and pound foolish".

[Charles L. Cotton]

It is common for a Realtor to have both sides of the deal in residential listings; both buyer and seller. Most will require the buyer to sign an acknowledgement that they represent the seller and not the buyer, to make sure the buyer is aware. For this reason, one Realtor representing both buyer and seller probably occurs most often with sophisticated buyers.

Certain information must be disclosed to buyers and this doesn't change based upon the number of Realtors involved in the transaction. Plus, the buyer can ask the Realtor for a listing of other similar properties in the area. The main difference you will see is that a seller's agent won't give advice as to what offers should be made or "trade-offs." That is going to be left up to the buyer and this is why we are usually talking about sophisticated buyers.

If a prospective buyer approached a listing agent and suggested reducing the commission, the agent may well refuse to deal with the buyer. Although no conflict of interest would exist, that fact pattern could certainly give rise to the appearance of a conflict. I'm not a Realtor, but my wife is, and if she were to ask my advice as an attorney, I'd tell her to stay well away from that buyer, unless they get their own agent. Most listing contracts have a "protection period" of some duration that requires a seller to pay the contractual commission if the property is sold to someone whom the listing agent brought to the seller. So if the listing agent shows the home to a potential buyer, the "protection period" clause will be triggered.

Chas.

[bnc]

I appreciate the responses, everyone.

I contacted a couple of agents today and one of them said that the house I was interested actually does have a contract on it since they had a client get outbid on it. So, this issue is most likely past.

Having thought over all the posts here you guys have convinced me that having an agent legally representing only me is a good idea, so when the time comes I'll go that route. I'm not in a hurry at all and wasn't seriously looking when I stumbled across the house in question, so no rush.

Thanks again.