Low rate Real Estate Buying/Selling Agents

[randfish]

I've noticed that at sites like ZipRealty.com and in several private ads, there are independent real estate agents asking 1.5% commission instead of 4-6%. What's the catch?

If I'm interested in buying a home, should I contact these people?

[Falcon Living]

Where to start???

If you are buying a home, using a realtor as a buyer's agent is free. Buyer's agents receive their commissions from a contract between the seller and the seller's agent with no cost to you.

About the percentages you are talking about, they are the selling commission rates if you are a seller.

Zip Realty Booo ... The catch is the underlying iddy bitty tiny thing that says if the listing agent or the seller finds the buyer the commission is 1-1/2 percent :-) . With Zip realty, there is absolutely no advertising. Their entire infrastructure depends on being a buyer agency rather than a selling attitude as they get their leads by purchasing them from other sites. When you are buying a home, use a buyer's agent because a seller's agent is legally bound to represent the best interest of the seller not yours. So, you will be worse off by going solo and probably paying more for a house in less than favorable terms. Yes, use a lawyer and a home inspector as well.

[randfish]

Falcon,

Thank you very much. What would be a process you would recommend for selecting a buyer's agent - I've read lots of conflicting info online.

[kensmith]

If I was looking for a buyers agent I would interview a few of them for starters, find them from the internet (I would want an agent that would use e-mail for the little stuff).

If they don't explain why working with a buyers agent (legally have to represent your interests) is important and ask for you to sign a buyers agreement move on. It takes a level of professionalism to ask a buyer to sign the BA that many just don't have. Plus in many states without the signed agreement they will be working for the seller not you.

During the interview I would ask what areas they specialize in, before you tell them exactly where you are looking, and if the area doesn't match again time to end things. There are so many details that an agent ethically and legally should know about, pending zoning issues, potential tax increases, is a road widening that will wipe out 1/2 of your yard, ..... but many agents work outside of their area and have no idea about these items. You want your agent to know all about the area you are moving to as this why they are earning the pay of a professional and not just some $8 a hour person to open the door for you.

Side note I would NEVER hire an agent that is willing to rebat a big % of their commision, they are that quick to give away their pay could you emagine how quickly they will give away thousands of your money come negotiation time. You have to rely on their "expertise" to figure out how much you are going to offer and they are going to recommend what to do with your counter-offers. You want someone that has great negotiation skills.

This will not be popular - the agent should have at least 20 closed transactions to help ensure a smooth process. Some agents (very few) will be great after a few transactions, but most need the practice of doing some deals, do you want to be the test subject?

They should offer some sort of a buyers step by step guide. This shows that they have put some effort into thinking about what a buyer may need, again just a level of professionalism I would expect.

This is a good starting point IMO. I'm sure I will get an earfull from a few newer agents, but sorry to say as an agent that trains new agents I know how little you know.

[randfish]

Thanks for the excellent advice, Ken.

Your opinion, then, is that it is worthwhile to spend the additional 1.5% on commission in order to have knowledge, experience and a better negotiator. Do you have any recommendations of where to start - should I browse the Internet for agents claiming to specialize in an area then interview by e-mail?

[kensmith]

The internet is a good place to start IMO. It will help you find an agent that is using technology to save you time and make the process smoother. There are also great agents that aren't in the top20 search results, so referrals are also a great way to find an agent.

I have had buyers interview me over e-mail in the past as they where relocating from out of state or had work hours that made it hard to get together. It works pretty good if both the buyer and agent check their e-mail on a regular basis. You can use the e-mail to screen a few agents, but make sure to have a face to face as you need to make sure the agent and you can stand each other. Lots of personalities and they just don't all match.

[Falcon Living]

Make sure you are not working with an agent that sells a lot of homes. That person can be a good seller but not necessarily a good buyer's agent. You need a good negotiator more than anything else. Also, a person that sells a lot of homes will not be spending so much time with you because being a buyer's agent is more work than a seller's agent and will probably get an assistant to go out with you.
Mert

[randfish]

Mert & Ken,

Thank you. I will be very careful to try to select someone. Is it important to hav a person who is very well versed in a particular neighborhood that I'm looking at, or will any good buyer's agent be able to do a good job in any area?

[Falcon Living]

In Chicago, I am trying to expand and recruit agents from all parts of the city. While a good database research is all you need in most cases through MLS, a local agent will know things in more detail. I agree with Ken in that you should ask them first before telling them where you are looking for. Don't let the realtor control the initial conversation. He will know exactly where to search for you depending on your needs without wasting your time.

Also, a specialized agent will tell you where the good spots are, what the valuation trend is, new developments, schools and all types of little bit of information that is invaluable to you. You have to judge the agent's selling ability.

[ResaleBroker]

Hi Guys,
Quick question... what percentage of today's "Buyers" would you estimate invest the time/effort you suggest when choosing an agent to represent him/her?