Hello,

I need some input on "buyers" representation I interviewed today.
This guy was referred by the www.naeba.org
I checked him/his company out on the BBB.org & did not see any negativity.

I'm looking at a property (co-op) in Queens New York.
Its $159,000 & $855 in maintenance including gas/electric.

After meeting with this gentleman (he was very late), I explained to him that I'm was looking to situate my parents in more safe dwelling as I leave for school.

He was somewhat unprepared for our interview stating "research was done on the property but I left it home". We pulled up the property on his PC & he made some calls etc.

I told him the target price I'm seeking (under $200,000), & I observed his method for searching properties on the PC, which was for $220,000, he was confident he could negotiate the price down.

Regarding the fees. He carries a 3.5% fee payable from the purchase price.
He wants a initial fee of $495.00 upfront in the form of a check which will not be cashed until I agree to use his services to acquire the property.
This $495.00 will be subtracted from the 3.5% commission.

After we had gone through the minutia details, he states that he would assign one of his employees to handle my acquisition of the property.
I though I'd be dealing with him, not a employee.


I've got a few other agents to interview, but would very much appreciate and critiques regarding the above situation.


Regards
Fess

Fess,

The fact that he pulled more expensive properties is o.k. My problem is that it sounds fishy to write this guy a check. Maybe that's the way it works in NY. It is different here in Atlanta. We sign agency agreements between buyers and agents or sellers and agents. Are you familiar with his brokerage? I would never leave my paperwork at the office either. Very irresponsible. Perhaps you could go online and find a 2nd agent that you feel more comfortable with.

__________________
Ryan Ward, REALTOR® - Keller Williams Realty Consultants. (404) 630-3187
Atlanta Real Estate - My featured area is Alpharetta Real Estate and it is where I call home. Read my Atlanta Real Estate blog.

Mr. Ward

Thanks for the input.

I agree. But everything in New York is dishonest & nobody can be trusted. Underline reason for my high blood pressure.
But your response tells me that this is not common pratice.

I have no idea who this guy is. But as stated in the initial post, he was recommended by www.naeba.org which I contacted.

www.naeba.org also recommend another gentlemen whom I will interview Friday. This will be a good time to compare their fees/workflow/competence.

The whole interview was very disorganized, full of interruptions etc.
Was very annoying to show up at his office to find no one there at the aggreed upon appointment "time". I only went back to the office 35 minutes later to leave a note that I came, that's when I saw some one was there.

Wow Wouldnt that be cool if people had to write you a check for 500 dollars before they even found anything? LOL Doesnt work that way in Utah for SURE!

I don't understand why it is "fishy" to write a check? Is it "fishy" to write a lawyer a check? Or, for that matter, a roofer?

I think a pre paid fee is just a smart way to avoid a "conflict" of interest caused by the agent trying to "close" you on a purchase so he can get paid? On a scale of 1 to ten how serious are you about buying? The more serious you are, probably the lower you could negotiate that up front fee. Sort of the opposite of a seller offering a house for sale at a firestorm price. The seller's agents are more willing to cut their fee for a sure sale; for an overpriced one though, not likely. But then again, if you are that certain you are going to buy, you certainly don't want a seller to see that you are that motivated, especially in a buyer's market. A buyer broker helps you to keep your cards close to your vest

$495 is pocket change as far as earnest money goes, which is sort of what the fee really represents. Only in some bizarre circumstance would a seller's agent let a seller of a 200k house get their property tied up with only a $495 earnest money deposit.

Do you want the guy to work for you? Maybe make him a counteroffer to pay him hourly for his time? Seller's agents say they will do the services for free but they are really trying to "sell" you a house. You aren't paying him the entire fee up front so the earnest money doesn't totally eliminate the potential for him to try and "sell" you though.

Perhaps your referal source could be better. Let me try a search....better yet, do a google search for new york city real estate agents and speak with 2 or three on the phone. Ask them the questions you have asked here on this forum and see if they can give you good, honest answers. A good real estate agent should be a good educator as well as this is one way of determining of they have a reasonable amount of knowledge and/or experience to help you. After you speak with 2 or 3, you should have a good idea of who will perform their due diligence for you.

__________________
Ryan Ward, REALTOR® - Keller Williams Realty Consultants. (404) 630-3187
Atlanta Real Estate - My featured area is Alpharetta Real Estate and it is where I call home. Read my Atlanta Real Estate blog.

Earnest money is one thing. This would be like me asking a buyer to hand me a check before I show any houses to them. You certainly could do it - and there is a place in the buyers agency agreement to put the money in. I just would not pay an agent nor would I ask to be paid. It just isn't how my experience has shown it to work. It can be done, but, it shouldn't have to be done. The agent will get paid when the deal closes. Did he tell you what happens to that money if you don't buy a house?

__________________
Ryan Ward, REALTOR® - Keller Williams Realty Consultants. (404) 630-3187
Atlanta Real Estate - My featured area is Alpharetta Real Estate and it is where I call home. Read my Atlanta Real Estate blog.

Here in Chattanooga we are allowed to ask for a retainer fee similar to what this buyers agent asked for. It applies to the earnest money if they make an offer.

__________________
Ethan Hall / Chattanooga Real Estate & Relocation
423-488-8834
Chattanooga Real Estate
Realty Executives Chattanooga
Ethan@RealEstateByEthan.com

Cedar, thanks for responding....
Sounds like anywhere else is better that NY.




Hey RESynergy, thanks for contributing...
This guy has 15 years experience & its his company. So maybe the retainer fee is a way to avoid conflict as you suggested.
Scale of 1 to 10, my intent on buying is a 15!

Do I want this guy to work for my? I don't know unless I've had other agents to compare from.

His 1st impressions were fair but not impressive.
Most of the things he said I already knew (3 realestate books in my head), the one thing I did learn was the Co-op prices are neogitable! He stated that it was possible to get the price down if the owner wasn't tighfisted.


Mr. Ward thanks for responding...
There are tons of realestate agents in my neighborhood, but I'd only send my worst enemy to them.
I believe NY has a threshold of service that needs to be filtered when searching for representation. I used naeba.org as a filter. Google pulls lots of agents, but people lie & yeah they do lie on their websites (I know, build a few).


I did ask a series of questions from my books to the agent during the inteview & they were more or less fairly answered.

I asked this question & he said the check would be returned. But I could just put a "stop payment" if is was not or he dragged his feet to return it.



Mr. Hall, thanks for responding...
Well that I see some similarities, its kinda eased the sting.


Appreciate all the info guys, its kinda scary going into this area when I'm not a pro.

Fess

Actually there are lots of top producing agents that require a retainer from buyers. I have talked with at least 15+ of them over the past couple of years from all parts of the country.

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