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I think for buyers, agents make a lot of sense. Largely, because of how the system works, they're free to buyers, as the seller's pay the agent fees. The probl
by ssharp 14y ago
I think for buyers, agents make a lot of sense. Largely, because of how the system works, they're free to buyers, as the seller's pay the agent fees.
The problem is that the seller's must pay for both the buyer's agent as well as the seller's agent. And in order to get into MLS, you have to hire an agent to represent you. It's a horribly broken system where agents are essentially a cartel you have to do business with in order to sell your house. Everything has changed with MLS listings being online and so many real estate transactions have become boilerplate, with no major variables except price negotiation, which really isn't that difficult either.
If you're not familiar with the MLS system, it's something that is controlled by the Realtor association it's essentially a network of databases of every home for sale or rent that is represented by an agent. You have to have an agent in order to be listed that system and practically every real-estate website, including Zillow and Trulia, get the vast majority of their listing from the MLS systems.
Some smart agents realized how utterly ridiculous the role of the buyer agent has become in many situations (If you know the 80/20 rule, this is sort of the 99/1 rule: 99% of the value of a buyer agent comes from getting into MLS and it takes about 1% effort to do that). In response, they offer their services as "flat fee MLS" and they charge people a couple hundred bucks to play ball in the MLS system and you get to represent yourself in the actual sale process. You're paying $600 + 3% buyer commission, instead of a straight 5-6% total commission.
On a $300,000 house that will save the sellers $8,400.
- fourspace 14y agoQuick correction: only Redfin has MLS access (as they are a broker). As far as I know, Zillow and Trulia have very limited MLS access, and largely get their listings from the brokerages themselves. We just purchased a house and Redfin by and large had the most timely and accurate data. It turns out that my experience is backed up by evidence: http://www.inman.com/news/2012/10/3/redfin-study-knocks-zillow-trulia-listings-accuracy http://www.inman.com/news/2012/10/3/redfin-study-knocks-zill...
- rhplus 14y agoI think for buyers, agents make a lot of sense. Largely, because of how the system works, they're free to buyers, as the seller's pay the agent fees. Are they really free for the buyer, though? Isn't some of the commission fee being built subconsciously into the price that the seller lists it at? Recent downtown aside, the general upward trend of house prices must at least be buoyed up a bit by those commissions. Surely not every seller just marks the cost up as a loss. Plus, I've never been quite convinced that any buyer's agent would work as hard as possible to negotiate the price down if their commission is going to be a fixed percent of that price. There's zero incentive to get a better price and very infrequent repeat business from the same customers.
- dminor 14y ago> I think for buyers, agents make a lot of sense. Largely, because of how the system works, they're free to buyers, as the seller's pay the agent fees. When we bought our house we didn't use an agent. Our offer was instantly 3% more attractive to the seller. The seller's agent told us after we closed that there had been 5 other offers and the 3% put us on top. A better way to think of it is this: the party bringing the money to the table is the party that is paying for everything.
- treasdev 14y agoHow did you get into houses to view them without an agent to open the lockboxes? How did you assmble all the paperwork required for your states contract? I've long seen agents as unnecessary and would like to avoid one to make my offer stronger.
- dminor 13y agoSorry for the late reply - you can just call the seller's agent and have them show you around. We used a real estate lawyer to draw up the contract and to have someone we could ask negotiation advice from if we needed it. Far cheaper than the 3% cut. Be aware that in most agent contracts the selling agent is entitled to the full commission if there is no buyer's agent, so how attractive your offer is depends on the relationship between the seller and their agent. Also, every agent you meet will try to get you to use them as an agent, so make it clear you are acting without an agent.