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I'm a licensed broker and one of the companies I own is a real estate brokerage. I made a very long response to the original poster (si2) before I realized tha

by Shooter 17y ago

I'm a licensed broker and one of the companies I own is a real estate brokerage. I made a very long response to the original poster (si2) before I realized that he is wanting to rent a home, not BUY a home or rent a commercial space. The realization that he is a residential renter could change my answer a bit, depending on his circumstances and his local market. Unlike with buying a home, you CAN - potentially - save money by finding the rental yourself. If buying, I always recommend an agent - with several important caveats. I'll revisit this thread again later, when I have some more time and maybe some more information has been posted. You give some great advice, brk, buy you should know that the average buyer's agent commission is 2.5%, not 1% or 'nothing." There are discounters that will give you around a 1% rebate on their commission in states where RE rebating is legal, usually subject to a minimum commission, but it is impossible to represent a buyer for 'nothing.' Most buyer's agents that will consider larger discounts are not really representing your interests, because they are either designated agents or (much worse) dual agents, who are just trying to eke out a bit more cash from the transaction that they might not otherwise receive. I can explain that in great detail when I have more time, if you're interested. In any case, you should know that people don't work for free, so you WILL pay for any services you use at some point in the transaction. Unfortunately, most consumers are woefully uneducated about real estate transactions, including important details about the principle of agency and commissions. My entire business model for our RE brokerage is built around educating the customer enough so that they don't get screwed over by agents or lenders. I would recommend that a buyer obtain representation from an EXCLUSIVE buyer's agent and to attempt to negotiate a commission rebate IF it is legal in their state and IF they will actually use less of the agent's time by being a savvy, educated shopper. I suspect most HN readers are savvy, educated shoppers who can use the web to save time and trouble for themselves and their agents, so most should be able to get a commission discount/rebate. I wish real estate rebates were legal everywhere, but some states have allowed lobbyists to overpower common sense and consumer rights.

brk 17y ago
You give some great advice, brk, buy you should know that the average buyer's agent commission is 2.5%, not 1% or 'nothing." I know this, but most listing agents will cover some or all of the buyers broker fee, so the actual buyer (typically) ends up paying somewhere between nothing and 1%. At least this is how it's worked on the 4 properties I've bought in the last dozen years. I didn't realize that he was renting instead of buying. My original advice was 100% geared towards buying. I've never rented, so have no good advice in that regard.
- Shooter 17y ago
  "most listing agents will cover some or all of the buyers broker fee, so the actual buyer (typically) ends up paying somewhere between nothing and 1%" One of my goals in life is to correct this misunderstanding among buyers. BOTH the buyer and seller pay for the agent services if they are used. Believe me, it is not your fault in thinking that the listing agent and/or seller pays for the buyer's fee, because that is the way the paperwork is worded and that's what everyone says, but it is NOT the complete story. Even most real estate agents don't seem to completely understand this fact. I want people to not get lost in semantics and to understand that, as a buyer, you WILL pay for any services you use (and you may even pay for services you don't use if you're not smart about it.) In the long run, you will pay even more than the seller. The fact that the HUD-1 form creates a fiction doesn't mean that you don't pay. If you REALLY understand how everything works, you can get a real value and service for what you pay, saving money in the overall process. If you don't understand how it works, you will pay for an agent who may not have your best interests at heart, and not even realize that you paid for this dubious benefit.

by Shooter 17y ago

brk 17y ago

You give some great advice, brk, buy you should know that the average buyer's agent commission is 2.5%, not 1% or 'nothing." I know this, but most listing agents will cover some or all of the buyers broker fee, so the actual buyer (typically) ends up paying somewhere between nothing and 1%. At least this is how it's worked on the 4 properties I've bought in the last dozen years. I didn't realize that he was renting instead of buying. My original advice was 100% geared towards buying. I've never rented, so have no good advice in that regard.

Shooter 17y ago
"most listing agents will cover some or all of the buyers broker fee, so the actual buyer (typically) ends up paying somewhere between nothing and 1%" One of my goals in life is to correct this misunderstanding among buyers. BOTH the buyer and seller pay for the agent services if they are used. Believe me, it is not your fault in thinking that the listing agent and/or seller pays for the buyer's fee, because that is the way the paperwork is worded and that's what everyone says, but it is NOT the complete story. Even most real estate agents don't seem to completely understand this fact. I want people to not get lost in semantics and to understand that, as a buyer, you WILL pay for any services you use (and you may even pay for services you don't use if you're not smart about it.) In the long run, you will pay even more than the seller. The fact that the HUD-1 form creates a fiction doesn't mean that you don't pay. If you REALLY understand how everything works, you can get a real value and service for what you pay, saving money in the overall process. If you don't understand how it works, you will pay for an agent who may not have your best interests at heart, and not even realize that you paid for this dubious benefit.