My wife and I have been working with a realtor we found on RedFin for the last 3 months. We are looking in a highly sought after area of town (think historic houses, old growth trees, sidewalks, walk zone to schools, downtown, etc). However, she hasn't done much of anything other than setting up an MLS email alert with our criteria.
Being mustachian, we're trying to think outside of the box, talking to neighbors about possible moves, checking craigslists, listservs, putting letters in mailboxes, etc.
Through our efforts, we found a promising lead for a house with a rental unit in the basement in an ideal location. My question is, since we did ALL of the legwork to get a lead without the realtors help AND we never signed a contract to work with her, why should I let her in on the sale?
The seller will not pay any agent fees, so as buyers, we would be on the hook for around $10k to pay for the realtors services.
We already know the comps and we've rented in the neighborhood for a year. We know the area very well and feel very confident in its future. The house is in the priority walk zone for one of the best/most sought after public Montessori elementary schools in a city that is going through a revitalization.
I guess what I am really trying to ask is, what justifies the $10k (what services do they render that is that valuable?!) and can we get away without needing a realtor?
Side-note: We have been pre-approved for a mortgage much larger than the asking price, have more than 20% for the down payment and have excellent credit.
Hi there - I'm licensed in real estate in AL and would love to help you work through this decision. Let me say up front that I just hold a license to aid my own investment activities, I fully support competent DIY efforts, and I have nothing against people deciding to do these things on their own.
Since, as you stated, you signed no contract (in this case, it would have been a Buyer Agency Agreement, or some similar title), you have no obligation to go through this transaction with this agent. In fact, you have no agent - just a contact at an agency who would like to be your agent. Client/agent relationships can only be established by express written consent of both parties.
That said, that doesn't *necessarily* mean you don't want this agent's help. At this point, they can add value by helping select a closing venue (depending on your locale, attorney or title company, etc), recommending a good home inspector, and generally helping you keep your ducks in a row before, during, and after closing. If you have full confidence in your ability to execute all of that without hand-holding, then don't bother. If you think some advice is worth paying for, you might try to negotiate a reduced commission in exchange for the minimum services you require. Generally speaking, all commissions are negotiable; my state explicitly forbids the setting a "market rate", as it is considered price-fixing. I have a friend listed at 1% right now and could go lower.
I do find that most people underestimate the legwork an agent does (most of it is not while they're physically with you) and this results in unrealistic expectations about negotiating commission. Are some of them just greedy snobs who want 3% even if it takes 2 hours of work? Absolutely. Is there more to it than that, and are there agents who truly bust their ass and take pride in their work, such that they don't want it cheapened by haggling? Also true.
A final note: it is extremely rare to encounter a seller - even FSBO - that is completely unwilling to pay any commission. Have you raised the subject and made absolutely certain that they won't throw a bone? YMMV, but sellers who refuse agent interaction can be difficult to work with, not just on that issue, but minor hitches (and most sales have them) like inspection-based repair requests, or other little snags normally managed by agents. Caveat emptor, that's all I can say.
If she did NOTHING to help you with this, then no, you are not obligated by law or conscience to work with her.
Hello, Ohana! Nice name. Kailua kid here.
Since they did not sign a contract, that is correct. Just keep in mind (in general, and in other situations) some buyer agency agreements identify a period of time during which any purchase - regardless of the agent's actual direct role in the transaction - is subject to a specified commission, which, if not paid by the seller, would be due from the buyer. We do see contracts written that way, so I always advise people to read carefully.