Realtor Fees

[Cowspot28]

Hi,

I’m looking to buy a new house. The realtor in the area I’m looking charges $395 (paid by us) in addition to commission of 3% from the seller if we buy. There is no fee if we don’t buy in 6 months. She also wouldn’t email us MLS updates unless we signed a buyers agreement. Is this normal? We’ve only bought one other house and there were no additional fees outside of the 3% paid by seller, and we didn’t sign anything until she submitted an offer on our behalf.

Thanks!

[norajean]

Fees vary by location and are more negotiable than people realize. We like discount realtors like Redfin.

[Dancin'Dog]

Hi,

I’m looking to buy a new house. The realtor in the area I’m looking charges $395 (paid by us) in addition to commission of 3% from the seller if we buy. There is no fee if we don’t buy in 6 months. She also wouldn’t email us MLS updates unless we signed a buyers agreement. Is this normal? We’ve only bought one other house and there were no additional fees outside of the 3% paid by seller, and we didn’t sign anything until she submitted an offer on our behalf.

Thanks!

Instead of that, why not find the homes you're interested in and contact the listing agents directly.  After finding a house you like, negotiate the price as much as you can with the owner, and then negotiate the 6% (double fee for listing & selling) down to 4%?  The agent may not "like" it, but it's still better than the 3% that they'd get if you'd brought a buyers agent into the equation.  (Caution: you'd better know how to perform your Due Diligence) 


As a FSBO seller I've let the buyer's agents know that receiving their full 3% requires them to deliver a "full-price" buyer.  Negotiations go smoother when their paycheck is part of the equation. 


They may not appreciate it, but they respect it. 

[MainstreamContrarian]

That’s not normal in my experience.  Sounds like the agent is trying to get you committed to use them.  Some buyers look through an agent and then go out and buy the property on their own.  I would never pay the agent the $395, but I would be willing to sign a buyer agency agreement if they were a good agent.  You could shop around and see what other agents are telling you.

[Jon Bon]

As the others have said, fees are for sure negotiable. Here is a bit of an open secret that realtors don't love for you to know.


In most areas every single residential real estate deal is exactly the same. They literally all use the same contract. They fill in a few numbers differently, but they are fundamentally the same. Most relators don't have any actual "hard' skills. They are not CPAs, or attorneys, or financial advisors. They have a 2 week license from the local for profit community college. What realtors do end up doing is managing the emotions of their clients. They talk you through the process and act as a marriage counselor to couples.

Finding houses is easy, just go on the MLS (zillow realtor etc). Finding the contract also is pretty easy, its not the classified launch codes or anything like that. So once you have done those 2 things you have already done the majority of the work. Use a realtor if you want, but the internet plus being the DIY mustachian that you are realtors are not really needed at all, they are just a middle man taking value.

good luck YMMV.
 

[Dicey]

They have a 2 week license from the local for profit community college. 

In what state do you reside? It sure as hell doesn't work that way in mine.

There are a lot of ways to get screwed in Real Estate. Those looking to do so just love discovering inexperienced buyers who think they can do it better on their own.

A good realtor can be worth their weight in gold, in my actual experience.

That being said, I second the Redfin suggestion, as long as you vet the potential agent.

[Jon Bon]

They have a 2 week license from the local for profit community college. 

In what state do you reside? It sure as hell doesn't work that way in mine.

There are a lot of ways to get screwed in Real Estate. Those looking to do so just love discovering inexperienced buyers who think they can do it better on their own.

A good realtor can be worth their weight in gold, in my actual experience.

That being said, I second the Redfin suggestion, as long as you vet the potential agent.

My apologies I was wrong, they do have to get more education in my state. I looked it up, the are required to get three of weeks of classes at the local for profit community college.... :)

I definitely think their are times when a realtor can add value, I just think it is a rare occurrence. There are lots of other professionals involved who don't work on commission that are looking out for your interest in a RE deal that are much more valuable. Inspectors, the bank, lawyers, title company etc.

Maybe I should say realtors follow the 80/20  rule? 20% of realtors have 80% of the skills? Even that is a stretch for me to say, I've never met a realtor that I think would add more value than they take to a RE deal, but maybe that is just me.

[Metalcat]

They have a 2 week license from the local for profit community college. 

In what state do you reside? It sure as hell doesn't work that way in mine.

There are a lot of ways to get screwed in Real Estate. Those looking to do so just love discovering inexperienced buyers who think they can do it better on their own.

A good realtor can be worth their weight in gold, in my actual experience.

That being said, I second the Redfin suggestion, as long as you vet the potential agent.

My apologies I was wrong, they do have to get more education in my state. I looked it up, the are required to get three of weeks of classes at the local for profit community college.... :)

I definitely think their are times when a realtor can add value, I just think it is a rare occurrence. There are lots of other professionals involved who don't work on commission that are looking out for your interest in a RE deal that are much more valuable. Inspectors, the bank, lawyers, title company etc.

Maybe I should say realtors follow the 80/20  rule? 20% of realtors have 80% of the skills? Even that is a stretch for me to say, I've never met a realtor that I think would add more value than they take to a RE deal, but maybe that is just me.

Damn, where I live it takes upwards of a few years and thousands of dollars to get licensed in real estate.

[Jon Bon]

There is some sort of internship/sponsorship thing they have too do. I don't know how exhaustive that is.

However the point I am making is this is not even in the same ballpark as getting your CPA or other professional certification.  It is my opinion that realtors are in the business of managing your emotions to create a favorable outcome for themselves.

So OP just hear both sides. I clearly don't think they are necessary. But I have no doubt that they can help some people.

[Jon Bon]

A nice metaphor came to mind: Selling a car yourself versus trading it in. One is very easy, the other requires some work.

Cleaning up your car, vacuum, wash, wax etc. Then you have to post adds, deal with crazy people on craigslist. Change over the title, deal with large amounts of cash etc.
Versus a dealer who you just hand the keys too.

The difference in that work can be thousands of dollars. If it takes me 10 hours to sell a car, and I get $2000 more I just earned an incredible hourly rate.
How much work and research do you want to do? Like anything else you can DIY and save a bunch or pay professionals to manage your uncertainty.

[SndcxxJ]

Hi,

I’m looking to buy a new house. The realtor in the area I’m looking charges $395 (paid by us) in addition to commission of 3% from the seller if we buy. There is no fee if we don’t buy in 6 months. She also wouldn’t email us MLS updates unless we signed a buyers agreement. Is this normal? We’ve only bought one other house and there were no additional fees outside of the 3% paid by seller, and we didn’t sign anything until she submitted an offer on our behalf.

Thanks!

Just ask the agent to guarantee that they can help you purchase the same property for $13,000 less than without their help!
Or a different way of looking at it is that they would like to earn a commission of $13,000 more than purchase price.

[maisymouser]

Instead of that, why not find the homes you're interested in and contact the listing agents directly.  After finding a house you like, negotiate the price as much as you can with the owner, and then negotiate the 6% (double fee for listing & selling) down to 4%?  The agent may not "like" it, but it's still better than the 3% that they'd get if you'd brought a buyers agent into the equation.  (Caution: you'd better know how to perform your Due Diligence) 


As a FSBO seller I've let the buyer's agents know that receiving their full 3% requires them to deliver a "full-price" buyer.  Negotiations go smoother when their paycheck is part of the equation. 


They may not appreciate it, but they respect it.

Great advice. As a potential future FSBO that is a pretty cool tactic. I definitely feel like at some point our (buyer's) agent was just looking to get paid and was tired of dealing with us, it was ridiculously transparent that he wasn't really representing us like we had hoped he would. Now that I know skeeze-balls like him are out there I imagine that tactic works pretty well as a seller.

[secondcor521]

Here's the kinds of things realtors do around here:

Buyers

Educate you on the process
Find houses that meet your criteria
Arrange showings of those houses
Help you evaluate the houses
Help you write/fill out the contract
Manage the back and forth / negotiation
Coordinate appraisals and inspections
Assist a little with arranging financing
Coordinate and attend closing

Sellers

Most of the above
Photos and MLS access
Staging help if you pay extra

After buying four houses and selling three, I can DIY all of the above except MLS access, which I can get through a FSBO package.  Having sold one of my houses FSBO, I actually discovered that a realtor actually subtracts values in a few of the areas (because they just get in the way and are an extra step in the process so communication is slower and less clear).

[Villanelle]

I wouldn't commit to 6 months.  If I went on to buy a house they showed me, sure.  But I want to be able to sever ties with them if it ends up not being a good fit. I'd try to get them to agree to a month, with the option to extend if we worked well together, and with the agreement that if I bought after that month a house they'd showed me, they would still get the commission.  But 6 months?  No.

You can usually find MLS access for free.  (Sometimes you have to register with an email and then get inundated with spam, so use a junk email address.)  I think having an agent is valuable (for me) and wouldn't want to go agent-less, but if I found a house on my own and just wanted them to represent me in negotiations and the sale, I'd feel very comfortable making either a flat fee offer, or an offer where they get only a portion of the offered commission and I get the rest, since I did much of the work. 

[MissPeach]

I've bought or almost bought in 3 states and in 5 cities and haven't been asked to sign or pay a fee.

I recently had 2 agents. I realized the first one wasn't a good fit the day I first met him in person. The second one did for me in 24 hours what I waited on the first one 2 weeks to do. I would be concerned being locked in if it weren't a good fit bit I would be respectful not to waste their time too.