Why Do I Need A Real Estate Agent?
Rental Property Investor · Rockville, MD · Member since 2018 · 23 posts · 17 votes
Why Do I Need A Real Estate Agent?
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Investor · Saint Louis, MO · Member since 2016 · 970 posts · 1k+ votes
7ySo I'm going to go against the grain here. I used to use agents, but now I don't. I'll work with a selling agent if there is one but taking one middleman out always helps in terms of communication. I think agents are good if 1. you are a noob homebuyer/investor who doesn't have time or doesn't know anything about the buying process. 2. you are a seller who doesn't have time or know the process. 3. trying to invest out of state/or your area of expertise.
Once you familiarize yourself with the process, you can do what an agent does and sometimes better. No more scheduling through them, cutting out costs, miscommunications, etc.
personally, my last 6 deals have been without buying agents. I'll take my 2 page office depot sales contract to the seller, have them sign it, and let the title company do most of my legal legwork. I have my appraiser/inspectors/contractors run through the place and give their reports to my bank and bam. 2 week close.
87 Replies
- Investor · Chicago, IL · Member since 2010 · 76 posts · 55 votes7y
I used an agent on my first couple of purchases, then stopped. Today, I list on the MLS myself (lots of services that charge $100-$200 to list on the MLS through a local agent, then you pay buyer's agent commission), and I always buy using the seller's agent.
Never believe the seller pays the commission. It is like saying the restaurant pays the sales tax. Sure they do, but they add it to your bill.If you are new, personally I would use a real estate attorney (they cost about $300-$700 on a deal). They will protect your interests far better than a realtor will.
By cutting out a realtor when buying is far more than the 3% commission. A seller's realtor will often provide you insider information to let you drive down your offer price, or rise to the top of the pile in a competitive situation. A realtor could lose their license for doing this, but I have worked with so many different seller's realtors on deals, and almost all overshared which helped me.
- Walnut Creek, CA · Member since 2015 · 3k+ posts · 2k+ votes7y
Originally posted by @Jonas Helbert:
Why would a seller take a low ball offer because their agent gets to keep 100%? The only logic behind that is the listing agent takes a lower cut which is the misconception I mentioned in my initial reply.
Because not all agents are honest and represent their clients truthfully....
For example:
Offer A) 135K split between two agents, that what 4,050 ea.Offer B) 125k one agent, that's 7,500....
If offer B comes in first, there's a solid chance that an agent would be inclined to decline offer A verbally or not even present it if it was submitted. You can name a million and one reasons why the lower offer is better, it happens all the time value isn't only tied to dollar amounts.
But again, I said this is how you increase your chance of getting a low ball offer accepted, not that it's a sure thing. This happens all the time, browse redfin/zillow call listing agent, make lowball offer, rinse/repeat. - Member since 2018 · 4 posts · 7 votes7y
Like the discussion! My issue is that I consider the mls an outdated form of centralizing listing data. I mean, were living in a world where people will pay 20k for a bitcoin and cars can drive themselves, but somehow you need a "license" to buy or sell a house? I mean no disrespect to hard working agents, and there is a place for this type of service, I just do not think that continuing to hoard listings is any good for anyone else except agents. When buying a home one should have the option to enlist the services of a realtor, but not for a massive percentage, for a set price or per hour like a lawyer. If the environment was competitive all of America would win, as it is now it's basically a percentage factored in, deceptually sold as a non issue to buyers since the "seller" pays the fees, even though common sense tells you the buyer is paying for everything. I just think this is an outdated inefficient system and needs changed,information is available, I don't need someone who a "license" to ask me if I like a house. The only situation when a realtor as we know them now makes sense is a house flipper than essentially wants to sub out the selling portion of the deals, or a person who literally doesn't want to do it themselves - such as people who pay for groceries to be delivered. The fact that real estate has to be kept protected for the exclusive use of agents pretty much tells you they aren't needed. Open it up, if Realtors are as necessary as they themselves claim then I'm sure people will continue to call them.
- Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes7y
The reality is if a buyer doesn't want to use a broker/agent then don't use one.
I don't debate or try to sway buyers that think a certain way these days. I stay really busy with buyers that actually want a relationship and help so I do not need to talk buyers on the fence into working with me.
Brokers/agents just like investors are QUALIFYING YOU the brokers/agents need to QUALIFY the investors. Have an ideal client profile. What are their attributes you want them to have? Define your business model and weed out the noise from leads that go nowhere.
- Member since 2018 · 4 posts · 7 votes7y
Originally posted by @Adam P:
I used an agent on my first couple of purchases, then stopped. Today, I list on the MLS myself (lots of services that charge $100-$200 to list on the MLS through a local agent, then you pay buyer's agent commission), and I always buy using the seller's agent.
Never believe the seller pays the commission. It is like saying the restaurant pays the sales tax. Sure they do, but they add it to your bill.If you are new, personally I would use a real estate attorney (they cost about $300-$700 on a deal). They will protect your interests far better than a realtor will.
By cutting out a realtor when buying is far more than the 3% commission. A seller's realtor will often provide you insider information to let you drive down your offer price, or rise to the top of the pile in a competitive situation. A realtor could lose their license for doing this, but I have worked with so many different seller's realtors on deals, and almost all overshared which helped me.
I am with you on listing yourself for a reasonable fee, this is how it should be done 2 hrs into 2019...lol. Also with you in hiring an attorney, again for a reasonable fee, although in my experience this is optional unless done in lieu of a title agency. The title agency I have used had plenty of experience and I feel very confident and yielded great results- all the actual needed paperwork done and filed, money handled and split up, copied of everything handed to me in a very nice binder for a very reasonable price of like 500 dollars. I have not used a real estate attorney but that is a great idea. Again, the idea here is that competent people can easily handle these things on their own by enlisting just a few services that charge the same reasonable fees whether I buy a 35k junker or a 1.3 million rental - not a pre-set percentage that can basically equal a brand new Denali on a decent house - it makes no sense. If you want to use a realtor you should be able to - just like any other service - but unlike many other services there isn't technically price competition so it has completely stagnated. Even big name radio personalities talk as if buying without an agent will result in certain bankruptcy, or horrible illness or death. This just isn't true, and the ones I'm thinking of are agents themselves so they won't be paying the fees. Anyone ever wonder how million dollar pieces of equipment get sold everyday without giving up 6-7 percent? It's no different.
- Investor · Chicago, IL · Member since 2010 · 76 posts · 55 votes7y
Originally posted by @Matt K.:
Because not all agents are honest and represent their clients truthfully....
For example:
Offer A) 135K split between two agents, that what 4,050 ea.Offer B) 125k one agent, that's 7,500....
If offer B comes in first, there's a solid chance that an agent would be inclined to decline offer A verbally or not even present it if it was submitted. You can name a million and one reasons why the lower offer is better, it happens all the time value isn't only tied to dollar amounts.
I am an investor and always use the seller's agent. I find about 90% of agents will do EXACTLY as above. It is only about 5-10% who are truly representing their clients interests, and won't help me as a buyer, drive down their seller's price to get double commission.
It's easy to forget the median realtor income is only about $42k. At 2% commission per deal (after broker cut), that means they are selling or buying $175,000 worth of properties a month.
That's not much real estate, so offering double commission is a bonus month's pay for most.
- Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes7y
Yeah it's hard for me to relate to median income brokers and agents. 90% of new agents to residential make it about a year before leaving the business. So lot's of new agents (not all) are about the most dollar they can get as they tend to have big splits with their brokerages being new agents 50/50 or 60/40 etc.
My Universe is much different. Each closing I tend to make over 6 figures in commission per deal for commercial and I keep it all as I am the brokerage but I am 15 years in the business and have earned that right. I didn't start out that way. You have to put in time and learning in any field to work up more towards the top.
In my asset class the listing brokers most times DO NOT want to deal with a buyer directly. They want me handling that aspect of it as they are volume listers for commercial properties. If it's an institution or a very seasoned buyer then maybe but if it's a credible buyer but more green to the process then no.
- Real Estate Investor · Waldorf, MD · Member since 2014 · 592 posts · 320 votes7y
Depending on the deal you may not need an agent. D4D, cold calling, and wholesale, these 3, for example, doesn't require an agent.
- Investor · Saint Louis, MO · Member since 2016 · 970 posts · 1k+ votes7y
Originally posted by @Benjamin Haberman:
@David Zheng what kind of product is bank giving you ? Are these buy and holds or flips?
These are buy and holds. Commercial loans
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