Me vs. the local Real Estate Cartel
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Lender · CA · Member since 2015 · 9k+ posts · 10k+ votes
7yThis is a waste of oxygen; 9 out of 10 times there's more to be gained by focusing on maximizing one's own gain than by being focused on minimizing someone else's.
35 Replies
- Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes7y
I pay 0% on the buy and 5% on the sell; so, 2.5% per transaction over the life cycle of the property. It's a negligible amount relative to other costs and profits.
Everyone thinks REI is about money and management. It's not...those are the easy parts. It's about deal flow and lots of it. When you have good agents and brokers, it's a game changer. If anyone thinks commissions are too high, you are working with the wrong agents.
I don't doubt you in the slightest. Any chance you could point out any tangible specifics that made having this specific agent a game changer?
Especially in regards to the issues this thread was written to bring up:
kickbacks, referral perks, all the worst things that low quality agents do to their clients.
Thank you!
- Overland park, KS · Member since 2017 · 113 posts · 44 votes7y
Originally posted by @Irina Belkofer:
Originally posted by @Hutcherson Yearwood:
@Greg Kristy I didn't read the link, but based on your statement you can avoid the commission. I buy with out an agent. I'm not against using one , I just haven't found one that can do more for me than I can do for my self. There is no exchange of power without the exchange of money.
Very cute statement. If you buy without an agent, you are denying freebies - the buyers agent doesn't cost you anything.
If you go with a listing agent, you don't get anyone by your side but the seller still pay both sides of comissions. Really funny how people think.
Comissions are negotiable but great agent do not decrease their comissions. If they can't negotiate their own comissions, how they are going to negotiate anything for their client?!?
In each area comissions kind of expected, like these proverbial 6% (3%+3%).
However, it's 7% on first $100K, 5% on next $400K, 4% on next $500K etc.
Sometimes it's 6% flat, 6/5/3......listing agent could get themselves 5% and leave 2% to the selling agent (and try to find a buyer by himself). There are plenty of structure in comissions, however, any market %% or $$ are acceptable - just try to negotiate. Only fixing the comissions are illegal (agreement to keep them fixed to avoid competition).
If you don’t have your own agent, a seller may bring you deals first to get both commissions (since you are representing yourself) OR you get a deal on the transaction itself. We have had both happen. We have had multiple realtors...has not worked out for us.
Forgive my confusion, could you elaborate at all?
You mean the listing agent reaches out to you before anyone else, and since you are a non-represented buyer, asks you to let them keep the half of the commission that the home owner would be paying anyway?
- Real Estate Broker · Cleveland, OH · Member since 2017 · 719 posts · 658 votes7y
@Victoria S. I think you're being mislead.
1. Seller brings you a deal - how do sellers know you? When I'm negotiating with a seller my own deal - there is no comissions involved, even if I have to tell by law that I'm a real estate broker. If I'm soliciting a deal on behalf of my client- there is some comission, even if a buyer pays it. Nobody works for free
2. Listing agent calls you about the deal - the comissions already included into the contract - it's negotiated between the seller and the listing agent. If you think you're getting part of comission - think again. You're getting discount from the property price, not comission, and that discount was negotiated by the listing agent because you're not represented, you don't know better and most likely cash buyer (no bank inspections).
Disclaimer: I'm not soliciting any clients, just describing how the system works. I'm not trying to persuade you to use your own agent - most often listing agent is better than a new agent, who is not much help.
However, listing agent ALWAYS owes fiduciary duty to his/her client and working in the sellers best interests....while to a buyer he owes only to be honest and disclose only safety issues, nothing else.
If you'd found a good agent, working with you - that would be an extra benefit free for you.
Good agent is worth all the money - they can negotiate much better deal because they know their local market. Don't kid yourself that you're getting better without any representation......unless you're an agent in another state and do it for living.
- Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes7y
Originally posted by @Greg K.:
I don't doubt you in the slightest. Any chance you could point out any tangible specifics that made having this specific agent a game changer?
Especially in regards to the issues this thread was written to bring up:
kickbacks, referral perks, all the worst things that low quality agents do to their clients.
Thank you!
- Immersed in the market
- Systems and relationships to immediately find out about opportunities
- Same day offers
- Straight talk
- Is a closer...makes deals happen
- Market knowledge
- Rehab knowledge
- Contractor referrals
- Lender, attorney, inspector, bug man referrals
- Understands rental P&Ls and flips and which properties will work
- Good communicator
I can't speak to kickbacks, referral perks, and other bad agent behavior...no experience there.
- Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes7y
No other country has an MLS system or a system of cooperating brokers eithers. These add liquidity to the market, and you know things cost money. The cost of running all the MLS systems easily runs into the hundreds of millions per year.
Everything about the US system of real estate is geared towards creating the most liquid market in the world. Mls, buyer agents, govt backed mortgages, fannie/freddie, title insurance, low down payments, ability to roll costs into loans, long mortgage timelines, fixed rates....all of these tiny points of liquidity add to making ours the most liquid market...abd with that comes the benefits of housing driving our national economy.
District Invest Group545 Reviews - Overland park, KS · Member since 2017 · 113 posts · 44 votes7y
Originally posted by @Irina Belkofer:
@Victoria S. I think you're being mislead.
1. Seller brings you a deal - how do sellers know you? When I'm negotiating with a seller my own deal - there is no comissions involved, even if I have to tell by law that I'm a real estate broker. If I'm soliciting a deal on behalf of my client- there is some comission, even if a buyer pays it. Nobody works for free
2. Listing agent calls you about the deal - the comissions already included into the contract - it's negotiated between the seller and the listing agent. If you think you're getting part of comission - think again. You're getting discount from the property price, not comission, and that discount was negotiated by the listing agent because you're not represented, you don't know better and most likely cash buyer (no bank inspections).
Disclaimer: I'm not soliciting any clients, just describing how the system works. I'm not trying to persuade you to use your own agent - most often listing agent is better than a new agent, who is not much help.
However, listing agent ALWAYS owes fiduciary duty to his/her client and working in the sellers best interests....while to a buyer he owes only to be honest and disclose only safety issues, nothing else.
If you'd found a good agent, working with you - that would be an extra benefit free for you.
Good agent is worth all the money - they can negotiate much better deal because they know their local market. Don't kid yourself that you're getting better without any representation......unless you're an agent in another state and do it for living.
Why would an agent not bring you an off market deal if he will get the entire 6% instead of sharing it with another agent🤔
And yes we do inspections and appraisals on all of our properties. I’m not saying that it’s a done deal however so far it has worked in our favor. But using an agent has been a hindrance for us in our experience.
- Overland park, KS · Member since 2017 · 113 posts · 44 votes7y
Originally posted by @Greg K.:
Forgive my confusion, could you elaborate at all?
You mean the listing agent reaches out to you before anyone else, and since you are a non-represented buyer, asks you to let them keep the half of the commission that the home owner would be paying anyway?
When we bought our 4 plex last year we used the sellers agent..got an amazing deal. The seller did not know us but the sellers agent wanted the 6% for herself so she was rooting for us. But we always do appraisals and inspections. we are not cash buyers...love to use leverage.
- Rental Property Investor · Lake County, IL · Member since 2016 · 34 posts · 11 votes7y
@Irina Belkofer I agree with you. If I were buying a home to live in I would most likely use an agent. In my experience most agents I have interviewed are slow to return calls, or are not familiar with investment strategies such as. Seller finance,subject to, or wraps. I think that we have been trained differently. The agents that can see with a similar lens are on here.
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