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Real Estate Agent Working for both Seller and Buyer?. Please advise


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#1 tinman1412

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Posted 15 June 2008 - 10:45 AM

Is it a good idea to work with a real estate agent that works for both the seller and buyer?. I know it's not in the best interest from the buyer's perspective, but if you work it right, I think you can get a good deal as a buyer. Since the agent has an opportunity to earn 6% taking both sides, maybe they will compromise and take say 4%, and thus reducing the price further. What are your thoughts?.

#2 safly

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Posted 15 June 2008 - 10:50 AM

WORKS FOR. NO!
WORKS WITH. YES!

That's what brokers are for.

That broker should be getting 3% at most IMO. Brokers negotiate with the Seller's Agent to modify the comm. Seller will usually set the overall comm rate. BUYER can pretty much accept or not accept in the closing contract.

I say keep your information and purchasing points partial to yourself or your party.


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#3 tinman1412

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Posted 15 June 2008 - 10:54 AM

I'm sorry, I'm trying to understand your advise. I'm a buyer. Should I work with the seller's agent for the home I'm interested in?. He will then represent me as a buyer and also represent the seller. Are you saying this is the preferred from the buyer's point of view or are you suggesting I should find my own agent?. Sorry for not fully understanding what you are saying.

Thanks

#4 safly

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Posted 15 June 2008 - 11:27 AM

I must have been confused by your original post.

YOU CAN work INDEPENDENTLY with the SELLER's agent. The SELLER determines if any agent at all is needed in a transaction. You can always have your own agent or a broker, unless determined otherwise. That agent is in the equation to pretty much GET PAID, so in a sense that agent is primarily working for THE SELLER or THE CONTRACT.

They (Broker or Buyer's agent) can do the work for you, you just tell them what EXACTLY you want in a prospect and of course in the transaction. Then you sign it or nay it.

The preffered is NO AGENT, but in most cases that does not occur. Mainly because SELLER'S prefer to "agent up" on their transaction and have little time to negotiate with any PROSPECTIVE BUYERS. If you happen to know the owner then perhaps you, as a SERIOUS BUYER, could convince that individual or party to otherwise expire the agents services. A good sign (more often than not) that a SELLER NEEDS HELP in moving their product, is when an agent is present. So you may have a discount window (10-15%) available to bargain with, doesn't hurt in proposing that offer to the agent.

Hope that helps.
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#5 redhead

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Posted 15 June 2008 - 06:23 PM

Tinman, if the property is listed, the agent legally works for the seller. You do not have to introduce another agent into the deal, and may save yourself some money, but the seller's agent cannot "work" for both the buyer and the seller. The new breed of so-called "buyer's agents" are reverse farming the population of potential transactions---that is to say instead of "taking listings" and waiting for those properties to sell, they are "taking prospects" and facilitating them in the process of buying a property. If real estate is unfamiliar to you (as it is with most people), this is not a bad concept as they can help explain paperwork, shuttle documents and generally help the process go more smoothly. However, most veterans in the RE business rarely use brokers when buying properties, but more often, use brokers to sell properties. I hope this helps a bit.

#6 tinman1412

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Posted 15 June 2008 - 07:49 PM

Yes, the seller does have a broker that is helping them sell the property. If I don't introduce an agent on my side, how do I go about getting an accurate value for the property?. I don't have access to the MLS so I cannot run a comparative market analysis. Will the broker for the seller do this for me?.

Also, can he legally represent both side?. I was told that I need to sign some paperwork if I have him represent me as my agent. Yes, I'm a newbie when it comes to real estate. I just assume that I would go find myself an agent that will help me find a home, but I saw a condo listing and was able to get a showing with the broker who is helping the seller sell the condo.

Can I just negotiate with him and possibly save myself 3%?




#7 Dr Quest

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Posted 15 June 2008 - 09:42 PM

QUOTE (tinman1412 @ Jun 15 2008, 08:49 PM) <{POST_SNAPBACK}>
Can I just negotiate with him and possibly save myself 3%?


When the seller signed the contract with the broker it specifies what the commission will be (typically 6%) and it is paid by the seller so there is nothing for you to negotiate there, 6% is being paid by the seller at closing and either one agent gets the whole 6% or its split between the buyers and sellers agent. If you are a newbie then you need an agent to represent you...it costs you nothing because the seller is paying the commission.

You can have one agent (or broker) represent both the buyer and seller, it's called dual representation but it's not recommended, however if you insist you can sign the paperwork you mentioned. Think of it this way - would you want your wifes attorney representing you in the divorce (even if he said he was going to be fair)? You need someone to represent you, they can take you to other listings, be there to bounce things off of and basically hold your hand. I suggest finding an agent that has experience in downtown condos, they would be able to help you with a realistic offer to make. Your agent brings the offer to the sellers agent and the seller either accepts, denies or counters the offer. The agent makes sure everything goes smoothly, I used to sell my own investment property until recently, trust me, the 5% I paid for the hell they went thru (and saved me from) was well worth it. That being said, there are good and not so good agents out there, make sure you are comfortable with them before you sign a contract. Remember, your agent works for you, the buyers agent works for them but both are paid with the 6% commission and that is paid by the seller.

#8 Keller Pirate

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Posted 15 June 2008 - 09:45 PM

QUOTE (tinman1412 @ Jun 15 2008, 08:49 PM) <{POST_SNAPBACK}>
Can I just negotiate with him and possibly save myself 3%?


The seller pays the commission, not the buyer. Also, they have already signed paperwork that says what the commission will be 4 or 5 or 6%. I can't see any downside to getting your own agent, they willl share the commission but, you will be much better represented by your own agent rather than the sellers.

Edit Dr Quest and I seem to have been thiking the same thing at the same time.

#9 tinman1412

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Posted 15 June 2008 - 10:57 PM

Yes, I understand that the seller is paying the 6%, but is that written into the contract before finding a buyer?. If I have the broker who is working for the seller represent me as well, could he or she agree to take 4% and not 6%. If I get my own, he/she will have to split the 6% with my agent. Are you saying he/she would not help me negotiate the best deal possible. It should be pretty systematic right?. By looking at the Comparative Market Analysis and seeing what other properties sold for, this should be a good indication of what the offer price should be. In turn, if he's willing to take just 4% and not 6%, would myself as the buyer not be able to get a better deal on the offer price?.

#10 Keller Pirate

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Posted 16 June 2008 - 07:20 AM

QUOTE (tinman1412 @ Jun 15 2008, 11:57 PM) <{POST_SNAPBACK}>
Yes, I understand that the seller is paying the 6%, but is that written into the contract before finding a buyer?.
Yes
QUOTE (tinman1412 @ Jun 15 2008, 11:57 PM) <{POST_SNAPBACK}>
If I have the broker who is working for the seller represent me as well, could he or she agree to take 4% and not 6%.
I don't think so.
QUOTE (tinman1412 @ Jun 15 2008, 11:57 PM) <{POST_SNAPBACK}>
If I get my own, he/she will have to split the 6% with my agent. Are you saying he/she would not help me negotiate the best deal possible.
Yes they split the commission and I would not trust the sellers agent. They have already signed a contract with the seller to get them the best price. Where does that leave you?

Your own agent is the best way to go and costs you nothing, why take the chance that the sellers agent would take pity on you. If they are telling you they will get the price down if you go with them they are already being dishonest, I would run the other way.

This isn't a car deal, you are buying something from a person that only has one for sale. You have to know your price and not be afraid to walk away if it isn't right. It is an emotional process for both sides and you need your own person to represent you, not the other sides.

#11 tinman1412

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Posted 16 June 2008 - 09:16 AM

I see. I will go ahead and get an agent to represent me as a buyer. Thanks for all the advice

#12 redhead

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Posted 16 June 2008 - 11:43 AM

Not to be a contrarian, but the seller's agent generally does NOT get the six percent if there is no other agent involved. That is why I said you may save some $'s on the sales price, but only under certain cirumstances. Normally (if you are dealing with a developer or builder, not an individual) there is a listing commission specified as 2-3% with the selling commission having its own %. If you are concerned about value, however, an appraisal is going to be required for virtually every transaction that involves a lender. And in these days and times, you can go through the web to look at listing prices, so you can get a good snapshot of values before making an offer.

#13 safly

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Posted 16 June 2008 - 04:19 PM

Look Tinman. IT'S DOWNTOWN FORT WORTH! There is no endless sea of properties that have changed hands more than twice in the past 3 years. So why the need to look up CMA's this year? Just go in as yourself and knock off 10% from the asking price right out of the chute. DO NOT make this an emotional purchase, that word shouldn't even be in your dictionary when you approach the PROCESS. Just play it no nonsense and say, "This is what I will do, do we have a DEAL SIR/M'AM?". And if they say well I 'll have to think about it, then just tell them " that I will be expecting an answer within 48 hours, in the meantime I will have to conduct business elsewhere." Keep bringing up the fact that this is BUSINESS. You can do what any other agent does, so just give it a shot. And remember that if you want a fair deal for yourself, all Downtown Dallas Condo comps are out the window.

Bon chance!
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#14 David Love

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Posted 16 June 2008 - 09:21 PM

Had a similar thread going on about a year ago, here's the link to one of my posts that answers a lot of questions: Downtown Residence Options


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#15 Mūse

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Posted 29 June 2008 - 06:01 PM

Lots of great information in this thread and all sorts of advice. Of course, the answer you get often depends on who you ask. It is possible for an agent to represent both buyer and seller. Some agents prefer not to do that, because it can seem tricky. And sometimes it is tricky. But it's not always tricky. And in some cases it works out wonderfully for both parties. I've done it. And I can attest to that. The main LEGAL requirement is that the agent/broker get written consent from both parties to broker the deal. And it's also important for the agent/broker in those cases to fully advise each party what the legal limitations are in a dual agency/intermediary relationship.

Of course, if you want to wheel and deal and negotiate the lowest price... then dual agency is definitely not the route to go. Because a dual agent can't fairly and honestly negotiate that kind of situation.

But there are cases where it works quite well. Often when there are priorities other than money. Which is the case quite often in real estate transactions. For instance, a seller may have a goal to sell immediately for a reasonable price. And the listing agent may have a buyer who has been extremely interested in getting into that neighborhood, and is happy to pay a reasonable price to get a home right away. In that case having one agent overseeing the entire transaction may be preferable to both buyer and seller. Because the goal is not to negotiate the other party to pieces... but to make sure all the i's are dotted and t's are crossed quickly, professionally, and with the least likelihood that the transaction will fall apart. An experienced agent can handle that kind of deal, anticipate problems and head them off, coordinate with all the parties... inspectors, appraisers, loan and title companies, etc., and basically make sure everything is on course. The seller has much less worry about last minute surprises. And anyone who's done more than a handful of real estate transactions understands how often we're met with those last minute surprises that shouldn't have happened if everyone was on the ball.

But in the OP's case... it seems the advice to hire an agent was probably well-founded. Hope it all worked out well!

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