patrick.net

La Dude says

I am looking to (transact) at around 2M ..... Now, I can either go with ... or try to find an attorney

2 M is a lot of money for something to go wrong in a transaction. Realtor® or no Realtor®, it sounds like maybe you oughta also have a lawyer reviewing your stuff before signing off on things.

La Dude says

I am looking to buy at around 2M in santa monica, los angeles, north of montana ave. Now, I can either go with redfin or try to find an attorney who has broker licesnse and negotiate with him/ her some flat fee or per hour deal. I don't have an attorney friend. Advice will be appreciated.

Find a fsbo and have an attorney help you. If you find something that's listed, offer them a reduction to an amount that you feel is reasonable, because you'll be paying the full real estate commissions. With an attorney, you might be able to get them to reduce the commission - re agents & brokers are desperate these days and might be willing to do anything for a sale.

So an identical home to mine sold next door for 2M using an agent. Now you want to buy mine FSBO. Do you think my asking price will be 2M less 6%? If you do, you don't understand people very well.

No, Zoas. I don't think you understand people who can afford a 2M home. Even tho there's some confusion above over whether it's the buyer or the seller paying 6%, when you're selling a house it sure feels like you're the one paying it. Mainly that's because of the settlement statement, where the money/purchase price comes in at the top, then you go through all your deductions and arrive at how much you put in your pocket and take away from the table.

If you can show me how to put more money into my pocket, I'm going to listen to you, and on a 2M property not having to pay out the 6% commission will do exactly that.

Most people who are wealthy have some smarts, and can discern that it's not just about the asking price.

And here's the other way to find FSBO's, in answer to those who have responded that there aren't many in inventory. You drive around the area you want to live. You see a house you want to buy. You walk up and ring the doorbell. It works.

Nomograph says

A buyers agent costs you nothing. Interview, find a good one, and use them. Don't let emotions (i.e. RE agent hate) get in the way of business or it will cost you.

Who said anything about hate? Once again, a lecture from Nomo about how one should feel and react. Even in the absence of emotion, he'll just use projection to justify his holier-than-thou, sanctimonious bullshit.

The RE industry is a cartel. It makes billions of dollars by forcing itself as a middle-man onto the market. People spend years trying to pay down their mortgages just to squeeze a profit. God forbid they want to discuss a way to circumvent this criminal enterprise and save ten thousand dollars.

klarek says

hate?

..and jealousy and what not. I am learning new words from uncle Nomo everyday. LOL.

I still think it's easier to find a Realtor(R) friend than a lawyer friend.

vain says

I still think it's easier to find a Realtor(R) friend than a lawyer friend.

Are you saying lawyers lie more than Realtor(R)s?

Zoas says

So an identical home to mine sold next door for 2M using an agent. Now you want to buy mine FSBO. Do you think my asking price will be 2M less 6%? If you do, you don't understand people very well.

Probably not. But I can easily produce a prelim HUD-1 showing a breakdown of all closing costs coming out of the sale proceeds prior to the seller being compensated, and then I can show you what one would look like without 6% coming off the top for commission. I think I know which one you'd rather sign.

Sale price means jack shit. Form HUD-1, Line 603, is all the seller is concerned with. I show you a HUD with a higher amount on line 603 than your neighbor, we're good.

Zoas says

So an identical home to mine sold next door for 2M using an agent. Now you want to buy mine FSBO. Do you think my asking price will be 2M less 6%? If you do, you don't understand people very well.

It's because of people like you that I'm using an agent (he's kicking back 2/3 of his commission) rather than look for that lone intelligent needle in the haystack of delusional sellers, the person that realizes it's mutually beneficial for us to remove agents and their cartels from the process.

So while you might not acquiesce to taking 6% less sans-agent, just know that since your proceeds are coming directly from me, the buyer, I'm going to buy your house for 6% less with an agent than I would have if you were more sane. That's a $120k lesson that costs me nothing either way. I hope your agent at the very least can show you some quality loving for that kind of money.

Zoas says

Do you think my asking price will be 2M less 6%? If you do, you don't understand people very well.

But your asking price could be $2M less 3%, and you'd still be better off FSBO. The buyer would think they got a deal, and you'd get more money in your pocket. I get that buyers have an ego and want the same $2M their neighbor got, but in reality the neighbor got $1.88M-1.9M (5-6% commission robbed) in their own pocket. It always pays to look at financial substance, and make a mutually beneficial deal.

There are sometimes expectations set on $2M properties -- e.g. that they are staged (especially in the Bay Area). However, it's easy to solve these things -- if you're concerned, you can find your own stager instead of choosing your realtor's favorite stager who throws them a backhander (good advice generally).

robertoaribas says

That attorney will not be advising you on real estate, and will work for only a small payment...

They could advice you on real estate if they have the expertise, and just babysitting the transaction doesn't require much effort. You're just glorifying the work of a realtor -- there isn't much when you eliminate driving around because used house salesmen use standard forms and don't have expertise on those forms. Add that to the fact that the buyer's agent doesn't actually represent you, and your friend will.

In any case, what I'm saying is generally good advice for attorneys at a minimum. It's easy to babysit your own transaction -- minimal effort, high gain. Any lawyer is more than adequately prepared to babysit their own transaction.

The fact that people might be given comfort by having a person, who has no ethical obligations, who has no standards for conflicts of interest (and may even be working in the same office as the listing agent), who cannot help them with serious legal disclosures, who are paid on a commission basis, and who may not even have a college education, represent them on the largest transaction of their life is terrifying to me.

bubblesitter says

vain says

I still think it's easier to find a Realtor(R) friend than a lawyer friend.

Are you saying lawyers lie more than Realtor(R)s?

No I was just suggesting that more people would find a licensed RE agent in their family/circle of friends more often than a lawyer. And even when you find the lawyer, the probability of them wanting to go thru more school/examinations to help you out is close to zero.

Just use the RE agent and follow the same instructions as suggested for the lawyer as shown below. Just change the term 'lawyer' to agent.

"Your lawyer friend can then take the fee that would have gone to the buyer agent, 2.5-3% or whatever, and refund a portion to you. In addition, your lawyer friend would get all of the standard used house salesmen forms that realtors use for transactions from the local real estate association, so you won't be missing anything you would have gotten from a realtor.
One thing your lawyer friend may want to do is make it clear they are not providing legal advice, but are only providing services as a real estate broker in this case, unless they specifically want to provide legal advice (and are covered by their malpractice carrier for this). Instead, you could hire a real estate lawyer with the money you save to review all the disclosure issues and other material aspects of the transaction."

corntrollio says

But your asking price could be $2M less 3%, and you'd still be better off FSBO.

In a rational world - yes. But the FSBOs I've come across have been mostly delusional when asked if they will cooperate with a buyer's agent.

Try it sometime. Knock on the door of a FSBO and say you want to represent yourself so you'd like the 3%. When they look at you crazy, then ask if they'll pay it to an agent.

Nope, FSBOs believe it's the same thing as selling a car. You see that mentality here when you read comments like "downloading the used house forms" and "escrow doing all the work".

But for the big picture, go back to what started this thead on the previous posting. The guy didn't want to use a buyer's agent, but couldn't get the deal done on his own.

Instead of recognizing that there might actually be some value in a buyer's agent, he goes to great lengths to create a fantasy scenario where Mr. Right is going to appear and work for charity.

klarek says

It's because of people like you that I'm using an agent (he's kicking back 2/3 of his commission)

Well first off, you misunderstand my hypothical. I'm saying a FSBO is not going to discount 6%, or even 3%. He's going to want it all because he doesn't really have a clue about the sales process. You'll be lucky if he read the first chapter from "The Idiot's Guide..."

Your agent is going to kick back 2/3 of his commission? Yeah, that can happen when it's your relative and the broker will allow (or they are the brokers). Other than that, don't count on it.

Zoas says

In a rational world - yes. But the FSBOs I've come across have been mostly delusional when asked if they will cooperate with a buyer's agent.

Try it sometime. Knock on the door of a FSBO and say you want to represent yourself so you'd like the 3%. When they look at you crazy, then ask if they'll pay it to an agent.

Let's be more specific about this. Can you find us FSBO houses that sold for significantly less than realtor-sold houses that are apples to apples? (i.e. similar in condition too -- a comparison between renovated and unrenovated isn't useful, for example)

You're saying people are irrational and will want the whole $2M or nothing, but do you have the data on this? Do FSBO buyers eventually capitulate and get less than $1.88M-1.9M on average?

corntrollio says

Can you find us FSBO houses that sold for significantly less than realtor-sold houses that are apples to apples?

Kind of not worth the effort really. How do you find a property that sold, determine it was a FSBO, find the previous owner, then interview them to find out what they wanted vs. what they accepted? And it's got to be a resonable model match for a realtor sold property.

I believe the NAR statistics are that fewer than 1% of homes are sold FSBO. And I don't think it's because of a realtors "cartel". As some have mentioned, the used home forms are downloadable, escrow does most of the work, etc...

Nope. Selling a home takes a lot of work and a bit of knowledge, especially if it's a short sale. Most people are not up for that. Kind of like doing a valve job on an engine. Most of us could do it, but don't.

What generally happens is that the seller pockets the 3% commission when you don't have an agent. It doesn't make the price go down by 3% so you might as well have your own representation.

Funny how people get so upset about a measly 3% commission, when the going rate in the food service industry is 15%. Perhaps you guys should only eat at fast food restaurants to avoid paying anything and save toward a down payment.

Zoas says

Your agent is going to kick back 2/3 of his commission? Yeah, that can happen when it's your relative and the broker will allow (or they are the brokers). Other than that, don't count on it.

He's not a relative. He doesn't have to put much time into the transaction, just open the door and fax the papers. On a $400k transaction, a $4000 commission is still pretty good.

Grimydazzle says

What generally happens is that the seller pockets the 3% commission when you don't have an agent.

More likely their agent will pocket it.

Grimydazzle says

Funny how people get so upset about a measly 3% commission, when the going rate in the food service industry is 15%.

Yeah cuz a $10 burger is comparable to a six-figure house.

Grimydazzle says

Funny how people get so upset about a measly 3% commission, when the going rate in the food service industry is 15%. Perhaps you guys should only eat at fast food restaurants to avoid paying anything and save toward a down payment.

Thanks for the out of context comment. I'm sure the smallest purchase of most people's life compared to the largest purchase of most people's life is entirely a valid comparison.

Zoas says

How do you find a property that sold, determine it was a FSBO, find the previous owner, then interview them to find out what they wanted vs. what they accepted? And it's got to be a resonable model match for a realtor sold property.

In my area there are tons of substantially similar 1950s tract homes for which you could do this. It wouldn't be that hard to compare level of renovation, especially if you look at permits. No need to interview anyone.

ESq.realtor-

Can you identify your contact information to me/those of interested in having you represent us on a transaction? Would love to have your contacts as refrence for future purchase I make here in San Joaquin county. Thanks,

Gabe

Controlled you can use Greg Glaser and he will do FSBO for you for $1000 . You can also use Brian Collons . Both of these guys are attorneys and have a real estate license too. Both if them closed a FSBO transaction for me in the last and I recommend them. You can't get anything cheaper than that :)