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RayAmerica says
By the way, when a “seller†doesn’t pay the commission to a real estate brokerage, who is it that benefits from that savings? Is it passed onto the buyer, or, is it kept by the seller?? If it’s kept by the seller, how does that benefit the buyer?? I’d be curious to hear your answer.
Of course there is no way to know for certain whether the sales price on a house would be lower without a sales commission and therefore whether the seller or the buyer would benefit but it is safe to say neither save money or make money from the act of paying the commission. While you can make a case, (and realtors do this) that the seller more then makes up the cost by the sales ability of the realtor I would say this is possible but not likely. My experience is that in a weak or average market realtors want the seller to list and accept a low price so that they can lessen their work load and move onto the next sale (commission). I can see no case that the buyer benefits. My own personal experience involves commercial leasing and sales and many times but not all the time the commission cost is added into the sales price or lease price, this is done at times with the full knowledge of the agent for the buyer or lessee. So that the seller or lessor suffers no cost and the buyer or lessee unaware of what is going on pays the commission indirectly.
RayAmerica
2009 Nov 11, 11:36pm
rdm .... some valid points, however, I've had lots of experience in real estate (dare I admit it on this site?) including holding an agent and broker's license. I've purchased a number of properties in my lifetime beginning at the ripe age of 20. I've dealt with numerous For Sale by Owners over the years and they are almost always considerably above market value on their asking price. I've also found a number of these FSBOs purposely hide defects that my discerning eye found very quickly. Sometimes sellers have ulterior motives as to why they don't hire an agency. At least when working with a buyer's agent, the buyer is able to look at numerous propterties for price comparison in order to establish in their own mind what market value is on a subject property. Also, the buyer's agent can provide valuable information on recent sale comparables. Are there bad real estate agents? You bet. As long as human beings are involved in anything, there will always be bad apples.
elliemae
2009 Nov 12, 1:56am
Sometimes sellers have ulterior motives as to why they don’t hire an agency.
Yea, $$$thousands$$$ of them...
RayAmerica
2009 Nov 12, 6:48am
elliemae .... if it's the sellers that save $$$thousands$$$ ... what's the advantage for the buyer? The buyer will have to hire a real estate attorney and coordinate the inspections, loan application, removal of contingencies, follow up on escrow, etc. .... all so the SELLER saves $$$$ ????
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I'm in escrow on a house that has never been lived in. (save the "still overpriced" proclamations and "idiot buyer" comments...)
My inspector finds the house to be in good condition with the following notable exception: the pillars/columns in the front and the back of the house do not have cement footings. You read that right. He says that it can be fixed and has actually seen such things overlooked before, especially since these columns do not take a structural load. He is surprised that the county inspector didn't pick it up, which prompts me to hit the county website to fetch the permit information. On the county website I see the permit is still OPEN and notice that all of the inspection categories FAILED.
First surprise, then confusion, then anger...
WTH?? So no wonder these pillars don't have cement footings - the house has not had its final inspections nor has it been issued a certificate of occupancy!
My father in law is our Realtor and our Mortgage Broker (save the hateful comments on that - he too thinks it is an industry full of scumbags). He calls the sellers agents (two of them are co-listing the place) and they are pissed at the sellers and floored to learn this.
The house is a custom and decked out with all of the goodies - that is, with the exception of the missing cement footings under the stucco columns/pillars.
Obviously, I'm not buying a house that doesn't have a certificate of occupancy. Correct me if I am wrong, but unless it is an all-cash purchase, you can't even buy a single family dwelling unless it has passed final inspection and has been issued a certificate of occupancy.
These listing agents are set to collect a combined $21K (3% of the purchase price) and didn't bother to check on this with the seller until my due diligence brought it to their attention.
Is my frustration directed properly? From all indications, the listing agents are pissed at the sellers and if I were them, I would be telling the sellers to go find another listing agent.
My opinion is that we are already in escrow and these are items the seller has to fix per sections 1 and 2 of our offer, so unless they fix the items, get the inspections passed, and obtain a certificate of occupancy from the county, we back out of the deal and demand they refund any money spent to date on inspections. In a way they are screwed – no one will buy the property unless they fix these items. Seems to me at this stage that the sellers are seeing what they can get away with…
Any constructive, non-politically-oriented thoughts here?
#housing