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Contributor
koctail
Posts: 27
Registered: ‎11-12-2011
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Agent charging 2500 for buying properties under $100k

Is this normal procedure, or should I just look for another agent? Or should I just try and buy direct from the listing agent? I am mainly looking at REO's and specifically in one building where I already own 3 units. My agent said the 2500 fee is new and implemented by her company.

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Jack2001
Posts: 9
Registered: ‎09-14-2009
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Re: Agent charging 2500 for buying properties under $100k

[ Edited ]

I say run, dont walk from this agency.  As a buyer you should never pay your agent for their services (unless there is a highly specialized niche service they are providing you).  The agent will receive their commision from the bank/owner of the property.  

 

My guess is that the agency is not willing to take the time and effort to close on a 100K home given their commision will be on the lower end at $2,500 to $3,000 (REO's often provide a 3% CC) but that is not really your problem.  Find another agent.  

 

In these lean times their should be plenty of agents who would be happy to work with you without charging you for their services, especially if you plan on buying multiple properties.

 

Good luck!

Contributor
koctail
Posts: 27
Registered: ‎11-12-2011
0

Re: Agent charging 2500 for buying properties under $100k

The properties I bought were just $60k range, so the agent's commission was a meager ~ $1300 . Plus I had to submit so many other offers before getting one accepted. And these are REO's which involve a little more work than the vanilla deals.

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JayKlosinski
Posts: 17
Registered: ‎03-01-2012
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Re: Agent charging 2500 for buying properties under $100k

Hiya koctail, 

 

I agree, although commissions cannot be set accoding to antitrust laws, each agent is basically an independent contractor and can set their commissions as they see fit. I would find an agent that is willing to put your best interests before their interests. If your interests are best served buying a property less than $100k, then thats what is more important than their commission. I teach a first time buyer class at the university center here in Lake county and I always make it a point to make sure that buyers realize that their team (lender, Realtor, inspectors, etc) are working for YOU and NOT the other way around. find another agent, one that will keep your interests first. 

 

thanks!

 

Jay

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lucas2287
Posts: 6
Registered: ‎01-30-2013
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Re: Agent charging 2500 for buying properties under $100k

[ Edited ]

well it is a good call. I think you should go with this agent. I too looking for Houses for sale in Calgary. If you could recommend some to me. than please do response.

stay hungry, stay foolish.
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joe_creole
Posts: 64
Registered: ‎04-27-2011
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Re: Agent charging 2500 for buying properties under $100k

If you already own 3 units in that building I'm not sure why you would need a buyers agent. I'm sure you know intimate details about the property which agents do not. Hire an attorney to represent you and work directly with the listing agent. Attorney's usually charge between $350 - $650 for a simple real estate transaction.

Contributor
koctail
Posts: 27
Registered: ‎11-12-2011
0

Re: Agent charging 2500 for buying properties under $100k

That is a good tip. But will listing agents want to work with someone without an agent? Will it hurt my chances of getting an offer accepted?

Regular Contributor
joe_creole
Posts: 64
Registered: ‎04-27-2011

Re: Agent charging 2500 for buying properties under $100k

The listing agent may offer to represent you in the transaction as a dual agent. Now many people are appalled at the idea because the theory is an agent cannot represent both sides of the transaction without bias. In my experience, agents have been mostly biased towards themselves making more commissions. I see properties sell with exclusive buyer's agents every day that are grossly over priced. It's easy to see when a buyer doesn't have a clue. It's a shame - I often wonder how those agents sleep at night.

 

Now if you hired a realtor to sell your property, I don't see how a seller could object if the agent brought him a buyer - isn't that what you're paying him for? Of course the seller would not appreciate the agent bringing a low-ball offer, however, I think the banks are quite accustomed to this by now.  I don't encourage you to low-ball, but make an offer supported by comparables that are agressively priced. A dual agent should not prevent your offer from being accepted, however, an unsupported ridiculous offer will.

 

If you're a buyer, there is potential a dual agent could try and persuade you in the sellers favor - and that's when having intimate knowledge of the property can really benefit you more than having an exclusive buyer's agent. A dual agent will end up leaning harder on the bank - if that's possible - to get the deal closed if you are a knowledgeable buyer and stand your ground. After all, dual agency means dual commission and nothing beats a motivated seller except a motivated realtor.

 

There is more to a contract than offer price so I recommend hiring an attorney to represent you - especially on REO properties with all their addendums. Have him review your offer before it's sent to the bank so you make a clean offer. Then hope for the best and be very patient. Don't be afraid to stand your ground and walk away from the deal if the bank wants to play hard-ball. I think quite a few asset managers have an unrealistic price in mind and won't negotiate until the property has sat on the market for an extended period.