10 things your real-estate broker won't say
The person you hired to help you buy or sell a home may be holding back. Here are a few things you should know so you get the best deal — and the best service.
1. "Your open house is really just a networking party for me."
Hire a real-estate broker to sell your home, and one of the first things he'll likely suggest is hosting an open house so that potential buyers can casually check out your property on a weekend afternoon. But while open houses are promoted as a great way of finding a buyer, a National Association of Realtors study found that their success rate is a mere 2 to 4 percent.
No matter. Holding an open house serves another important purpose — for the broker. "It gives him a database of clients," says Sean McNeill, an independent real-estate broker based in New York City who says that he doesn't like open houses, preferring to match clients with appropriate buyers. "At open houses, you get all kinds of people walking in. Some are (trying) to see how much they should sell their own places for; others just want to get a look at what's out there." All are perfect pickings for a broker looking to increase his roster of buyers and sellers. "Think about it," McNeill says. "The broker is devoting a couple hours of a weekend. He won't do that unless it helps him in a big way." But it doesn't necessarily mean that a seller should forgo an open house altogether — "It's still a real good way to showcase your house," McNeill says.
2. "My fees are negotiable."
Brokers like to make it sound as if their fees are engraved in stone, but that's rarely the case. During the housing bubble, for example, as the number of brokers sharply increased, so did the competition for listings. One broker says he lowered his fee by a full percentage point just to give himself an edge. But even in the wake of the recent crash, you have a good chance of negotiating a better deal; that same surplus of brokers is still out there competing for even fewer listings, giving you something of a leg up.
The broker we spoke with, who asked not to be named, says that sellers should always shop around for better terms and has some suggestions for the best conditions to induce brokers to lower their fees: "If somebody's willing to commit to me for selling one place and buying another," or "If you're in a particularly desirable neighborhood with a house that will bring a lot of traffic" for an open house. And with a lot of smaller brokers, he says, "all you need to do is ask and they'll lower the commission."
Bing: Search & decide
3. "Think you've had no offers? Actually, there have been several."
Legally, the broker you hire to sell your home is obligated to tell you about all offers that come in. In reality, some do not. Perhaps he thinks the offer is insultingly low for you, but more likely, "the broker thinks it's too low for his own purposes," McNeill says. "He wants to hold out for a bigger commission." Another possibility is that there's an outside broker (or "co-broker") circling your house, and the primary broker is waiting for one of his own clients to make an offer so he can keep the full 6 percent to himself.
"You must be clear with your broker that you want to be informed of all offers," McNeill says. "Otherwise, you may be leaving him to make decisions that you should be making." Check the listing agreement drawn up when you hire the broker; if the promise to disclose all offers isn't listed explicitly, insist that it be added.
4. "I'm not obligated to keep my mouth shut for you."
You spot your dream house as you're driving through a neighborhood and call the broker listed on the "for sale" sign. That's how a lot of buyers stumble on a broker — who, in turn, happily shows you other houses, asking about your needs, laughing at your jokes. It's easy to get loose-lipped and forget whom you're dealing with: someone else's agent. "Legally, brokers are obligated to provide their sellers with any information that can help them get the best prices for their homes," says Stephen Israel, president of Buyer's Edge, a Bethesda, Md.-based company that represents homebuyers. "If you tell the broker that you're willing to pay $500,000 but want to offer $450,000, they'll pass that on to the seller. They have to."
Also, some brokerage companies encourage prospective buyers to get pre-approved for loans. While that can make a buyer more attractive to a lender, it also tells a broker whether a buyer can afford a $600,000 house when he's trying to haggle on a $400,000 property. "When somebody asks for (a pre-approval), find out who they're representing," says Israel, acknowledging that such details can short-circuit your negotiating leverage. "If they represent a seller — or someone in their office does — they shouldn't have it. The broker may tell you she will be impartial, but how can she be?"
The bottom line: You need to hire your own broker. "The only safe way to go about it is to have an agent who represents you," Israel says.
5. "Sometimes I forget whose side I'm on."
The past 15 years have seen the proliferation of buyer brokers, agents who are supposed to work strictly in the buyer's interest, helping him get a fair price on a home and avoid pitfalls along the way. Unfortunately, things don't always unfold so nicely. While buyers may think they're getting a broker who isn't commission-hungry, many buyer agents are just that: They usually get about 3 percent, the same amount any broker typically earns when he gets involved with another agent's listing. "Buyer brokers are sometimes too focused on closing the sale and getting that commission," says Max Gordon, an Overland Park, Kan.-based real-estate broker and attorney, so it's often in their best interest to see you pay as high a price as possible.
Even worse, some brokers who call themselves buyer advocates are actually working for companies that also represent sellers. "Brokerages offer bonuses to buyer agents if they sell an in-house listing," Israel says. A good way to get a broker who has no such conflicts of interest: the National Association of Exclusive Buyer Agents. Its Web site (www.naeba.com) can help you find a buyer agent near you who pledges to help you get the best deal possible and has no ties to sellers' agents; many even work on a fee structure rather than on commission.
As we all know choosing the wrong real estate agent can be a painful experience whether you are a residential or commercial property buyer or a seller.
If anyone has had a great experience with an agent please share it at Hallmark Abstract Service by leaving a comment at the article 'How do you choose a real estate agent' here: http://www.hallmarkabstractllc.com/how-would-you-rate-your-real-estate-broker/.
Include exactly how the agent did the job well and a link to the agents website.
Mike Haltman, President
Hallmark Abstract Service
I'm a real estate agent and I would never engage in any deceptive practices. Guess what? Not only do I have ethical problems with doing that, but I could lose my license and be fined A LOT of money. I'm positive that the vast majority of other real estate agents would also never behave in the ways detailed in this article.
Real estate agents are people, and as in every single profession, you're going to have a handful of dishonest people. But to make it seem that most RE agents are, is erroneous and disgustingly untrue.
Yes, RE agents do a ton of work to sell your house, and their commission usually pays for itself and over.
If you ever have any issues with your RE agent, bring it up to them. If it doesn't get better, call their brokerage office, and speak to the manager. If that doesn't help, contact your state's occupational and professional department.
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My realtor took pictures of my house and that is good buuuuuuuuuut... she took picutes where you can see the T.V and furniture, my paitings and everything else I have and I leave by my self. Also she posted the house have 3 bedroom when is 2 . What can I do I am so scare that someone wil try to break in my home...
contract and closing
83 Enter into personal website
My PUBLIC open houses are non existent for the most part unless the seller insists. For the very reason that you stated.
>>>This is news to maybe 1% of the sellers I meet.
>>>>Where do you get this garbage from? Can you document agents who did not submit an offer? THis is just asinine.
MSN should retract this article and have someone correct it's deliberate obfuscations.
1.Open houses are mostly for the benefit of the broker, but they still are useful. Right now there are so few listings, getting prospects all in over a weekend can more easily trigger a bidding war instead of bids coming in sequentially. Bidding wars = higher sales prices.
2. In NJ there is a big difference between a buyers agent and a transaction broker. A buyers agent is where the buyer actually hires the agent through a written agreement. Under the agreement the agent must advocate for the buyer and proactively raise concerns ie raise the questions the buyer may not even think of. If they didn't sign that agreement the client is working with the agent as a transaction broker which is essentially a sub agent of the listing agent and do not have to proactively raise issues the buyer hadn't considered. The author of this article took a quote from a Maryland based firm and assumed it applies everywhere. I question whether or not it is accurate for Maryland either.
3. We are not lawyers and should not answer any questions about zoning. In NJ, that's the attorneys job. The author later criticizes that some agents act as lawyers. You can't have it both ways where the agent should know zoning but not opine on other legal considerations. NJ is different than most states because of a 197? class action lawsuit won by real estate lawyers against all 3 major real estate associations. It's a shame because realtors are in the best position to inform buyers about zoning and a whole host of items, remediation, rent control but because the lawyers want clients to pay bigger fees they sued and we really can't say anything. NJ has some of the highest real estate legal fees in the country. Most states, people don't use lawyers to close. If they do typical fees are in the $100's. In NJ real estate attorney's charge $1500 to $2500 and people coming here from other parts of the country are shocked. I think we need a new level of licensing that allows a licensee to provide this advice because so many clients expect it. A CPA can opine on IRS code why shouldn't a real estate agent talk about applicable laws that impact real estate?
Again, the author here is not recognizing real estate law varies greatly by state.
It is because buying a house is such an emotional issue that this article attracts such vehement responses from members of the public who have been mistreated by real estate agents. I am a licensed broker in Florida and, while it is hard to defend the actions of some of my contemporaries, there are others whom I try to emulate daily. I constantly see some agents pushing the boundaries of ethics and law, while others create value for their clients far beyond the commissions or fees that they charge.
Most of the posts on this article relate to homsellers and buyers and the biggest problem there is that the timeline of a real estate transaction is variable, while the compensation paid and earned is a percentage. It can be extended or shrunken based on the will and influence of any of the parties. So the typical complaint is that an agent is pushing for a sale, trying to shorten the timeline because, as soon as the closing is completed the title agent prints a check for the brokers involved. This combined with an almost monopolistic adherence to a certain percentage for a commission fee creates a window of greed that many agents and brokers are only too happy to leap through. A substandard agent on either side of the transaction, even an honest one, is likely to allow a sale price to creep upward when they are paid a percentage. This is more a symptom than a problem, though, as a well-trained and conscientious agent is able to put the client's interests above their own.
Having said that, it is also clear that many disgruntled posters here have never had a good experience with a top-flight realtor. Many people here brag about selling their own house, unaided, in a week or two. And while it is nice to have that feeling of accomplishment, I know that every time I have been involved in a quick transaction I have walked away feeling that I left money on the table... There is no doubt that when a home is priced correctly it will sell, and also that the market determines price, not an agent, but if you sell a $300k house at 10% lower than the market would allow, you have forfeited $30k. If you asked around, found a top agent that could get you that extra 10% by being immersed in your transaction in a way that you can't because of work, life, etc., you would net out an extra $10-15k. Oh, and you also wouldn't have to buy the sign, submit the ads, take the calls, attend the showings, and learn the workings of a property transaction. And for the final gravy, if anything did go wrong in that transaction, you would have an extra level of protection from litigation in the form of the professional's insurance.
I could rant all day about the pros and cons of agents. I could also carry on about buyers and sellers and their expectations and shortcomings. But the fact is that I have to get back to doing by best to be a scrupulous, hard-working, and dedicated professional for my customers. The bottom line is that in any industry there will always be people who are smarter and more committed than others. Whether they are licensed professionals or simple hobbyists, they will have the advantage in the field.
In real estate, if you feel the need to be represented because there is a chance that the worth of the assistance is greater than the price you pay (the essence of value), then ask around. Because there are agents out there in every community who are worthy. If you do have the time and the inclination to learn the trade and sell your own house then you should, by all means, do so. And after that, if you are also honest, maybe you should go get a license and come work for me.