Anyone have any tips on handling a realtor and seller?

I would say that they are very invested in making the sale, thus they will not want the price to be higher than you are willing/able to pay even if it would result in a higher commission. That being said, find someone who you feel you can talk to.

Your realtor is not on your side unless they have signed an agreement to be a buyer’s agent. Otherwise, they represent the seller.

The agent will only get paid if he makes a sale, so there is a balance between wanting the highest commission and getting zero.

Always do a lot of research to find out the actual sales prices of comparable houses in your area, and the number of days they were on the market. The agent can present you with that information. Ask for it. Do not rely on asking prices, since the actual value of a house is it’s selling price.

Do look at as many houses as you can in your price range. Try not to fall in love with one specific house, because there is always one just as good near by. As you are looking, take pictures to help you remember the features you like.

Depends on your state laws. Some states the realtors are always working for the seller, whether they are helping the buyer or the seller. Some states you can have a realtor representing the buyer. Some state’s there is the option that the reator represents the “deal.”

Do you know what type of agreement you have with your realtor? They probably provided you with a disclosure to sign.

Even if they are representing you they also have a vested interest in the deal closing of course. When I was a realtor (I am still licensed, but not a realtor) if I believed my client was getting harmed, I would have supported the dealing falling apart, or doing what I had to to protect my client. I don’t like to see anyone be treated unfairly, I always would have treated them as I would want to be treated, same with my partner. But, that does not always happen of course. Sometimes a seller or buyer is going through some buyer’s or seller’s remorse, or might have their expectations a little off for the realities of the market and might feel their realtor is not helping them when indeed they are.

But, there are plenty of realtors just looking towards their own bottom line, who don’t care about giving good service, and don’t think long term. They aren’t thinking you will use them in the future or refer them etc.

I should mention that not only are their laws governing what type of relationship your realtor owes you, but being part of the realtor association requires and extra layer of ethical conduct.

My best advice is get a referral from a friend if you can. Read the disclosures you are given. If no disclosures a provided look up your state, actually you can look up the law in your state ahead of time. I do recommend using a realtor. On the buyers side it is almost always worth it to use a realtor.

Okay, the house is selling for $100,000.
The realtor tells you to offer $105K, and tells you to ask for $5K back from the seller.
This increases the realtors commission by $300. It increases the loan, which you will end up paying double. It increases the appraisal amount you can expect on your house, increasing the amount you’ll have to pay every year in real estate taxes. It puts some money in your pocket at the moment, but at great cost.

@filmfann The scheme you have described is not only unethical, it is fraud. No ethical member of Real Estate Board would suggest such a thing.

@YARNLADY Happened to me when I bought my house 3 years ago, and it happened before 25 years ago when I bought that house.

Yes, what @filmfann describes happened to me, too, two years ago, even though I had hired a buyer’s agent and she presumably had a fiduciary responsibility towards me.

@Pandora, if you want to know the details, PM me.

Back in the day when high appraisals were easy to come by a lot of buyers wanted to up the price, and get cash back.

@filmfann @2davidc8 That amazes me. Why would a buyer even agree to it? In California, you pay 1% of the selling price every year in taxes – a higher selling price = higher taxes.

It makes a lot more sense to do what we did and ask for a lower selling price because of the 20 year old carpets, and pay lower taxes every year. Of course, the value of our house has declined so far, we have appealed our tax appraisal most years for lower taxes.

@YARNLADY We were caught up in the buying process, there were several problems discovered during inspections that needed to be taken care of, too many things to be taken care of, so we weren’t thinking through every detail. We also assumed that since we had our own agent, that she had our best interests in mind. Uh oh. Bad assumption. I will admit that she did do some good things, but in the end she mainly wanted the transaction to go through.

@YARNLADY @2davidc8 So you gave cash back at closing to cover the things that needed to be fixed right? Not that the buyer paid more for the house. Wait were you the seller or buyer?

@JLeslie We’ve been both. As a buyer, we have always paid for title insurance and inspection. The first house we bought was a brand new show home. When we discovered a couple of serious builders defects, we filed with the seller’s insurance company and got them fixed.

When we sold our second house, we received the asking price, but then we had to pay for an asbestos removal before the sale could be finalized.

When we bought our present house, we made a lower than asking price offer due to the deteriorated condition of the house and it was accepted.

@JLeslie We were the buyer.

@2davidc8 So they didn’t raise the price did they? They just credited you back money at closing right?

@YARNLADY that all souds very normal and ethical. I am pretty sure you think so too.

@JLeslie @YARNLADY The actual transaction was a bit more complicated. I’ll leave out some details so as to not confuse the issue, but here in a nutshell are the relevant parts:
After some negotiation, the agreed upon price was $790K. But inspection turned up a drainage problem that would cost $7500 to fix. The offer was contingent upon satisfactory inspection, so we had the option to take our offer off the table. We wanted to offer $790K minus $7500 = $782,500 to take care of the problem. Our realtor said why don’t we stick with $790K but instead ask the seller to credit us $7500 at closing? This sounded like it would be essentially the same cost, so we said OK. In fact, since we weren’t thinking of changing the loan amount, the higher $790K sale price would actually result in a lower LTV; seemed like a good thing.

However, we weren’t thinking taxes. Taxes on $790,000 would be more than taxes on $782,500, and this would be year after year, not just a one-time thing. Also, the RE agent’s commission would be higher since it is based on sale price. In this case, it was higher by 3% of $7500, or $225, of which she would have to share half with her broker, or effectively just $112. Why she would saddle us with higher taxes every year just for a one-time gain of $112, is something I have a hard time understanding.

@2davidc8 What your realtor did was fine. Her suggestion seemed to keep the deal together, which is fine, you liked the house. The taxes are minimal, and rarely does a county use the exact sales price. It is usually based on appraised price. So since a sale price does help determine sale prices for the neighborhood, it does matter in that way. An objective appraisal by the county would not include the drainage problem most likely, so your house is assessed properly based on market value.

A realtor would not care about making a little more money, they would care more about keeping the deal together. If bringing the deal down $7500 would have kept it together she would have been find with it most likely.

When you go to sell, if the market goes up, you will have less of a profit, which is good. If your property had gone up significantly, which was happening several years ago, good to keep the profit down so you don’t pay taxes on the profit. You will have the higher price, plus imrpovements to subtract from profit.

The broker / agent engaged by the seller represents the seller and the seller’s interests. That can’t be overstated. That person is “the sales person for the property”, period. Of course they will be nice to buyers; they need to attract them! And of course (if they have any ethics – and sense!) they will admit that maybe the place isn’t perfect. But they are trying to sell the house. It isn’t in their interest to help you find a house that may be a better fit for you, more in line with your dream house, etc. They are trying to sell the house that they’ve been engaged to sell. That’s their job and function, and it’s how they get paid.

On the other hand, as has already been pointed out, you can privately contract with a broker / agent to represent you as a purchaser or potential purchaser. They may still tend to show primarily properties that are represented by other brokers (since a commission will have already been contracted for, and all they have to do then is split the commission with the listing agent, which is a common arrangement). I don’t even know how a buyer’s broker would receive a commission on the sale of a non-listed house, unless you paid the commission to her separately. That would be a riskier proposition for the agent, since it would be difficult to write that commission payment into the closing contract, so the entire payment could be at risk.

@2davidc8 Oh, I see. Thanks for the details.

@CWOTUS It depends on the state and the relationship with the broker, the seller’s broker does not always represent the seller. In FL you can be a single agent or a transaction agent. The single agent has more fiduciary responsibilities With limited confidentiality to the client, while a transaction broker still must be honest and ethical, but their responsibilites are more limited and they basically represent the transaction.

@JLeslie Thank you for your input.

@2davidc8 Sure, no problem. I hope it made you feel better about your purchase if you were having any regrets.