All Forum Posts by: David Weiss

 This is for buying , correct ?

Just use option 3.

Reason is simple. Inventory is very limited anyway. And the "negotiation" hahaha .... do yoy think negotiation is working by the buyer agent, no it relies on the desperation of seller LOL

In all seriousness, modern transaction should not need buyer and seller agent. Just like buying a car in Carmax. You like it you buy with no haggle price

@David Weiss

great question!  I guess you have to ask yourself a couple of things before you make any decisions.

1. If you aren't using an agent, how comfortable are you negotiating a 1.5mil deal?  Do you know about concessions, temporary buydowns, contracts, how to negotiate inspections, appraisals, final walk throughs, organize the deal with title?  There are A LOT of things agent do behind the scenes that most folks don't know about.  If you are comfortable and have good experience doing these things, then definitely go this route!

2. Regarding the discount agent...someone who is charging only a flat fee to you is scary.  To your point of no incentive to get you to the closing table..the key word is incentive.  I would assume their only incentive is to get you to sign with him, after that, they has no incentive of negotiating you a better deal or not.  You have to realize, any excellent buyers agent is going to do EVERYTHING they can to get you the best deal possible.  If they do that, you are their best referral partner.  Their reputation is critical, and I can't speak for anyone else, but I would never do anything to jeopardize that with my clients.  If there are things missed because you hired the cheapest agent you can find, it could cost you far more than you thought by trying to skimp out on having a professional work for you.

Best of luck with everything.

You have clearly come to the forums with your mind made up, so I'm not sure why you posed the question to begin with.

I will spell this out very clearly to be sure that nothing is up for interpretation: Option #3 is a bad plan. 

I would never, and I mean never hire an agent who was willing to take a $5,000 flat fee on a $1.5mm transaction (unless I brought them the deal myself).

You want a discount broker to be doing your negotiations? Be prepared to pay more than necessary for the deal. It's that simple.

Last I'll just speak to your point about the commission structure incentivizing an agent to get you to pay more for the property. In real life, this couldn't be farther from the truth.

-If you pay $1.5mm for the deal, your agent at 3% will make $45,000

-If you pay $1.35mm for the deal, your agent at 3% will make $40,500

A good real estate agent will negotiate that thing down for you all day long. Because good real estate agents are in this for the long term relationship. They know that if they perform for you today, they are going to get your business potentially for a lifetime. Think they will jeopardize that over a measly $4,500?

Option 4 is to get your own real estate license.  This is what I ended up doing after a couple of deals.  The pre-licensing education requirement was a little tedious, but not hard, and the exam wasn't too difficult either.

Aside from the possibility of representing yourself, having your own license also allows you to negotiate for commission spits or discounts if you do decide to hire another agent to represent you.

I've also made some pretty good side money on commission splits when I refer friends and family to another agent.

Sure. I've bought a lot of deals using Option 1 and Option 2. So both of those are fine. 

I wouldn't do a deal with an agent who has an Option 3 structure. To me that just screams 'desperate' or 'discount broker.' Which you don't want when you're looking to deploy $1.5mm.

If you go directly to the listing agent (option 1) you will be able to probably negotiate the total commission down, which might land you a bit of a better price on the house since the seller will net more. But the agent will still have a responsibility to act in the best interest of the seller (meaning they will not be there to represent you and your best interests).

A good buyers agent is worth their weight in gold. Negotiation is both a skill and an art. If you have a good buyers agent on your side, they should be able to negotiate the deal down far more than their 3% commission rate. On the last deal I bought with an agent, I bought the house for about 15% off of the asking price. Why? Because my agent is stubbornly persistent and a great negotiator.

I'd personally go with 2. You get someone looking out for your interests, and at that price point they may be able to save you that same 40k that you feel you're saving on option 3. 

For option 3, I don't like the idea of paying something upfront and losing it if a deal doesn't close. 

Option 2

I would worry less about the agent's money and focus on getting the deal as low as possible.