Question about realtor for buying a house
Jun 29th 2009, 10:14 am
#16
Joined: Aug 2005
Posts: 14,227
Re: Question about realtor for buying a house
This is true.
I think this is to misunderstand a realtor's motivation. In BC the standard commission rate is 7% on the first $100,000 and 2.5% on the balance (I say standard because it is very negotiable). The listing realtor gets 51% and the selling realtor 49% (I think, but stand to be corrected). Therefore, for each additional $10,000 the listing agent's client spends they will get $122.50 in commission, less whatever the brokerage takes.
A good realtor will probably want to take their clients to a slightly more expensive house than their budget just so their clients are aware of what the extra dollars can buy (just as they should show them a slightly cheaper house). However, the financial motivation to sell their clients a house they cannot afford is far outweighed by the references they get from happy customers.
The realtors who make serious money spend years and years building up a reputation as the "go to" people in their neighborhood. One disgruntled client can ruin years of hard work.
I think this is to misunderstand a realtor's motivation. In BC the standard commission rate is 7% on the first $100,000 and 2.5% on the balance (I say standard because it is very negotiable). The listing realtor gets 51% and the selling realtor 49% (I think, but stand to be corrected). Therefore, for each additional $10,000 the listing agent's client spends they will get $122.50 in commission, less whatever the brokerage takes.
A good realtor will probably want to take their clients to a slightly more expensive house than their budget just so their clients are aware of what the extra dollars can buy (just as they should show them a slightly cheaper house). However, the financial motivation to sell their clients a house they cannot afford is far outweighed by the references they get from happy customers.
The realtors who make serious money spend years and years building up a reputation as the "go to" people in their neighborhood. One disgruntled client can ruin years of hard work.
Jun 29th 2009, 10:51 am
#17
Binned by Muderators
Joined: Jul 2007
Location: White Rock BC
Posts: 11,688
Re: Question about realtor for buying a house
When we bought our current home the market was crazy. Houses in White Rock and the surrounding area would spend a day or two on the market if they were in any way sensibly priced. Our realtor took us to one house that was in an ideal location. We knew that it was a 30 year old house but didn't realize that nothing inside had been done for 30 years.
We would have offered near the asking price but she said no, the asking price was for a renovated house and in the condition it was in we should offer at least $50k less. We did and it was rejected.
Two weeks later a house in the next street came on the market. It was on a better lot, had some renovations done and was asking $50,000 less than the previous house.
Jun 29th 2009, 11:27 am
#18
Joined: Aug 2005
Posts: 14,227
Re: Question about realtor for buying a house
The trouble is, that if your realtor does not not know a) how much you want to spend and b) how much you would spend if the perfect house came on the market, it makes it difficult for them to find you the house that suits you best.
When we bought our current home the market was crazy. Houses in White Rock and the surrounding area would spend a day or two on the market if they were in any way sensibly priced. Our realtor took us to one house that was in an ideal location. We knew that it was a 30 year old house but didn't realize that nothing inside had been done for 30 years.
We would have offered near the asking price but she said no, the asking price was for a renovated house and in the condition it was in we should offer at least $50k less. We did and it was rejected.
Two weeks later a house in the next street came on the market. It was on a better lot, had some renovations done and was asking $50,000 less than the previous house.
When we bought our current home the market was crazy. Houses in White Rock and the surrounding area would spend a day or two on the market if they were in any way sensibly priced. Our realtor took us to one house that was in an ideal location. We knew that it was a 30 year old house but didn't realize that nothing inside had been done for 30 years.
We would have offered near the asking price but she said no, the asking price was for a renovated house and in the condition it was in we should offer at least $50k less. We did and it was rejected.
Two weeks later a house in the next street came on the market. It was on a better lot, had some renovations done and was asking $50,000 less than the previous house.
Jun 29th 2009, 12:28 pm
#19
Banned
Joined: Dec 2005
Location: Cochrane near Calgary, Alberta
Posts: 667
Re: Question about realtor for buying a house
Is there anything stopping a buyer from using more than one agent for the purchase? A rule that limits a buyer to using one agent only might be considered to be a limit on competition against the interest of the buyer.
If a buyer uses one agent for a purchase and after a while is not satisfied with the service and changes to another agent is there any liability for any cost to the first agent?
If a buyer uses one agent for a purchase and after a while is not satisfied with the service and changes to another agent is there any liability for any cost to the first agent?
In Alberta we have a buyers contract which some agents use to commit the buyer to them. Some of them even offer 'free services' like cell phone use, airport pickup etc etc and then if you do not buy through them they charge you between $500-$1600.
Of course not all realtors are like this and I do not even make anyone sign the form. If you don't like me, and don't want to use me as your agent then I would rather move on than waste my time showing you houses if you are going to then go with an other agent and buy a house through them.
The other issue to consider is normally when people buy a house it is the most expensive purchase they are going to make. You have to feel confident that the agent is working for you and in your best interests.
Jun 29th 2009, 12:48 pm
#20
Joined: Aug 2005
Posts: 14,227
Re: Question about realtor for buying a house
If you have started working with a realtor then it is common curtosy to continue. To use two realtors at the same time for no reason would be wasting the realtors time. If they sense you are wasting their time then how much are they going to be committed to working with you.
In Alberta we have a buyers contract which some agents use to commit the buyer to them. Some of them even offer 'free services' like cell phone use, airport pickup etc etc and then if you do not buy through them they charge you between $500-$1600.
Of course not all realtors are like this and I do not even make anyone sign the form. If you don't like me, and don't want to use me as your agent then I would rather move on than waste my time showing you houses if you are going to then go with an other agent and buy a house through them.
The other issue to consider is normally when people buy a house it is the most expensive purchase they are going to make. You have to feel confident that the agent is working for you and in your best interests.
In Alberta we have a buyers contract which some agents use to commit the buyer to them. Some of them even offer 'free services' like cell phone use, airport pickup etc etc and then if you do not buy through them they charge you between $500-$1600.
Of course not all realtors are like this and I do not even make anyone sign the form. If you don't like me, and don't want to use me as your agent then I would rather move on than waste my time showing you houses if you are going to then go with an other agent and buy a house through them.
The other issue to consider is normally when people buy a house it is the most expensive purchase they are going to make. You have to feel confident that the agent is working for you and in your best interests.
Jun 29th 2009, 12:59 pm
#21
Banned
Joined: Dec 2005
Location: Cochrane near Calgary, Alberta
Posts: 667
Re: Question about realtor for buying a house
I am allowed to do Calgary, Airdrie, Okotoks, Strathmore and of course Cochrane and all the small towns around.
If you go so somewhere like Banff or Canmore then it best to get a local realtor. I can sell and buy there, but for some unknown reason local realtors do not always use the MLS and you may get the best deal with a local realtor.
Jun 30th 2009, 12:55 pm
#22
West Coast Enthusiast
Joined: Nov 2004
Location: Sunshine Coast
Posts: 332
Re: Question about realtor for buying a house
Look for someone in each area that you can trust.
Warmly,
Frank
Jun 30th 2009, 6:40 pm
#23
Joined: Aug 2005
Posts: 14,227
Re: Question about realtor for buying a house
No realtor can be an expert in areas THAT far apart. We work in Vancouver and the north shore and whenever someone is looking outside those areas we refer them to someone we trust in the area. Of course the realtor can act for you, but their knowledge of the market is not going to be much help.
Look for someone in each area that you can trust.
Warmly,
Frank
Look for someone in each area that you can trust.
Warmly,
Frank
