I'm in California. Is it possible/legal for a buyer to pay a buyer's
agent an added bonus for negotiating a purchase agreement sales price
under the listing price? Is this a contract outside of the purchase
agreement?

I'm having trouble with buyer's agents that seek to get offers at or
above market in order to increase their commission. They're not
really representing the buyers. They're representing themselves.

Ian

In article ,
iforsyth wrote:

I'm in California. Is it possible/legal for a buyer to pay a buyer's
agent an added bonus for negotiating a purchase agreement sales price
under the listing price? Is this a contract outside of the purchase
agreement?

I'm having trouble with buyer's agents that seek to get offers at or
above market in order to increase their commission. They're not
really representing the buyers. They're representing themselves.


With the California real estate market how it is right now, I think they
are trying to buy you a house. Now is not a good time to lowball.


Dimitri

iforsyth wrote in message
om...
I'm in California. Is it possible/legal for a buyer to pay a buyer's
agent an added bonus for negotiating a purchase agreement sales price
under the listing price? Is this a contract outside of the purchase
agreement?

I'm having trouble with buyer's agents that seek to get offers at or
above market in order to increase their commission. They're not
really representing the buyers. They're representing themselves.

Ian

This doesn't make sense. Agents don't raise offers to get more commission.

But, they will not help you to negotiate a lower price because they
are essentially negotiating to get themselves less money. Its the
problem with buyers agency as a whole. If I wanted a buyers agent to
really represent me, I would offer them a bonus if they can negotiate
the price under a certain threshold. If a home is selling for $100,000
(he makes approx $3,000) and he gets it for $80,000 , he just lost
approx $600. I would feel very comfortable paying him the $600 he just
lost for saving me $20,000. Yes you can (and should) offer a bonus if
you want them to really work for you. If you don't sign a buyers
agency agreement, remember that they are always working for the
seller. Anything you say (like how much mortgage you can afford) will
always be repeated to the seller or the sellers agent and could hurt
your negotiating process. Also, be very wary about dealing with a home
listed in the same office as your buying agent. They tend to help out
their co-workers before they will help you.

As a special note for the California real estate market, homes are
selling for above list price all the time. Full list price offers are
very common. People are scrambling to buy homes with these low rates
and they will most likely be gone very soon. They will pay more in
purchase price to buy now than the 30 years of extra interest later.
Problems will come when they want to sell and the rates are higher,
they will be surprised to find out their home will not sell for what
they paid. Unless, of course, they stay in the home for 10+ years.

"JD" wrote in message .com...
iforsyth wrote in message
om...
I'm in California. Is it possible/legal for a buyer to pay a buyer's
agent an added bonus for negotiating a purchase agreement sales price
under the listing price? Is this a contract outside of the purchase
agreement?

I'm having trouble with buyer's agents that seek to get offers at or
above market in order to increase their commission. They're not
really representing the buyers. They're representing themselves.

Ian

This doesn't make sense. Agents don't raise offers to get more commission.

I totally agree with you, except for the fact that there aren't any
lower price offers being accepted. When I bought my first home,
during the height of the market, I managed to skim 40K off of the
asking price. The buyer's agent sadly fought me the whole way down on
price, but what mattered was the motivation of the seller. And she
made the mistake of revealing that he was really motivated. The
seller had found another home in Oklahoma, had already moved there,
and was paying both mortgages on his homes. He wanted to deal. The
agent told me afterwards, "You got a deal!" Two weeks later the city
appraiser calls me and says my price was low and asked if I went
through an agent. That's a big clue that the whole system is rigged to
get you to pay at market.

You could dismiss this as a "one time lucky deal," but I just did it
again this month when I bought my new home. I got 19K off on another
house--not as good as the first house, but well under the list price.
And, honestly, I'm the WORST negotiator on the face of the planet.
This time I represented myself and dealt with the listing agent, who
while slightly in the seller's court, wanted my deal to fly--why?
Increased commission. No buyer's agent was taking their share of the
commission away from him.

Prior to this deal, I contacted another agent that had a house listed
one block away at a cheaper price. I didn't end up buying the house,
but she told me, "You know, everything's going at market. Nothing is
going under. In fact, if you really want a house, you should probably
bid 10K or 15K above."
I emailed her the next day, asking for a CMA report showing the list
and sales price of all properties that sold in that neighborhood for
the last 90 days. I never heard back from her. I expect sales people
to lie, but it's amazing how blatent this lie was.

CMA reports for the areas show that people did manage to get
discounts. They weren't very big, but now and then you would see
10-15K low.

The system really stinks as it is. Everyone's being told how valuable
a buyer's agent is. What they're not being told is how badly they're
being ripped off. No agent I've talked to has ever offered me a CMA
report without me asking for it. There's ALWAYS resistance when I
want a price lower than list price. You can find most of the homes on
online MLS sites with pictures now before the agent even gets word of
the listing. The only thing you don't get is inside information on a
house. My first agent told me after the deal, and I respect her
greatly for this, "You're not going to get a really low price on the
house because all of the realtors want those deals. If they see
something 50% below market, they're going to go after it before you
get to it."

Ian










(Mike) wrote in message om...
But, they will not help you to negotiate a lower price because they
are essentially negotiating to get themselves less money. Its the
problem with buyers agency as a whole. If I wanted a buyers agent to
really represent me, I would offer them a bonus if they can negotiate
the price under a certain threshold. If a home is selling for $100,000
(he makes approx $3,000) and he gets it for $80,000 , he just lost
approx $600. I would feel very comfortable paying him the $600 he just
lost for saving me $20,000. Yes you can (and should) offer a bonus if
you want them to really work for you. If you don't sign a buyers
agency agreement, remember that they are always working for the
seller. Anything you say (like how much mortgage you can afford) will
always be repeated to the seller or the sellers agent and could hurt
your negotiating process. Also, be very wary about dealing with a home
listed in the same office as your buying agent. They tend to help out
their co-workers before they will help you.

As a special note for the California real estate market, homes are
selling for above list price all the time. Full list price offers are
very common. People are scrambling to buy homes with these low rates
and they will most likely be gone very soon. They will pay more in
purchase price to buy now than the 30 years of extra interest later.
Problems will come when they want to sell and the rates are higher,
they will be surprised to find out their home will not sell for what
they paid. Unless, of course, they stay in the home for 10+ years.

"JD" wrote in message .com...
iforsyth wrote in message
om...
I'm in California. Is it possible/legal for a buyer to pay a buyer's
agent an added bonus for negotiating a purchase agreement sales price
under the listing price? Is this a contract outside of the purchase
agreement?

I'm having trouble with buyer's agents that seek to get offers at or
above market in order to increase their commission. They're not
really representing the buyers. They're representing themselves.

Ian

This doesn't make sense. Agents don't raise offers to get more commission.