As you probably know by now, the Steinhardts are house hunting.
We’ve been doing this pretty much on our own. We simply find ads in the paper for houses, go look at them, ask questions, ask prices and say “yea” or “nay.”
Well, we’ve found one we like and we’re ready to say “yea.” To this point, we’ve been doing this without a broker, etc.
We’re at the point where we’re ready to make an offer. However, before we do so, I’d like to get a comparative market analysis done for homes sold in the last 6 months in the area. How do I go about doing that? Do I just waltz into a real estate office, describe the house and ask them to spit out a report for me? How much does that typically cost? Should I ask the seller’s agent for it? Of course, since she works for the seller and not me, should I be worried that it’s not accurate?
Of course, we’re going to have an inspector look at it nine ways to Sunday and have a lawyer draw up & review all the documents. Assuming that the CMA comes back OK and the house appraises for a reasonable price, is there any reason that we would still need a broker/buyer’s agent? And if so, how would I go about getting one (just waltz into a real estate office?) and how much would one cost?
The resale history of homes in the area should be readily available and any real estate agent should be able to put together a comprehensive comparison package for you relatively easily.
Certainly, they will not do it for free - rather they will ask you to sign up with them. In the end, it does cost you nothing though as the comission on the sale of the house is paid for by the seller to both agents.
Since there is no real cost to you, I would recommend signing up with an agent. Not only can they give you the information you need with regards to the house you have your eye on, they can also let you know of new houses that go on the market that might interest you before they show up in the paper.
If you didn’t have a buyer’s agent when you first looked at the house it’s possible that the selling agent will consider you as belonging to him/her and will not share commission with the buyer’s agent.
Did you sign any kind of contract? Did the listing agent actively recruit you to come look at the house? If the answer is no, then you should be free to use whoever you want.
Generally there are two commissions on the contract for the sale of the house - one for the listing agent, one for the buying agent. They might not be the same. Also, if the selling agent and the buying agent are the same, the combined commission could be less than the two individual commissions together.
When you went into the house and signed in (or whatnot) you became property of the selling agent for purposes of commission.
That’s why when you have a buyer’s agent they always either take you to the houses themselves or tell you to tell the listing agent ‘I have a buyer’s agent’ the minute you walk in the door.
You can always try it. But most buyer’s agents will be leery of taking you on to help buy a place that another agent thinks is exclusively theirs, if you get me. But you can always hardball and say, “I have a buyer’s agent now. If you want me to buy this house you’ll work with him/her.”
Really, it’s a matter of negotiations between the agents. But having a buyer’s agent can help moving the process along for you at times.
No, we didn’t sign anything with anyone. All we did was look at places, find one we like and let the agent know that we’re interested in making an offer. No formal offer was made yet.
Judging from our search, I’m fairly certain that a CMA will show that we are playing in the proper range. But I’d just like to be sure.
So, if I were to waltz into a real estate office now and say "I found a house that I like, I’m ready to make an offer, but I want someone to do a CMA and represent me, " what would be the consequences? Could I get stuck with paying his/her commission? Would I cause the seller’s agent (who, BTW, lives on the same block that we’d be moving to – so I don’t want to make her angry!) a significant financial loss by having to split the commission?
First of all, you would not necessarily be causing her significant financial loss should you use the services of a different agent. There are two separate commission amounts on the sale of the house (buying and selling agent) and she was never guaranteed to get both of them.
Also, there is nothing preventing you from signing up with her as your agent. She can do a CMA for you. She should represent your interests as well as her clients. The people who are selling the house will have signed a contract with the agent which contains a “dual agent” clause. This clause basically indicates that if the agent is representing both parties in the transaction, she will not divulge any inside information to the other side (i.e. the maximum you will be willing to buy the house for/the minimum they will be willing to accept). Real estate agents have a code of ethics they must follow like many professional organizations.
OK, then they probably DO consider the commision as theirs (the sellers agent). But if you go in and explain the situation to a buyer’s agent you can see what happens. What’s the worst that can go wrong? You canNOT be required to pay the commission yourself unless you agree to do so (I’ve seen this happen a few times) so there’s no real risk.
And I’ve always liked (well, two house purchases worth) having a buyer’s agent. I like having someone else do the minutiae for me. And they don’t get paid until the sale goes through so they’re motivated.
mske, in Canada they have set commissions like that? In my experience (Maryland and Virginia, USA) the full commission is set (usually 6% around here) and the seller gets it all unless there’s a buyer’s agent in which case it’s split down the middle.
So under that system there’s a significant risk involved for the seller to suddenly find another agent on the other side of the table.
Seriously, is that done? Isn’t there an inherent conflict of interest in that?
She’s a nice enough person (and, as I said, a potential neighbor). I wouldn’t mind using her as an agent, provided that it could work out. Should I bring this up with her?
Yup. Commissions are broken out by buying agent and selling agent. And if it is a “dual agent” situation, you can negotiate a commission rate that is lower than the two commission rates combined.
O.K. Jonathan Chance has determined that things work differently for you down there. But in case you decide to move to Canada…
Commissions are always paid by the seller of the house. You, as the buyer pay nothing to the agent (at least you shouldn’t). If there are two different agents involved in the transaction, the seller of the house splits the total commission between the two agents (U.S.) or pays the contracted commission rates (which could be different) to the buying agent and the selling agent (Canada). If the agent for the seller and the buyer are the same, the agent gets to keep the whole commission (U.S.) or receives a commission rate that could be different than the individual buyer agent + seller agent commission if it was negotiated that way (Canada).
If you wish to “sign up” with the current selling agent, ask her if she is bound by a “dual agent” clause. If she is, technically she will work just as hard for you to get the price down as she will for the seller to get the price up.
Also, don’t be worried that if you use a different agent she will be pissed off at you and now she’s living next to you. Put it the other way - you use her and you find out later on that she screwed you somehow on the deal, and now you are living next to her. Mwwaahahahaha…