I almost dropped my phone when I read the Bear Stearns headline this morning. That’s what I get for not keeping up with the news over the weekend.

I was getting frustrated with a realtor i was working with, because i kept asking for comparable rentals, and he said it’s too hard to find those. He asks me when i’m thinking of buying, and i say when it’s cheaper to buy than to rent. And so on…
Plus, my wife and i kept finding more places and more info than he was giving us. So i hated the idea of him getting a commission. So Redfin seemed like such a great deal at that time. Especially since their search site is the best i’ve found so far.

As a 1st time homebuyer, i think it’s safer to hire a pro to go through the paperwork. Esp if it’s only 500-1000. Thanks for the info. What’s the best way to look for someone?

But if you want to buy a house, let’s say for 800K – there is no reason for you to assume that the commission is going to be split equally (or even paid) to realtors on *each* side, and at the tune of $24K per agent.

That’s what I mean when I say – why pay Redfin, why pay a buyer’s agent? If you identify a property that is on the MLS and currently contracted with a realtor, the only commission that must be paid is to the listing agent. But you can easily negotiate with the seller and the agent, and keep what you would see as the partial commission by not using a buyer’s agent OR Redfin, and paying a reduced price for the property. You simply have to get the paperwork yourself, and if you want someone to hold your hand with the paperwork, hire someone independently to the tune of about $500-1000 to do it (depends on a few things, but generally speaking). It sure beats paying 15-20X those numbers.

Technically, the listing/selling agent will still be making money off the sale – and from the dollars you bring to the transaction, as you have noted. I guarantee you though, when it comes time for you to sell said house, you will instantly see it from the seller’s perspective and the commission that YOU pay directly to the listing agent. If you choose to contract with an agent, that is.

I own a brokerage (not RE related). In order to purchase something, clients *must* use a broker in my business. That’s how I make money – you can’t buy direct. But in RE, you often can. It just takes a little knowledge and effort.

Doesn’t mean RE agents are going to go the way of blacksmiths and travel agents. I have used excellent realtors in the past, and will in the future. It just means that you don’t, always, have to use them, or pay standard commission in every case.

And the 6% thing is long gone, at least where I live. Buyer’s market! You are in the driver’s seat.

.)

Patients pay for my services.
I ‘pay’ for my realtor’s services.

If patients do some of the work themselves, or choose somebody else to do half the work, they get a discount.

If i find and research the house on my own, or use a lawyer/redfin, then i’ll get a discount.

$8000 on an 800k house

If an attorney or escrow company charges less than that for paperwork, then sure i would use them. Do they?

but this is how i imagine it:

I buy house for 800k
24k (3%) goes to seller’s agent.
24k goes to buyer’s agent.

if i represent myself, i can ask seller to decrease price to 776k, or i pocket the 24k, or however it’s done. i still feel like i’m ‘paying’ my agent if i use his services. Is this not correct?

I know seller technically pays commission since it states that on the paperwork. I’m just saying that it’s all priced into the transaction. If i do more of the work myself, then i’ll get a discount. If don’t, then I have to pay up for services. That’s what i meant when i said “what the heck am i paying the realtor up to $24,000 for??” when i’m doing the research and house hunting myself.

You are a physician, correct? Your argument is akin to saying that your patients pay your bills. In my case it is akin to saying that my clients pay my bills.

I fundamentally disagree with those statements/arguments.

But I fully expect you to be back to argue about it

If you are implying that the sales price is inflated by the seller to pay his/her realtor *and* the agent bringing the buyer, then yes, I can see what you mean. But that’s not “paying up to $24,000″? I’m confused – where did you get that particular number?

BTW, I sold my primary residence in January and pocketed the commission that would have gone to an agent that had SOLD my house – if I hadn’t sold it myself and not bothered to use a realtor. So I fully understand the commission structure, after doing it both ways through the years, with/without a realtor. (I explained this to SBG on this blog about a month ago).

In this crappy market, you could probably knock on a seller’s door and not even use a realtor – the seller would be doing backflips that someone was actually interested/able to buy their house. So I’d say you have all the ammo you need to negotiate down that $24K you think you are paying directly to a realtor.

And as for using Redfin – why use them at all? You can represent yourself and just have an escrow company and/or attorney help you with the purchasing paperwork for far less than Redfin will try to eek out of the deal. Redfin just wants to make money off of you. Walk up to the selling agent and hand them a purchase contract. For that matter, call the owner from the phone book and tell them you want to buy their house. THEY work out the commission details with THEIR realtor – not you.

Clearly it is standard operating procedure for the seller to pay the commissions, not the buyer, regardless of that weak 2006 article on HUD housing says. Never purchased a HUD home – never plan to.

Check out:
realtytimes.com/rtpages/19990825_commission.htm
Who Really Pays the Commission?

http://www.forsalebyownercenter.com/blog/2006/08/who-really-pays-for-realtor-commission.html

All i care about is that if I use Redfin, the 2/3rds commission rebate goes into my pocket. If I use a trad realtor, I lose that rebate. Sounds to me like i’m the one paying the commish.