bostonbubble.com

[prokeds]

I've been reading this forum for at least a year, and really value it as an antidote to the mainstream press when it comes to real estate. My wife and I (prospective first-time buyers) have been looking off and on since 2003. We're not in any rush (obviously!) but would like to own something eventually.

We worked with an agent for a while but when he asked my wife "do you really need a kitchen?" while we were standing in a 40-year-old, semi-functional kitchen, I knew we'd have to get rid of him. Before him there was one who'd call me about new listings a day or two after I'd already found them on the MLS.

We have cousins that recently sold a condo and bought a house in Newton, and they were telling us--seriously--how lucky they were that their buyer's agent and the listing broker for their new house worked in the same RE office, "so that she could find out for us what we really had to offer to get the place." I had to keep from shouting "collusion!" and not being invited to the housewarming.

Friends who looked for a long time and bought during the run-up in 2001 made their offer to a listing agent directly, dangling the carrot of a double commission, and this worked for them. Twice this year that we've almost made offers, it would have been to the listing agent, but we got cold feet, and the eventual selling prices were significantly above what we would have offered. We don't regret those decisions for a moment and a buyer's agent might have swayed us into making a big mistake.

We've been reading daily MLS listings and going to open houses ourselves, and feel like we know (more or less) exactly what we're looking for, and that a buyer's agent is more likely to try and rush us and/or discourage us from lowballing than to show us something we wouldn't find on our own. On the other hand, our lawyer--a real bulldog--thinks an agent might be useful to get us into properties before they show up on MLS (I've heard stories about this from several acquaintences).

So what does the collective wisdom of this group think about buyer's agents?

[admin]

A lot of the problems you describe sound like they could be countered by using a buyer's agent who agrees to refund his/her portion of the commission to you and work under an alternative fee structure (e.g., an hourly rate). I don't have direct experience with this myself yet, but when I do buy it is something that I will definitely look into since it is like getting a ~3% discount if you end up doing most of the work yourself, and you at least have the choice of how much you want to do by yourself. As for agents who operate like this, Bill Wendel comes to mind because he was very early in warning buyers about the housing bubble and because he frequently comments on the conflict of interest inherent in dual agency. Note that I haven't used his services myself (nor have I used any other agents' services for purchasing yet).

- admin

[admin]

prokeds,

It sounds like the problem you described about buyer's agents discouraging you from lowballing may be widespread. Check out this Globe blog entry by buyer's agent Rona Fischman, and especially the accompanying comments:

http://www.boston.com/realestate/news/blogs/renow/2007/10/when_is_a_lowba.html

She says in the comments that she would not accept clients that want to offer 15% below current prices (even though that is roughly where the futures market predicts Boston prices will be in a few years). I see why she might do that as an individual agent since her docket is full, but when all agents are doing the same thing, it ends up excluding the potential buyers who could help end the sluggishness of sales.

It is no wonder that real estate corrections stretch out for painfully long periods of time, given that just about everybody involved actively works against just ripping the band-aid off quickly.

An agent who is compensated hourly may be more amenable to lowballing. If you do try that approach, let us know how it works.

- admin

[Dorchester grandma]

I have had the same agent for the two years that I have been looking. He has been to 3 house inspections with me and told me not to buy when a condo became an asbestos nightmare when it was carelessly and illegally removed. He lost out on that one too.

This agent works in Haverhill and Southern New Hampshire so he must travel a long distance to show me places in Lynn where I am now looking. He does not know Lynn at all and parts of Lynn are pretty awful so I have to do all the investigation myself. A realtor in Lynn would surely know the areas better. However, this realtor has been the greatest so I want him to make the commission when I finally do buy. It is tough for a realtor to work with someone buying on the low end. You see such squalid places and have to keep looking and looking.

From what I have been told, Lynn is fine if you stay away from the center of Lynn where the median income is only $12,000. If anyone out there knows Lynn neighborhoods, please let me know. East Lynn is lovely and near the beach but I know little about other areas. There are many inexpensive single families there, many bank owned. I have seen a lot of discussion about buying in Davis Square but for many of us that is not even on the radar screen

[john p]

I used Bob Simone as my buyer's agent:

http://www.realtyplan.com/homes/Agents/Robert_Simone.htm

Bob is a close friend. I think Bob will say the normal things that most buyers agents will tell you to give you perspective to help you understand the seller's perspective. Not so much to make you act on the wishes of the seller, but to understand whether or not the seller is ready. I think the fact that I trusted him helped me be more open to the feedback.

The flip side was that he trusted me and he knew I valued his time as well. Bob was a great negotiator, was great following up on the details and was fun to be around. I understood that schlepping him around to open houses was a waste of his time. I knew that I could do the leg work, the drive-bys and the open houses and just call him in when I wanted to pull the trigger. Bob is in the business for the long haul, and he has no problem helping people find their homes; I just wanted to focus his effort on the matters that would give me the most value (the negotiation and the closing process).

The way I saw it, if you went straight to the selling agent, they ususally make you sign Purchase and Sales agreements that favor the seller. They get the entire commission and nobody is looking out for you.

Bob wasn't shy to low ball for you, but he would tell you that a lower offer would be risky if you really liked the place; meaning if he thought it was a long-shot, he'd tell you.

The attitude that you need to get is like how you get over a girl; find another girl. If you can find 5 or 6 places that you really like and lowball all of them, one might break your way. If you focus too much on one, you get too emotionally attached. I had 5 houses that I could have moved to. Of the 5 the first one that dropped to my wheelhouse I bought. A few months later two more came very close. So, I'd track a bunch.