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In most areas the real estate agents fiduciary responsibility is to the seller (whether they are obtained by the buyer or not), because the seller is the one paying them.
Even if you obtain your own agent to run comps and submit an offer do not disclose your maximum price to them as they are legally obliged to reveal this to the sellers agent.
(I learned this the hard way on my first purchase, I said "I would pay the asking price, but lets put in an offer of X". The sellers response was either pay full ask or I'll take it off the market!
I later took the real estate agents classes to become a more informed consumer and learned about this fiduciary responsibility - makes sense that agents ultimately work for the person who is going to pay them! (and the higher the selling price, the higher the commission!)
This is completely inaccurate in Texas (and most states that I know of). Once the buyer has hired their own agent, that agent's fiduciary responsibility goes legally to the buyer. The seller, by the way, is NOT paying the buyer's agent. The seller is paying their agent, who is then choosing to pass on a portion of their commission to the buyer's agent.
Now, if you use the listing agent and do not establish, on paper, a dual agency or intermediary situation, that agent's fiduciary responsibility is to the seller, of course. Or if you use another agent and don't hire them to represent you, their fiduciary responsibility is to the seller, not to you. (How this is accomplished varies from state to state, but if you sign a buyer's rep agreement with a specific agent to represent you there is NO confusion about where their fiduciary responsibility lies.)
What you're describing was the case a long time ago in a country far far away (the past), where all agents did, indeed, represent the seller and there was no such thing as buyer agency. But that's not been the case for many years.
In most areas the real estate agents fiduciary responsibility is to the seller (whether they are obtained by the buyer or not), because the seller is the one paying them.
Even if you obtain your own agent to run comps and submit an offer do not disclose your maximum price to them as they are legally obliged to reveal this to the sellers agent.
(I learned this the hard way on my first purchase, I said "I would pay the asking price, but lets put in an offer of X". The sellers response was either pay full ask or I'll take it off the market!
I later took the real estate agents classes to become a more informed consumer and learned about this fiduciary responsibility - makes sense that agents ultimately work for the person who is going to pay them! (and the higher the selling price, the higher the commission!)
I believe this was true in some places 20 years ago, was your experience recent? If so, where? There could be some isolated corner of the country where this is still true, but it definitely is by no means "most areas".
The seller, by the way, is NOT paying the buyer's agent. The seller is paying their agent, who is then choosing to pass on a portion of their commission to the buyer's agent.
In most areas the real estate agents fiduciary responsibility is to the seller (whether they are obtained by the buyer or not), because the seller is the one paying them.
Even if you obtain your own agent to run comps and submit an offer do not disclose your maximum price to them as they are legally obliged to reveal this to the sellers agent.
(I learned this the hard way on my first purchase, I said "I would pay the asking price, but lets put in an offer of X". The sellers response was either pay full ask or I'll take it off the market!
I later took the real estate agents classes to become a more informed consumer and learned about this fiduciary responsibility - makes sense that agents ultimately work for the person who is going to pay them! (and the higher the selling price, the higher the commission!)
Wow, that is so far off it's not even funny. If a buyer signs an agency agreement in SC, the buyer agent's fiduciary responsibility is solely to the buyer. If there is no agency agreement, the agent is the subagent of the seller in that scenario.
In most areas the real estate agents fiduciary responsibility is to the seller (whether they are obtained by the buyer or not), because the seller is the one paying them.
Even if you obtain your own agent to run comps and submit an offer do not disclose your maximum price to them as they are legally obliged to reveal this to the sellers agent.
(I learned this the hard way on my first purchase, I said "I would pay the asking price, but lets put in an offer of X". The sellers response was either pay full ask or I'll take it off the market!
I later took the real estate agents classes to become a more informed consumer and learned about this fiduciary responsibility - makes sense that agents ultimately work for the person who is going to pay them! (and the higher the selling price, the higher the commission!)
Add me to the list of dissenters to this misinformation.
I am trying to come up with an offer price. The house is located in a nice neighbor and in a nice location (cul-de-sec). However, it might have been overpriced at $500,000 currently and has been on the market for a close to a year. The seller left out of country about two months ago, so there appears to be a high motivation to sell.
I don't have a buyer's agent at this point.
First, Do I need to get an agent for this transaction?
Secondly, I was thinking I can go up to $450k, but for an initial offer I hate to make an offer with my price in mind. But, what is going to be a fair offer price?
Please help me with a good negotiation strategy here.
Your first "strategy" should be to find out the current market value of the home . NEVER base your offer price on listing price. You need to either do some major research yourself to figure out what comparable homes have sold for in the last 90 days, or hire a buyers agent.
I am trying to come up with an offer price. The house is located in a nice neighbor and in a nice location (cul-de-sec). However, it might have been overpriced at $500,000 currently and has been on the market for a close to a year. The seller left out of country about two months ago, so there appears to be a high motivation to sell.
Quote:
Originally Posted by jjhobak
I don't have a buyer's agent at this point. First, Do I need to get an agent for this transaction? Secondly, I was thinking I can go up to $450k, but for an initial offer I hate to make an offer with my price in mind. But, what is going to be a fair offer price? Please help me with a good negotiation strategy here.
Hobak - Your whole concept on making an offer is an invitation to disaster!
Don't let any 'expert' lure you into trusting THEIR judgement.
Get facts & opinions as best you can. Only when you are confident that you are well-informed, should you plan to make an offer.
In this market a professional appraisal only costs a few hundred dollars.
Also ask a couple of Realtors to give you a BPO or CMA on the property.
Go online to the County Property-Appraisers website and print out the property card (There's no guaranty, but, if it's on the Property Card, the improvements are 'probably" legal (i.e. Inspected & Permitted).
Interview a couple of prospective 'Brokers' - ask, "When you write an offer on a house like this, what are some of the contingencies that you would include?".
This way, you really don't need to KNOW anything! Just compare what each 'expert' tells you, and then go back to the most promising one, for clarification.
By-the-way - Do you have your financing lined up?
Hope this helps . . . . .
EZ-why waste money on an appraisal when there is no contract in place? You would have someone gamble a couple of hundred dollars on a house they may not even get under contract so easily?
The "experts" are the ones that will be in the best position to help a buyer. Why are you telling them not to listen to the advice they offer? What the buyer should really do is interview several agents and hire the best one. Also, if some buyer called me up and asked me for a BPO or CMA, I wouldn't do it without some commitment on their part first. I doubt any other true professional, top notch Realtor will either. Bad advice IMO right there.
Tax records are pretty useless for determining an offer price also.
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. NEVER base your offer price on listing price. You need to either do some major research yourself to figure out what comparable homes have sold for in the last 90 days, or hire a buyers agent.
Making an first offer . . . .
