As a buyer with a $1.5mm budget, which option would you go with? (flat fee)

[rando18]

Pretend you’re serious about buying a property in Florida (or wherever the market works similarly enough for this question to make sense) and your budget is $1.5mm. Would you:

Option 1. Not use a buyer’s agent at all, just shop around yourself & let the listing agent keep the full commission.

Option 2. Use a regular buyers’ agent, who will get paid out of the listing agent’s commission (typically 2.5% - 3.0% here in Florida) if he gets you to the closing table.

Option 3. Use a “flat-fee” agent who charges a flat $5,000 and credits you the commission he’s entitled you at closing (effectively saving you up to $40k on the purchase, but costing you $5k out of pocket even if you end up not buying).

[FL_Expert]

It depends how much expletive you have with real estate. If you know what you’re doing, I’d probably just work with the listing agent. If you let them take the full 6%, I think they’ll be more motivated to close the deal so you may be able to get a better deal than you would otherwise. Just my 0.02.

[rando18]

Originally Posted by FL_Expert

It depends how much expletive you have with real estate. If you know what you’re doing, I’d probably just work with the listing agent. If you let them take the full 6%, I think they’ll be more motivated to close the deal so you may be able to get a better deal than you would otherwise. Just my 0.02.

You wouldn't consider option #3? How come?

[City Guy997S]

Depends completely on the listing/listing agent. If it is a "market maker" type agent in a hot neighborhood then they would get the deal done. If its a soccer mom agent that is listing her friends property then likely not the way I'd go.

I looked at a listing a week ago, 6mm and the owner's 25 yr old kid was the listing agent. Place was overpriced and definitely under staged so it won't sell anytime soon with Jr doing nothing. Pressure clean the pool area/driveway, replace some dead looking plants and remove some ill placed furniture and maybe it would get some traction........and likely lower the price 1mm or more and the place will sell. It's a bad attempt at a flip, without doing any improvements and they are trying for a 2.5mm profit in about 20 months of ownership. So far its been listed over 6 months. No doubt the owner is pricing the property vs. what an actual agent thinks it is worth.

[ATL Golfer]

Option 3 is legal? I’m in Georgia and not sure that is kosher here. If so, listing agent will know your agent is giving you a deal and may not go well for negotiations. I’d go option 3.

I would go no agent when buying foreclosures. Definitely helped secure the property over similar offers when the listing agent knew they’d get full commission.

[beach43ofus]

If you have not bought a home in this area before, I'd use a highy experienced buyers agent specializing in the area.

I moved here from ATL (Suwanee), & I used a flat fee seller agent there, & it saved us $17k. They're not as prevalent here.

Down here, I had lived in FLA twice prior, so I knew how to deal with it, & went bare...no buyers agent.

If you are buying new, builders will often give special offers through a buyers agent that they won't give to buyers w/o agents...like lot discounts, X$ discount in the design center, & X$ off if paying cash. You may not get any of this if you go it alone.

Also, you need to know about:
-flood zones, & impact upon insurance cost
-how everything is zoned nearby (single family residential, vs other) buy an interior lot so you know what is on all sides.
-lot size, and utility easements to gain extra spacing, added cost if back to pond
-traffic patterns & rush hour conditions at entrance
-school rankings & future plans for new schools (even if not kids in school it impacts resale)
-HOA funding, new buyer fee, minutes, special assessments, bylaws, covenents, & how the HOA enforces them
-If golf community, does the community own the course, or not, & what if its losing $? Upcoming capital improvements?
-You dont want the rear of your home to face West. East is okay, but North & South are best...North is #1.
-You'll need to know about wind ratings/mitigation, like hurrcane windows, shutters
-You need to talk to insurance agent about hip vs gable roofs, how age of home impacts cost, prior to making offer
-pricing comps, & trends
-builder reputation, any lawsuits pending, or in the past?
-CDD fees, special taxing districts
-proximity to train tracks due to 32 trains/day passing through each day starting soon (used to be called Brightline)
-proximity to airports, & flight patterns
-proximity to fire station, hospital, & healthcare
-crime rates & trends, police reponse time
-car insurance rates by zip code
-proximity to wastewater processing plants, & wind direction
-how much do you know about pools, & pool decking? Drives up property tax, utilities, insurance.

At $1.5M, you probably wont bet at the custom home price point, so you'll be buying cookie cutter.

Good luck!

[Thor88]

I'm not sure where you're moving from, but in South Florida your chances of finding a buyer's agent that will work for less than 3% are almost none. Using the listing agent for your purchase puts you at a disadvantage with negotiations and getting concessions out of the buyer. You'll be laughed at if you propose option 3.

[VA Yankee]

#2 is the obvious best choice and their fee is paid by the seller so theirs no cost to you.

[MattSellsPBC]

I believe you need to find an agent that offers you "value" both in the sense of directing you to the correct locations; doing a proper CMA and understanding the market which is changing daily. If you don't have an agent that's offering you value or you believe you're best suited doing it yourself, then by all means try and save money where you can. If you're listing, it also depends on how turnkey ready your house is. If your house is done to the nines and looks like a Pottery Barn magazine, you're probably going to be fine with a limited service agent. If it's not, and getting top dollar is a priority (which it always should be) then hiring a trusted real estate professional will pay for itself.