Question for Real Estate Agents (or other knowledgeable persons)

[gh1950]

The only case where a buyer's agent might be paid by the buyer is in a super hot market with a for sale by owner. It has been awhile but some were not paying any commission. Also, I believe you need to have a contract with your agent otherwise they are working for the seller. As a side note - your agent increases his income with a larger selling price. Be sure you trust him to represent you.

Flat rate buyer's agents are not uncommon, especially for high end houses.

The people who can afford $1million houses don't have time to go around and nit pick the color of the back splashes in the kitchen.

Not much difference than using a fixed fee investment advisor, which is the smart thing to do.

 

[HKMurkure]

I am a mortgage guy. My office conducts quite a few purchase transactions a month. I would say, based on personal experience that sellers pay some portion of the closing cost around 65% of the time. Sometimes it is only $1,500 and others it is $10,000. Like others have said, it depends on how willing the seller is to work with you. Usually though, the more seller concessions you want, the higher they will make the sales price. The seller is worried about their NET price, either $200,000 sales price with no closing cost or $205,000 sales price with $5,000 closing cost. It is the same to them, so keep that in mind.

From this mortgage guys perspective, right now the Mortgage industry is going through a rough time like the rest of the country. Rates are still low, but not as low as they should be. Lenders are overwhelmed with volume and they are losing millions of dollars on margin calls and volatility in the market. Loans are taking up to 50% longer to close due to volume, people working from home, appraisers/home owners not wanting people in their home and court houses being closed. The lenders are still offering low rates but they are not paying the size of premiums we have been accustomed to. Usually, the lender would increase the rate which in turn would increase the income made on the loan. Whatever exceeded the lenders compensation, would be given to the buyer in the form of a Lender Credit. But, the lenders are just not paying enough credit to pay all your closing cost, like we could in the past. Lenders are expecting the market volatility to continue and they are expecting to be paid off within 24 months or sooner. Which means they will make relatively no money on loans after their initial cost, etc. So, why would they pay more for loans that are going to pay off soon and they lose money? They won't, which is the environment we are in right now.

Expect to pay closing cost. The seller may contribute to them and you might find a seller who will pay all of them. But expect to pay closing cost in order to negotiate a decent rate. Mortgage people make a fee, paid by the borrower/buyer either upfront (borrower paid/origination points), blended into the rate (usually discount points) or paid by the rate entirely (lender paid). If you receive seller paid closing cost, they are used towards all fees overall. This includes any lender fees (negotiable), Upfront Mortgage Insurance (FHA loan, if applicable), Closing attorney/Title Insurance fees (non-negotiable usually), Mtg tax (non-negotiable), recording fees by county/city (non-negotiable) and Escrow Prepaids (1 yr Home Owners Insurance upfront to establish insurance and then insurance/tax deposits collected by the lender to disburse on your behalf, etc).

Short story made long. Speak with a Mortgage Lender/Broker. Find out what the estimated closing cost are on the sales price you are interested in. Ask the mortgage person the difference in rates/payments based on different closing cost options. Find out what you can do and what you want to do. Go house shopping and ask for closing cost, but be prepared to negotiate. Have an experienced Real Estate Agent negotiate on your behalf and work closely with you. They are worth it and cost you nothing if the seller is also using an agent ( as long as conditions previously posted were met in the contract, etc).

Get yourself a Buyers Agent if it costs you nothing!!! Expect to pay closing cost of some form. Appraisal fees are required upfront, unless you are getting a VA loan and not usually covered in seller paid closing cost, etc.

 

[BH-ATL]

A couple of items to be aware of -

Title insurance -- the loan companies require it to protect them should there be a problem with the title. One would think that would be covered when they do the title search and it appears to be a good revenue stream for title companies. I have only heard of it being used once in 40 years ( not me ) when a person sold land to a developer and forged some of his family members' signatures.

PMI - Private mortgage insurance Required by the mortgage companies and is based on the amount of the loan and the amount of down payment. If you put 20% down it is not required. Once you reach 20% equity in the house ( not loan amount) you can get it removed.

 

[ImmortalOne]

I remember the time I needed to sell the house as soon as possible. It was hard for me because it was something like 4 months ago. Nobody wanted to buy real estate. I was desperate and I used the service of The Property Buying Company. Of course, he took some money for his service, but he had actually helped me. I think this is the only reason to use service of real estate agents, realtors, etc. When you need to sell your property as fast as possible.

 

[roscoe1911]

The seller pays closing cost and they include it in the price.

 

[Wolf six]

I am considering purchasing a home without a real estate agent. I know that ideally I would hire an agent but I am a recent college grad and have limited funds. The seller's agent is would have us believe that in today's market it is customary for the buyer to pay closing costs. When we've bought and sold in the past, the seller covered closing costs and I want to make sure that my experience is in line with the norm in Georgia. In your experience, what percentage of the time do the buyers cover closing costs? I am happy to do what's fair, but don't want to be taken advantage of. In your opinion, which closing costs does the seller usually cover in Georgia.

Why would you try and buy a house when you are worried about a pittance? Do you even have money to put down for the loan?

 

[GAGunguy]

No way should anyone purchase real estate without a good real estate agent, knowledgeable about the local market, representing their interests IMO.

The sellers agent represents the SELLER!. Hire an agent to represent you or you will pay too much.

 

[mustang12]

I remember the time I needed to sell the house as soon as possible. It was hard for me because it was something like 4 months ago. Nobody wanted to buy real estate. I was desperate and I used the service of the realtor. Of course, he took some money for his service, but he had actually helped me. I think this is the only reason to use service of real estate agents, realtors, etc. When you need to sell your property as fast as possible.

Or when you want to maximize the amount of money you get for your house/property without leaving too much on the table. The agent is able to bring his network of brokers and buyers to open up marketing efforts and draw a bigger audience. This of course, assuming you are using a seasoned agent

 

[Jon.]

Im in the process of buying my first home, I got super lucky knowing a good friend who is an agent. I told him exactly what I wanted, what I wanted to pay, and I got it. Im in 160k house for no money down, only paying a few grand out of pocket on closing (Doing this to help the sellers). My loan agent has called me at every point in the process where something is needed, walked me through every step, and made sure I felt comfortable in the whole process.

If you would like his info feel free to pm me, I will gladly forward you his info.

 

[ucgz]

Why would you try and buy a house when you are worried about a pittance? Do you even have money to put down for the loan?[/QUOTE

Interesting question.