Buying Real Estate, and Other Housing Thoughts

Started by hoodle
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hoodle

hoodle

UC-Davis DVM/PhD
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I know we've been talking about this in other threads, but I thought we might all centralize our discussion!

Like many others, I'm interested in buying a house or condo. Some of us will be doing this with their familys (yay, wi girl!) and others with their significant other (yours truly) and others by themselves, renting out rooms for roommates etc. I want to buy a place because I'll be there for almost 8 years, and it seems silly to pay rent when I could be paying a mortgage instead with all the benefits of home ownership. As well, the current economy seems like a buyers market... but I don't know anything about economics, really! 😱

So here's my question: how does one go about researching the real estate market in your prospective area? I don't mean specific housing options, but the general state of the real estate economy in a specific city/state. I don't want to be assuming "its a buyer's market" simply because I've heard smart people make that generalization, only to find out the hard way that the generalization doesn't apply in my case! Any ideas about how to make this all more concrete? What sort of numbers should I be finding? What sort of databases or resources are there? I'm smart... I should be able to figure this out... but while I find science exciting and intuitive and fun, I find money simply mindboggling! 🙄 help! :hardy::hardy:
 
Typed "housing market trends" into google, and got this lovely little page. I don't know how helpful for other states it will be, but looked okay for WI.

http://www.househuntnews.com/MCR/

I love that I'm just relying on my mom to help me, as she's bought houses before. kuddos to those who are doing it on your own -- i don't know if I could do that! I fall in love with a place, and then find a way to make it work -- to the detriment of my food consumption sometimes (last year's apt).

UPDATE: clicked on a few more of the links on the google page of results, and didn't really understand much of what was going on ... oh man, this would be difficult. maybe try a specific by city/state search?
 
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You’re right..."buyers’market" doesn’t apply to all markets! Over the summer, our home in DC sold in 4 days, and we had multiple offers that bid the price up from our asking price. So, that wasn’t exactly a buyers’ market even though it "should" have been, if you paid attention to general reports.

You can probably poke around internet websites to find data, etc, but my experience with real estate is you never really know what’s happening in a place until you live there for a little while and start to really understand the place as a resident. I don’t know if your plans include renting a place for several months to a year until you find the best match for your short- and long-term needs (including resale value), but you might consider doing that.

And your realtor can be a great resource. Once you find one you trust (some of your profs might be a good resource for a referral), they can look at data in the multiple listings and tell you what kinds of places have sold over the past X months or the past year, and what the difference was between the listing and selling prices. That will give you an idea of what’s been happening in your area of interest, once you find it, so you’ll know what you can expect.

Good luck!
 
I agree with runnerDC I've moved many times and lived in all sorts of areas. My plan for vet school is to move to the town forts and live in the standard crummy apartment for at least 6 months. Then once I know my way around, know what nieghborhoods are decent, and know how close I want to be to the school, I can think about buying or renting something on a more permemnent basis. Especially since in my case that might involve finding classmates that I wouldn't mind having as long term roommates.
 
hoodle said:
I know we've been talking about this in other threads, but I thought we might all centralize our discussion!

Like many others, I'm interested in buying a house or condo. Some of us will be doing this with their familys (yay, wi girl!) and others with their significant other (yours truly) and others by themselves, renting out rooms for roommates etc. I want to buy a place because I'll be there for almost 8 years, and it seems silly to pay rent when I could be paying a mortgage instead with all the benefits of home ownership. As well, the current economy seems like a buyers market... but I don't know anything about economics, really! 😱

So here's my question: how does one go about researching the real estate market in your prospective area? I don't mean specific housing options, but the general state of the real estate economy in a specific city/state. I don't want to be assuming "its a buyer's market" simply because I've heard smart people make that generalization, only to find out the hard way that the generalization doesn't apply in my case! Any ideas about how to make this all more concrete? What sort of numbers should I be finding? What sort of databases or resources are there? I'm smart... I should be able to figure this out... but while I find science exciting and intuitive and fun, I find money simply mindboggling! 🙄 help! :hardy::hardy:
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My personal experience:

My husband and I poked around at realtor.com and browsed some listings over the course of a few days. We were both very busy with work and life. We spotted a house we really liked, and I called the agent listed.

I wasn't expecting to 'snag' a real estate agent on the spot, but as fate would have it, not only was that particular house already under contract, but the agent on the other end of the phone sounded really nice.

Ignoring all the rules in the book about interviewing a potential agent (asking about their experience, if they do it full time vs. part time, and some other stuff) - there was something about this guy that just seemed right.

He turned out to be a great agent. Naive and a bit inexperienced perhaps, but honest, and very hard-working. After our brief trip out here to house-look, he continued the hunt for us, doing walk-thru's with me on the phone, emailing us and posting dozens of pics, etc.

So.. yeah.. to wrap up this long story? Try calling a local real estate office in the town, and talk to someone. If they're not your speed, call another office.

A good realtor can be an invaluable resource.. especially if you are not physically "there" and you don't have tons of hours to do a lot of research on your own. Yes, do your homework too, but consider a realtor. Or at least make a call or two and talk to one.

Way past my bedtime now...!
 
I'm so glad you started this thread! We currently (my hubby and I) have a house about 3 mins drive from the University I attend and will be selling it (hopefully it will sell quickly) and will buy a house wherever I go for vet school. I've found it very hard to search for real estate online but I'll have to look through the stuff you guys posted.
 
Also, if you are looking for actual properties, google has a nice real estate search function that lets you pick a city, or zip code, no. of brs, type of property and all that. i've been using it for madison in addition to other sites and it seems to be working fairly well.

edit: although, it is somewhat limited, and you might want to start there for pricing and then expand your search. i googled "condos in madison, wi" which worked well (just fill in your info)
 
I had been blowing off this thread like "psssh... I have $80k in undergrad loans to pay off, then vet school, and I'm not in a relationship so I don't care about moving with anyone" and then my mom calls me up and goes "so we're thinking of driving up to Ithaca to buy a house for you and then you can get roommates and that will be that." Well, thanks mom, but now I need to find roommates!

For those who have done this/know of someone who has (I know most who are looking into it want to move in with their family - psh, like that's important) - how did you find people to live with you?
 
banditalfi said:
For those who have done this/know of someone who has (I know most who are looking into it want to move in with their family - psh, like that's important) - how did you find people to live with you?
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I own my condo and have been renting to roommates for the past several years. Craigslist is what I've used, by and large. Also emailing friends, college mailing lists, etc. to see if anyone I know might be in the area looking for housing. At the university you're headed to, there should be additional ways to put the word out to students. Also, make sure you do a lease. Didn't do one with my first roommate (who I knew) and it bit me in the butt.
 
I would also suggest zillow.com as a resource in looking at very local price trends, and as a guide in making any offers. Iggyshouse.com is another good site.

People should be careful though - next year will almost certainly be a better year to buy than this year, and it's quite possible that if you only intend to live in a place for 4 years, you might end up on the short end of the stick when you go to sell then. The old rule of thumb is that buying a property becomes a "deal" relative to renting (all factors considered - closing costs, maintenance, annual taxes, RE commission when you sell, utilities, mortgage interest tax deduction, etc, etc) if you're able to stay there for 5 years. That's in a normal market, with ~3% annual price appreciation. In a declining market like we're in now, the equation changes to be more in favor of renting. Your mileage may vary.
 
We're going to buy because we already own. Houses in my subdivision are actually moving quickly, and we cannot rent the type of property we want (ie. not college style yucky) with a fenced yard for the dogs at school. Besides, we cant afford to keep our current house unoccupied and rent somewhere else, and Im afraid we will get some aweful renters. It looks like we will be buying a place for about $75-100k less than our current house too! Gotta love the semi-rural communities of many of the midwest vet schools! I know that it may be difficult to move the property down at school, but it will be a lot more difficult to move the urban townhome if renters trash it.​
 
I'm bringing this one back...

I've been looking to buy a three bedroom house in Ithaca and rent out the extra rooms. So I've been searching around, looking at homes, etc etc etc and it is just a giant pain n the butt. So this is more of a venting post, but if anyone knows a nice home in Ithaca for less than $150k and wants to give me the info let me know!
 
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akitavet said:
It looks like we will be buying a place for about $75-100k less than our current house too! Gotta love the semi-rural communities of many of the midwest vet schools! I know that it may be difficult to move the property down at school, but it will be a lot more difficult to move the urban townhome if renters trash it.
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Yeah, that is a positive thing about the midwest! We got a nice 1500 sq foot 3 bedroom 1.5 bath with about a 3rd of an acre backyard (still unfenced) that backs to the subdivision lake in a nice little neighborhood where the houses are still of reasonable age (most built before mid 1980s) for 117K. 😀 I just worry about buying our next house as I'm sure the mortgage will go up appreciably!
 
I'm going to get a trailer (errr, 'mobile home')

Anyone else?

Getting a house here that doesn't suck will give me a mortgage payment more than the local apt costs (with the downpayment I can handle, and I don't want two legged roomies). So a trailer will work better for me.

It's pretty common, I know several vet students out here have trailers. Pullman is a college town, right next to Moscow ID another college town.

How bout for other schools? Any other mobile home seekers?
 
It happens here too. Haha. Tell someone that you're getting a trailer in Oklahoma and they'll go, "OMG TORNADOS!!!" or something like that. Unless they're actually from around here, and know the odds are... slim? Pretty much. It's not something I worry about too much, at least. Not that I live in a trailer, but still - it's just something that some people overreact to, you know?

I think a trailer would be an ideal 4 year investment if it's an option available to you. especially with no roomies, since thin walls would be a main concern in that case.
 
one caveat...you should be careful because trailers tend to depreciate in value regardless of how the housing market's doing....most people count on their brick and mortar homes to go up a bit...so you should factor in the money you'll lose buying a trailer vs renting before you sign anything....
 
I have to agree with the last post, trailers are convenient, but will not resell nearly as well. However, if the only other option is to rent, the trailer is fine I would think. And hey, you can always get it hauled to wherever you go for residency and have a house there too! :laugh:

Are you going to buy some land or live in a trailer park? If you can afford the land, you can have less Cops style entertainment on Saturday night, and the land will appreciate, even if the trailer does not.
 
Speaking of real estate, I am putting in an offer on a house today in Christiansburg (10 min from Va Tech campus). It has a pool, which I don't need, but how awesome is that! I love buying in the country, you can't buy a chicken shack in my town for what I am going to pay for this house.
 
fargeese said:
Speaking of real estate, I am putting in an offer on a house today in Christiansburg (10 min from Va Tech campus). It has a pool, which I don't need, but how awesome is that! I love buying in the country, you can't buy a chicken shack in my town for what I am going to pay for this house.
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Man I am SO jealous - Ithaca prices are through the roof... aaaaaaah.
 
Same with davis. Good god. I don't even want to say it because it makes it true... but... there are no condos available for under $250,000. No houses for less than $450,000 (and most "ready-to-move-in" are more around $500,000, which if you're bad at math is HALF A MILLION DOLLLARS!!!) I guess the market is really steady, in that a house is highly unlikely to loose value. That said, its a ****load of money. You can live in woodland, dixon, or winters if you want to drive in but spend a whole lot less money. I'm not sure how I feel about that. I sort of think if we can swing the down payment with massive parental help, the large investment to actually live in Davis will pay itself off both in terms of fantastic quality of life and great resale value, 8 years from now. argh, though.
 
hoodle said:
Same with davis. Good god. I don't even want to say it because it makes it true... but... there are no condos available for under $250,000. No houses for less than $450,000 (and most "ready-to-move-in" are more around $500,000, which if you're bad at math is HALF A MILLION DOLLLARS!!!) I guess the market is really steady, in that a house is highly unlikely to loose value. That said, its a ****load of money. You can live in woodland, dixon, or winters if you want to drive in but spend a whole lot less money. I'm not sure how I feel about that. I sort of think if we can swing the down payment with massive parental help, the large investment to actually live in Davis will pay itself off both in terms of fantastic quality of life and great resale value, 8 years from now. argh, though.
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yep! i have a whole spreadsheet and i'm looking at $150k max, but hopefully more like $130k... there are a few condos but in order for this to really be worthwhile i would need a three bedroom and be able to rent out the other rooms... and then there's the whole consideration that i would prefer a yard and non carpeted floors because i don't want dog hair imbeded in carpet (not that i have a dog, but i'm trying to be realistic).
 
If you only plan on being in an area for four years, try and calculate closing costs and selling costs. Sometimes, you would be better off renting for four years instead, especially if you want to make improvememnts to the house/condo during the time you own it and you don't know for sure what will raise the value and what won't. Oh, and invest in a Roth IRA. (Any guesses what class I'm watching lectures from?)
 
twelvetigers said:
If you only plan on being in an area for four years, try and calculate closing costs and selling costs. Sometimes, you would be better off renting for four years instead, especially if you want to make improvememnts to the house/condo during the time you own it and you don't know for sure what will raise the value and what won't. Oh, and invest in a Roth IRA. (Any guesses what class I'm watching lectures from?)
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I was actually wondering about this. Is anyone worried about the fact that the housing market is terrible in many places, with people losing money on homes and the homes sitting on the market for years? At least this happens in quite a few towns in Wisconsin. Or isn't this an issue in most of the places people are buying homes in? Do you guys ever worry about not being able to sell when you're ready to move in four years (and hence be stuck paying the mortgage on a house while renting/buying somewhere else?)

I was just wondering if these are in fact national issues, or if there are just local pockets of terrible housing market?
 
In general, the housing market is poor nationally with some exceptions. The exceptions, unfortunately or fortunately for us, include small towns that cater to the college/graduate school crowd, because we always are going to need to move there. The bad part is that we are not going to get the deals you could get elsewhere because of a tanked market, but the good part is that we should have no issue selling once we finish school.

There is no way to know if we are going to make money, but generally, even in a crap market, you'll at least get the money out that you put into it over 4 years. So it is still better than renting. If the house doesn't sell right away after school, and you want to buy something else, you can get a bridge loan, which is a loan to cover the mortgage on the old house until it sells. Since you've bought right next to a school as well, you can always rent the house or condo for a year after school, and if you stuff enough undergrads in there it will pay for the mortgage 🙂
 
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fargeese said:
In general, the housing market is poor nationally with some exceptions. The exceptions, unfortunately or fortunately for us, include small towns that cater to the college/graduate school crowd, because we always are going to need to move there. The bad part is that we are not going to get the deals you could get elsewhere because of a tanked market, but the good part is that we should have no issue selling once we finish school.

There is no way to know if we are going to make money, but generally, even in a crap market, you'll at least get the money out that you put into it over 4 years. So it is still better than renting. If the house doesn't sell right away after school, and you want to buy something else, you can get a bridge loan, which is a loan to cover the mortgage on the old house until it sells. Since you've bought right next to a school as well, you can always rent the house or condo for a year after school, and if you stuff enough undergrads in there it will pay for the mortgage 🙂
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Thanks for the info.
 
I'll be there for 7-8 years, so I think we'll be there long-term enough to weather the housing problems. I hope.
 
In your case Hoodle, if you could swing the down payment, I would definitely buy, though the idea of spending half a mil makes me want to puke too. Generally 5 years is considered the timeline for definite break even. Here at least, you can generally add 5% value each year you live in the house, a little less if it's a crap market, but after 8 years I would assume the market will have recovered. So your 500,000 condo would be worth 700,000 in 8 years, at which point you could sell and have 200K to buy into a practice or re-mortgage it, take the 200K out and keep it as a rental property. You should check with your local realtor to see what properties have been appreciating in your area.

Another reason I thought of as to why houses have been sitting, is that people are listing the price based on the assessment, which in most cases was before the housing market went bad. Nobody wants to sell for what they paid or what they perceive it is worth, even though that value is now much less than what it was a year ago.

I'll tell you though, I have never regretted buying and have made money both times, even though I was in each of the houses 2 years or less.
 
Thanks for saying this! The real estate industry has gotten very good in the last 5-6 years of making it seem like you are saving money when you will really be spending more. Here's a good discussion of the costs (and how to price a house).

Rent Versus Own (Irvine Housing Blog)

Real-estate is not a very good investment right now. You really should only do it if you know it will be cheaper in the short run, because you are almost guaranteed to sell your place when you move. In many places like Athens, GA, they are really over-building, so if you buy a house now, it might be harder to sell at the same price after four years.

My parents offered this route to me, to put down the down payment, and I said, honestly, while I like the control, I don't want the headache. So I'm going for attractively-priced housing within biking distance of the school where all the utilities are included.

If you own your first home while you're in vet school, are you prepared to get the HVAC fixed? Handle the insurance thing if there's a flood or a fire? Mow your own lawn? There are so many variables. I just want to concentrate on school!
 
fargeese said:
Generally 5 years is considered the timeline for definite break even. Here at least, you can generally add 5% value each year you live in the house, a little less if it's a crap market, but after 8 years I would assume the market will have recovered. So your 500,000 condo would be worth 700,000 in 8 years, at which point you could sell and have 200K to buy into a practice or re-mortgage it, take the 200K out and keep it as a rental property. You should check with your local realtor to see what properties have been appreciating in your area.
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Fargeese, I'm not so sure about this. I've been in my place for nearly 4 years now and I think we'll be lucky if we get out at a break even level (we did some improvements to the house, but nothing really major). I think it's possible, but we'll see.

The 5% value each year just seems a little aggressive to me. Especially when you factor in things like closing costs (these days, with gov't loans requiring only a 3% downpayment, closing costs in my area are between $10K and $13K for a condo, according to my realtor), realtor's fees (5.5-6% of selling cost), and any necessary fixes/improvements. I know I won't be seeing 5% gain for each year I've had my place. Also, I think an appreciation of 40% in 8 years (I think that's what $200K on a home you'd buy for $500K) is huge. I have a hard time believing that.

I know the housing market varies from area to area, but I don't think it's nearly the sure thing that it sounds like from your post.

Also, for people seeking advice, I'd look into local markets more, not just assume that areas that are college towns will remain insulated from housing market issues. I probably make a similar mistake a few years ago thinking that DC was relatively immune to the housing slump, and I'm not sure that was the smartest thing. Do your own research for the area you're looking at. Look at all the information, not just the positive stuff.
 
You are right, you do need to look at the specific area in question to see how prices have been increasing or decreasing in the last few years. I agree the 5% is a bit aggressive if the housing market continues to slump, but I really think it depends on location. I made about 5% each year of my last house, and considerably more than than on my first house. I don't remember my closing costs being quite so high though.

I agree that college towns might not be insular, but based on what I've seen, they do seem to be weathering the crisis better than other markets. I looked at condos, for example, right in Blacksburg, and they are still selling for full price and within 1-2 weeks of offering.

I guess I just don't want people to be totally scared off buying when it can be very rewarding. Just like any huge financial decision, everyone should consult a local realtor and their bank before choosing to buy. I guess I just hope people will at least look at the option before renting for years and having nothing to show for it.

P.S. yes the repairs are an issue, but I have never had any major problems because I got the home inspection beforehand, and you can get a home warranty for a few hundred dollars if you choose, which would cover any major unforeseen disasters.
 
fargeese said:
You are right, you do need to look at the specific area in question to see how prices have been increasing or decreasing in the last few years. I agree the 5% is a bit aggressive if the housing market continues to slump, but I really think it depends on location. I made about 5% each year of my last house, and considerably more than than on my first house. I don't remember my closing costs being quite so high though.

I agree that college towns might not be insular, but based on what I've seen, they do seem to be weathering the crisis better than other markets. I looked at condos, for example, right in Blacksburg, and they are still selling for full price and within 1-2 weeks of offering.

I guess I just don't want people to be totally scared off buying when it can be very rewarding. Just like any huge financial decision, everyone should consult a local realtor and their bank before choosing to buy. I guess I just hope people will at least look at the option before renting for years and having nothing to show for it.

P.S. yes the repairs are an issue, but I have never had any major problems because I got the home inspection beforehand, and you can get a home warranty for a few hundred dollars if you choose, which would cover any major unforeseen disasters.
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I just signed a contract for a condo in Blacksburg. The condo was only on the market for a couple of weeks, and I was lucky enough that it was previously owned by a vet. student, so she let me match another offer. I am buying it for more than its appraisal price (a couple of thousands, not in 10's of thousands). And the realtor only charged the seller 2.5% (she told me 3% is "standard"). It definitely did NOT depreciate over time, and the seller made $34,000 more than what she bought it for 4 years ago. Several condos were for sale in that particular region, and all sold within a couple of weeks, maybe a month at most. I'd say, it's a pretty good investment.
 
VAgirl said:
I've been in my place for nearly 4 years now and I think we'll be lucky if we get out at a break even level (we did some improvements to the house, but nothing really major). I think it's possible, but we'll see.

Also, I think an appreciation of 40% in 8 years (I think that's what $200K on a home you'd buy for $500K) is huge. I have a hard time believing that.

I know the housing market varies from area to area, but I don't think it's nearly the sure thing that it sounds like from your post.

Do your own research for the area you're looking at. Look at all the information, not just the positive stuff.
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I'll add my 2 cents as someone who is married to a real estate broker, definitely not an expert, but familiar nonetheless.

Unfortunately, VAGirl, you probably bought at the top of the market and now 4 years later are trying to sell during a housing slump. Now, is a good time to buy not sell, but it can be done so I hope you do well.

Actually, an appreciation of 40% in 8 years seems a little low to me. It is a general guideline that home prices double about every 10 years. This has been true over the past century - even taking the great depression into account!

Housing as an investment is generally a safe investment - but it does carry risk like any investment. I think people got a little too confident during the housing boom and forgot that there is risk involved, especially in shorter-term home ownership.

Finally, I definitely agree with VAGirl to do your research on the specific market you are interested in. Not every college town is the same. There are some that are going to be a pretty safe bet and others where you will have to be more cautious. A good real estate agent is an expert on the real estate market in a specific town/area and can be a huge help when relocating to a new area. Key words - good agent, there are a lot of agents out there so be sure to find one who is knowledgable and you feel comfortable with.
 
Rebeki said:
Unfortunately, VAGirl, you probably bought at the top of the market and now 4 years later are trying to sell during a housing slump.
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So true. I knew there was something about buying and selling relative to low and high. I just got them backwards.😉 *sigh*

Ok, I'll stop posting negative things. You guys enjoy your buyers market, you lucky things. 🙂
 
I have to admit, knowing that Rebeki is moving into the same condo building as I am, and that she thought it was a good investment, is taking some of the worry the other posts brought up!!

To be honest, it seems like people move every year in madison, and I didn't want to deal with that anymore. Answer was to buy.

Now I get to paint it pretty colors! Yay! 😀 Because, obviously, that's all that matters ...
 
projekt - you have SO MANY good points, but after number crunching it looks like i would save >$200/month if i buy, which over the course of four years is about $10k and hoping the market bounces back a little it should be fine... well, at least that's the thinking
 
Don't mean to hijack the thread, but how many of those who are buying real estate are planning on renting out a couple of rooms? Are there any people who are buying, but living by themselves? I am in the process of buying a condo, but I was hoping to be able to bypass the whole roommate situation. Is that common/possible?
 
I am buying and hoping to rent a room to an older friend. If not, I will scope out other people and consider renting to them. I can afford to buy without doing this, but it would really lighten the load.
 
Random question....does anyone know how the realtor's commission works? Specifically, does the seller agree to give 6% (or whatever is agreed upon) to the seller's agent/company, who will then pass 3% (or whatever) along to the buyer's agent? Or does the seller agree to give 3% to the seller's agent and 3% to the buyer's agent?

As in, if you're selling your house with a seller's agent but sell to someone without a buyer's agent, do you owe 6% to the seller's agent anyway? Or is it just 3%? I know there are some people with ties to realtors out there, so I wanted to see if I could tap into your advice out there.

I need an answer ASAP, if possible!!

Thanks!
 
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as the seller, you're going to pay the 6% commission (some places it's 5%, but if you're in the DC metro area, you can probably expect 6%), so that'll come out of your funds during the transaction. then, yes, it would be split 50-50 between your agent and the buyer-broker.
who is representing your buyers, though? i always thought there had to be realtor parties on both sides; don't know how it would work otherwise. that be a great question for your realtor; when you signed with them, there may have been a clause in your agreement as to how commission is handled.


VAgirl said:
Random question....does anyone know how the realtor's commission works? Specifically, does the seller agree to give 6% (or whatever is agreed upon) to the seller's agent/company, who will then pass 3% (or whatever) along to the buyer's agent? Or does the seller agree to give 3% to the seller's agent and 3% to the buyer's agent?

As in, if you're selling your house with a seller's agent but sell to someone without a buyer's agent, do you owe 6% to the seller's agent anyway? Or is it just 3%? I know there are some people with ties to realtors out there, so I wanted to see if I could tap into your advice out there.

I need an answer ASAP, if possible!!

Thanks!
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runnerDC said:
as the seller, you're going to pay the 6% commission (some places it's 5%, but if you're in the DC metro area, you can probably expect 6%), so that'll come out of your funds during the transaction. then, yes, it would be split 50-50 between your agent and the buyer-broker.
who is representing your buyers, though? i always thought there had to be realtor parties on both sides; don't know how it would work otherwise. that be a great question for your realtor; when you signed with them, there may have been a clause in your agreement as to how commission is handled.
Click to expand...


I know seller pays both agents. I am asking what happens when I have a sellers agent and no buyers agent. Do I still have to pay a seller's agent 6%.
 
I believe you do still have to pay the same amount (not positive on that though). I was under the impression that the division was 3% to seller's company, and then 1.5% to each of the realtors.

As for buyer's not having a realtor, I didn't get one when I got my condo (a terrible idea). I thought it would give me negotiating room with the price (it didn't).
 
VAgirl said:
I know seller pays both agents. I am asking what happens when I have a sellers agent and no buyers agent. Do I still have to pay a seller's agent 6%.
Click to expand...

Yes, you do, unless you have negotiated a different amount in the event your agent handles both sides. Whatever is in the contract your signed when you listed is what your are legally obligated to pay out at closing. 6% is "standard" but it is illegal to set a mandatory commission. Of course, you will be unlikely to get anyone to list for less than 5%, and many won't. It is very expensive to market a house. The seller's broker still has to pay 3% to the selling broker, and offering a lower amount will not inspire many buyer's agents to show the house. That's just how it works.

As a former realtor, I think it is a terrible idea for a buyer to use the selling agent. The selling agent works for the seller and does NOT represent the buyer's interest. As such, that agent can disclose much more information to the seller, whereas if you have your own agent, that information is confidential.

In case I wasn't clear, a buyer should not use the seller's agent. That's like using your soon to be ex-spouse's divorce attorney.
 
I agree with critterfixer - get a buyers agent and sign a buyers agreement with them. It costs you nothing, and you get an agent that is working in your best interest and can give you a lot of information that the sellers agent legally cannot. For instance, a buyers broker can give you information about what other houses have sold for recently and can advise you what the home is actually worth.

Many people think that they will do better if they "go direct" but unless they are a very savvy home buyer that is almost never the case.
 
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