I never thought I’d refer twice to the same string in an online real estate forum, but a reader of this message board at online brokerage firm Redfin.com raises an interesting issue for home buyers in some increasingly competitive markets.
Listing agents are the Realtors that represent the sellers of the home. They split the commission, paid by the seller, with the agent representing the buyer. In some markets where banks are dumping foreclosed properties the competition has gotten so fierce there are often multiple offers over the asking price. The listing agent is supposed to present the offers to his client but are they more apt to push an offer when there is no buyer’s agent and they get to keep both sides of the commission?
That’s the argument made by one reader named Janer on the Redfin message board.
“To Everyone out there just want to share with you the “Secret” since I can so relate to your frustration with being outbid on properties and properties going pending before you even have a chance to write an offer and I am speaking from experience - DROP YOUR AGENT and when you see/find a property you like find out who the listing agent is (you can go to www.realtor.com and type in the MLS# ; towards the bottom of the page it will tell you who the selling agent is and usually have a telephone number to contact. We had been looking for several months and being told by our buyer agent that we were being outbid like most of you or according to the listing agents they were already pending with only one or two days on market. The only offer we made and that was accepted which I wrote about in an earlier thread was when we bid way high over list price per our last agents advice to “get” the property and according to our agent the Bank would lower $$ to near the appraisal if it came in lower - WRONG! Bank wouldn’t lower and we had to walk since there was such a huge gap between appraised value and our offer. We had to eat $275 for inspection and $450 for appraisal. Oh sorry, still haven’t gotten over that yet… Anyways, we decided to drop our last buyer agent (mind you this was our third) and try this new strategy; we found a property we loved and contacted the listing agent all I got was his voice-mail so I left a message that we were interested in his listing and were also looking for a buyer’s agent since we didn’t have one. I got a call back I swear within an hour to show the property, we saw it, loved it and he wrote up our offer same day and per his advice asked for 3% closing costs paid by seller. Our offer was accepted today; day after we wrote offer at list price which comps show property is right at. Coincidence this could all happen so fast not to mention even getting an offer in considering we have been trying for months?? I think not. I will let everyone know how the process comes along but as of now my mantra is: If these listing agents want to play games to get their double commissions I say “let the games begin”.
What do you think of this strategy?
BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.