Why Hire a Realtor

For the same reasons you use and acquire the services of any professional - to help you find, process  and finish what is a big investment on your part.  The commission that a knowledgeable professional earns is minimal relative to your investment.  The process must be smooth and enjoyable throughout.

 There is a myth that real estate agents earn a "standard 6% commission" when they sell a home.  There is no such thing as a "standard commission" - commissions vary from property to property.  Any commission is usually split 4 ways.  One half of that commission goes to the listing company.  The listing company then splits this part of the commission with their listing agent.  The other half of the commission goes to the company of the selling agent (the agent who is working with the buyer).  The company then splits this half of the commission with the selling agent.

Referral business is critical to a real estate agent.  If you are pleased with the manner in which your real estate business is handled, please refer any potential buyers or sellers to your agent.

The truth about Real Estate Agents

1 An Agent's company does not provide expense accounts, car allowances, advertising budgets or any other sort of financial remuneration.  Real estate agents are on straight commission.  So please remember, when an agent takes you out to show you homes; it is their gas, their vehicle and most importantly - their time and expertise from which you are benefiting.  Please reward their investment in you by being loyal when it comes time to purchase your home.

2 An agent can assist you in a purchase of virtually any home - resale or new, another company's listing or For-Sale-By-Owner.

3 If you walk into an open house or new home model unaccompanied by your agent, please inform the salesperson that you are working with an agent.  Better yet, have a supply of your agent's cards handy so that you can present them to the on-site agent.  This protects your agent and also facilitates clear communication.

4 There is a myth that real estate agents earn a "standard 6% commission" when they sell a home.  There is no such thing as a "standard commission" - commissions vary from property to property.  Any commission is usually split 4 ways.  One half of that commission goes to the listing company.  The listing company then splits this part of the commission with their listing agent.  The other half of the commission goes to the company of the selling agent (the agent who is working with the buyer).  The company then splits this half of the commission with the selling agent.

5 Referral business is critical to a real estate agent.  If you are pleased with the manner in which your real estate business is handled, please refer any potential buyers or sellers to your agent.

A Buyer's Perspective on FSBO's:

"We just sold our house--it's in escrow right now--and we were planning to get some sort of temporary housing while we shopped for something else. I was driving down the road a couple of days ago and saw a sign for a house for sale by owner. We went to look at it the next day and WOW! Beautiful condition, just the kind of neighborhood we want, right size, right amenities and grossly underpriced--like, by about $30k-$50k. They're asking $199k and it should be something like $230-$250k.

The catch . . . the owners are really unsophisticated--and they have a "family friend" who is advising them on the transaction. Turns out this "family friend" is an 87 year old retired real estate broker living in a retirement home 300 miles away. Who doesn't exactly have his finger on the pulse of current real estate laws and practices. Who is negotiating on their behalf. Who is being extremely unreasonable about negotiations. Who wants $5k earnest money down on a $199k house, to be forfeited if escrow doesn't close within 30 days. Who refuses to give me a written counter-offer. Who will not allow his "friends" to sign a contract unless there is already $5k in escrow. Who will not accept a loan committment letter. Who will not accept anything from a loan broker, because "when I was in the business, there weren't any such things as loan brokers. The real estate broker was the loan broker, and I don't like the way they do things now." Who insists that you can open an escrow without a written contract, and if my escrow company won't do it, he'll find one who will. Who doesn't quite believe me when I tell him that you have to have a written contract to sell real estate in CA (and this isn't exactly a new law.) Who hasn't a clue about current California laws about mandatory disclosures. Who didn't advise his "friends" to get a preliminary pest report. (Clear pest report is de rigeur in CA real estate transactions.)

My only consolation--he is being sooooo unreasonable that no one in their right mind will deal with him. The only way this place will sell is if a fool with $200k in cash wants to buy it--which I seriously doubt. Anyone who needs to finance it is going to run into the same problems I'm having. I'm getting my financing lined up. Fortunately I can afford to pay two mortgage payments if this overlaps the close of escrow on our place. I'm going to deal with the sellers directly on inspections and etc, and then tell them that I'm lined up and ready to do the deal, except their buddy is standing in the way. I may even offer to pay $1,000 to $1,500 to have a real estate agent oversee the transaction and disclosures. My loan lady seems to think that we can get 100% financing approved for this place and get a pre-approval by tomorrow afternoon. That should get me some leverage with the sellers. I hope. I'd hate to lose this place, since my husband has fallen in looooooove with it.

Tell you what, though--if I can make this work, I will have EARNED the difference between the FMV and the actual sales price . . . . "

- Diane

*Moral of the Story, call Joseph for all of your Real Estate needs!