I need some real estate advice...

Discussion in 'After Hours Lounge (Off Topic)' started by Blake G, Feb 23, 2004.

  1. Blake G

    Blake G Agent

    Joined:
    Aug 22, 2001
    Messages:
    26
    Likes Received:
    0
    Hey there, I am looking for advice from the collective on a real estate question that I just cannot find an answer for.

    Here is the situation -- My wife and I found a house that we liked -- it needs a lot of work, but c'est la vie. We are prepared to offer $505,000, which is under the asking price, but in line with what the repairs are going to cost. We do not have a realtor currently. It is a probate sale, and the selling agent is also the executor of the estate, and the sole beneficiary. My wife and I are wondering if there is any reason to get our own realtor. We would enter escrow pending the result of a structural inspection, and the sale would basically be as-is. What am I missing here? My gut (and my father's) are telling me that getting my own realtor is the right thing to do. My brain is telling me that since the guy selling the house is also the realtor, that using him would be more attractive, and allow us to actually have a shot at getting this house at this price (a long shot, but I'll take it.)

    Basically, is there anything that I am missing in a situation like this? Thanks for looking at this for me.

    Blake
     
  2. Kirk Gunn

    Kirk Gunn Screenwriter

    Joined:
    Aug 16, 1999
    Messages:
    1,609
    Likes Received:
    0
    No reason to add another party into the transaction, imho.

    You should have more aggressive buying power dealing directly with the selling agency. On our first house, we were also haggling over some "repairs" that were around a grand. Since the selling and buying agents were from the same agency, they both agreed to shave .5% off their commissions and we ended up with a 1% discount. Their manager was happy because the agency still made the full 5% commission rather than splitting 6% with the buyer's agent.

    Now a true "Buyers Agent" is another matter. That is an agent that does not work on comission, but a fee-per-service. Kind of like an anti-agent that works solely for your best interest. Sounds good in theory, but I've never used one so can't comment.

    Good Luck - hope you're handy with a hammer !
     
  3. Blake G

    Blake G Agent

    Joined:
    Aug 22, 2001
    Messages:
    26
    Likes Received:
    0
    That is what I thought, although since the selling agent is the owner of the property, owner of the real estate firm, and his own broker, keeping all the eggs in one basket (even more so, considering the way this guy has things set up) would only benefit us.

    Thanks for the imput -- I own a hardware store, and have lots of friends who owe me favors -- so the hammer is covered!

    Blake
     
  4. Jim J

    Jim J Second Unit

    Joined:
    Mar 28, 1999
    Messages:
    290
    Likes Received:
    0
    I would only suggest you get a lawyer on your side (If it isn't already required by law)
     
  5. Erik.Ha

    Erik.Ha Supporting Actor

    Joined:
    Dec 24, 2003
    Messages:
    697
    Likes Received:
    0
    Blake:

    Get a real estate attorney.
     
  6. Glenn Overholt

    Glenn Overholt Producer

    Joined:
    Mar 24, 1999
    Messages:
    4,203
    Likes Received:
    0
    I don't think you need an attorney. What for?

    A real estate agent is almost necessary, or you might get taken unless you know all of the ins and outs about buying a home. Having the seller as your agent is sort of like using the other party's attorney in a court case.

    Glenn
     
  7. DaveF

    DaveF Moderator
    Moderator

    Joined:
    Mar 4, 2001
    Messages:
    17,976
    Likes Received:
    1,543
    Location:
    One Loudoun, Ashburn, VA
    Real Name:
    David Fischer
    Keep in mind that the agent is representing his self-interests (to sell his house at the greatest price) and not yours (to get the house at the cheapest price). The potential problem is having him "represent" you to his own advantage.

    It is possible to work without realtors -- my parents recently sold their home to a young couple and neither party had an agent. It worked well, went quickly, and everyone saved money.

    But if you don't know what you're doing you run the risk of having a shark take advantage of you.
     
  8. Erik.Ha

    Erik.Ha Supporting Actor

    Joined:
    Dec 24, 2003
    Messages:
    697
    Likes Received:
    0


    They got lucky...
     
  9. Blake G

    Blake G Agent

    Joined:
    Aug 22, 2001
    Messages:
    26
    Likes Received:
    0
    OK, I see where you guys are coming from -- I was planning on a few things: The sale would be contingent upon a full structural inspection & pest inspection, along with a walk-through with the seller and the buyer present (there are renters there now) Obviously, the property would be delivered vacant and cleaned out. The contract would be reviewed by a real estate attorney, to make sure that there are no spurious clauses in there. This is an as-is sale, I guess I just don't know what a realtor would be doing for their $15000 payday. I do not begrudge anyone their wages, and if we had been working with a realtor for a long time, then this would be money well spent, imho, but to bring someone in at this stage... This is our first house purchase -- am I way off base here?

    Thanks for all the advice.

    Blake
     
  10. Kirk Gunn

    Kirk Gunn Screenwriter

    Joined:
    Aug 16, 1999
    Messages:
    1,609
    Likes Received:
    0


    Well, I kind of agree with you, but.... the realtor gets paid by the seller. Somehow the realtor attracted you to the property, whether it was through an open-house, advertising, etc.
     
  11. Blake G

    Blake G Agent

    Joined:
    Aug 22, 2001
    Messages:
    26
    Likes Received:
    0


    Kirk -- like I said, IF we had been working with a realtor, I would gladly pay it. However, my wife found the house, got all the comps and all that -- we truly would be bringing in a realtor to look at some paperwork.

    What COULD go wrong with this kind of a deal? I guess I just don't see the huge risk involved, but like I said, we are young (26) and this is our first house purchasing experience...

    Thanks so much for all your information!!!

    Blake
     
  12. Matthew Todd

    Matthew Todd Second Unit

    Joined:
    Jan 3, 2000
    Messages:
    338
    Likes Received:
    0


    I would just make sure that it's viewed by YOUR real estate attorney, paid by YOU. Make sure they are representing you and not the seller.

    Matt
     
  13. Erik.Ha

    Erik.Ha Supporting Actor

    Joined:
    Dec 24, 2003
    Messages:
    697
    Likes Received:
    0


    My experience is, when it's YOUR deal that blows up, you don't really care that the odds were astonomically against it happening...

    The two antecdotes that come rushing to my mind, was one acquaintence of mine who several years after buying a house asked me a question about Real Estate chain of title recording. Her question (posed as a hypthetical) was "Suppose somebody bought a house and it turned out it had a bad chain of title... What would they do?"

    I glibly responded "No big deal. That's why they have Title insurance...."

    "What if they didn't get the title insurance?"

    I laughed out loud and said, "HA! Then they'd be SCREWED! Depending on the condition of the title, they might not even own the house... but that doesn't happen... everybody gets title insurance... it's CHEAP!"

    From the ashen color her face turned I immediatly knew that the hypothetical, WASN'T hypothetical, and that she was the one who didn't get the title insurance... If she had good advice initially, she would have been protected. A few years later I asked her what happened with "all that" and she told me that they lost the house, were suing to get the money back, it was costing them a fortune, it was still ongoing, and "it didn't look good"...

    The other antecdote, happened to a famous actor, whom a friend of mine represented the last few years of his life. In the 80s he purchased his "dream house" along the California Coast. While he was buying it, he found out he had cancer (at a rather young age) and didn't have the deal looked at as well as he should have... House turned out to be the Money Pit. Absolute mess. Problem with EPA, contaminated soil, superfund stuff, mold, dry rot, floods, termites, frogs, locusts, bad water, you name it, it had it... He got into litigation over the deal that lasted about 10 years and cost MILLIONS of dollars... Unfortunately, 5 of those years were AFTER his death. The toll the whole thing took certainly didn't help his health, and almost certainly harmed it.

    What you don't want to do it "buy a lawsuit." A few hundred bucks gives you the peace of mind that you're not...
     
  14. Blake G

    Blake G Agent

    Joined:
    Aug 22, 2001
    Messages:
    26
    Likes Received:
    0


    Kirk -- like I said, IF we had been working with a realtor, I would gladly pay it. However, my wife found the house, got all the comps and all that -- we truly would be bringing in a realtor to look at some paperwork.

    What COULD go wrong with this kind of a deal? I guess I just don't see the huge risk involved, but like I said, we are young (26) and this is our first house purchasing experience...

    Thanks so much for all your information!!!

    Blake
     
  15. Paul His

    Paul His Agent

    Joined:
    Jan 10, 2004
    Messages:
    29
    Likes Received:
    0
    One of our senior managers at my employer, during a presentation on the advantages and perils of expanding a business, once commented that "sometimes you don't know enough to even know what you don't know".

    Lots can go wrong. Ask yourself this - how do you know who even has legal ownership and title to that property? What other debts or claims could be registered against the property?

    Hire a lawyer. They'll do a title search, make sure the sales documents are fair and in order and look after little details like making sure utilities are transferred properly in a timely manner.

    Paul H
     
  16. Kirk Gunn

    Kirk Gunn Screenwriter

    Joined:
    Aug 16, 1999
    Messages:
    1,609
    Likes Received:
    0
    Good point about title insurance, and I don't think you can finance a home in MD without it (at least our 2 houses had it).

    Kind of ironic: You pay a company to perform a title search, then you insure the company you just paid to do the search in case they actually didn't do their job very well.
     
  17. Blake G

    Blake G Agent

    Joined:
    Aug 22, 2001
    Messages:
    26
    Likes Received:
    0
    Hey there guys -- just a quick update.

    My wife found an attorney that specializes in Real Estate, they have a 10 hour 'package' that includes title search, prep of the offer, review of the contract and anything else that might come up. Of course, whether or not it actually takes 10 hours, that is what we pay for. Still, it is a heck of a lot less than the commish that a realtor would charge, and since there is no such thing as a buyers agent, we feel that an attorney would better represent our rights.

    Blake
     
  18. Cary_H

    Cary_H Second Unit

    Joined:
    Jun 7, 2003
    Messages:
    280
    Likes Received:
    0
    I don't know what the Agency rules are in your area, but under the most prevalent of them out there the realtor that introduced you to the property is it. That is, if you made first contact with this guy on his property he has dibs on you. He is not obligated to pay a fee to any realtor you bring in after the fact.
    I'd watch yourself around the lawyer thing. They're not always abreast of changes in the industry like sharp realtors are. I have seen them butcher contracts worse than green realtors. I have seen a lot of deals go sideways when a lawyer was acting for one of the parties. If you wanna see loose, sloppy contracts, these are your guys.

    And if I were to sit down a reel off all the stories I know around deals "going south" I'd need to sit here for a week. And I am not exaggerating.
    I have seen real tight, smooth deals blow up at the drop of a hat.

    One thing I'll say......I do not like the idea of leaving it up to this guy to look out for your best interests in this deal. He could eat you for breakfast, shit you out before noon....and some lawyers won't even have seen it coming.
    I would recommend you have the contract looked over by a sharp Agent of a good real estate company....prior to your final signing and/or removing subjects.
    By that I mean the person who holds license and acts as the "Agent" for the office. This is a higher license than that of your everyday realtor. They ought to have seen just about everything and will know what ought to be in the agreement to protect your butts.
    I will bet the seller sits as the Agent for his company.
     
  19. Jim J

    Jim J Second Unit

    Joined:
    Mar 28, 1999
    Messages:
    290
    Likes Received:
    0
    Well, where I live NJ, I believe it is law that an attorney be part of any real estate transaction.

    In my case, I thank my lucky stars I had a good lawyer on my side, in a purchase. Real estate agents are paid on commission. I do not believe there is any such thing as a 'Buyer's' agent. They all are on the side of the seller. That's where they are paid from. simple as that.

    Don't get me wrong, I'm no fan of lawyers. they *used* to be on the bottom of my list. After my last real estate dealings (hopefully for a long time to come), Real Estate agents Now scrape the bottom. As usual IMO, YMMV, etc, etc

    At least Lawyers have to take an oath at some point. when they join the BAR or something. (not they all uphold it or anything, but if there are ethics issues, there is somewhere to go)
     
  20. Kirk Gunn

    Kirk Gunn Screenwriter

    Joined:
    Aug 16, 1999
    Messages:
    1,609
    Likes Received:
    0


    Actually there are (at least in Maryland and some other states). They do not work for a listing agency, and do not get commission off the sale. They are paid a fee by the buyer, so owe no allegiance to the realtors that are bound to represent the seller. They are tasked with assisting the purchaser through the process.

    To confuse matters even more... some realtors representing the sellers also claim to be "buyer's agents". When we sold our old house, the agent that listed it claimed he would then be our "buyer's agent" when we purchesed our next home. Total BS.
     

Share This Page