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Probably the biggest buyer misconception

sreid2710

sreid2710

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There is a big misconception when it comes to many buyers and renters, especially those who have never done a transaction with a realtor. There is this misunderstanding of who pays the realtor. It happens all the time and is something that should be clarified on first contact.

Many buyers believe that if they do a private transaction, they are better off financially. Well this is a huge misunderstanding. Many inexperienced buyers have this misconception that they are the ones who pay the realtor during the process of a normal transaction. This results in various buyers not using the expertise of realtors, resulting in them receiving a raw deal.
 
Thomas Beyer

Thomas Beyer

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Since the buyer pays the seller and the seller pays a realtor the buyer pays the realtor indirectly. What matters of course is price relative to value regardless of realtor listed or private transaction.
 
E

E

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If you can purchase properties directly from owners and sell them directly to owners there's opportunity to make a few points on each side done right enough times and you can end up doing OK. Even better yet what's happening in Vancouver if you can find an owner directly tied up the property in contract with an assignment clause and then resell it to a new purchaser you will save on the property transfer tax is well this is a strategy that is happening in the current Vancouver market and also happens in all markets as well
 
Matt Crowley

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sreid2710 said:
This results in various buyers not using the expertise of realtors, resulting in them receiving a raw deal.
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Haha, but seriously there is usually no disadvantage to using a buyer's Realtor...except that you pay a higher price as a buyer than you could without a Realtor. Ultimately, the vendor should care about the net cash received.
 
Sherilynn

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Even though it is possible to save money on FSBO's, I still prefer using realtors for purchases with conventional financing. I find I end up doing the bulk of the work in most FSBO transactions. I'd rather pay a small amount extra to encompass realtor fees and have realtors do it. Since the extra amount is included in the purchase price, and therefore the mortgage, it is really my tenants footing the bill anyway.
 
E

E

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Yup that totally makes sense! Our time is the most valuable thing we can control :) there are some firms though who specialize in buying directly from owners and selling directly from owners their business model revolves around compiling a database of buyers and sellers to complete transactions with directly. From my experience these type of firms tend to be purchasing multifamily or commercial properties in larger scale's where it may be more worth the invested time.
 
R

RE123RE

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sreid2710 said:
Many buyers believe that if they do a private transaction, they are better off financially.
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Hi,
Actually they are often correct. The reason is when no realtor is involved, the gap between the experience of the seller and the buyer can benefit the more experienced, more than when a realtor or 2 is/are involved.
Realtors reduce the variation in the gaps between market values and selling prices.
Thanks
 
Thomas Beyer

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Like many professions, many realtors add value, but some are idiots as the barriers to entry are so low.

In general, as a buyer, you can often get a better price if you do not have a realtor, i.e. the selling realtor gets both sides of the (usually split) commission so he/she makes more money even if price is 10% lower !
 
J

James Knull

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Thomas raises a great point - getting a realtors license requires 4-6 months of fairly simple licensing education. Choose a realtor wisely, a good one is worth every penny and more.

There are so many nuances of doing a deal properly that most people who only do a few deals a year don't know about or encounter. A good realtor will patiently handle these types of unusual circumstances without jeopardizing or crashing the deal .

Further, a good realtor will have the connections to find you good deals and the hustle to get you there to seem them first. That's often the difference between getting a good property and getting an amazing deal.
 
Rickson9

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I like looking at realtor IMS sales data to see how well they're doing
 
RedlineBrett

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Rickson9 said:
I like looking at realtor IMS sales data to see how well they're doing
Click to expand...

Transactions are way down in Calgary, so many are hurting bigtime. Going to get worse too, with all kinds of people looking for ways to supplement their income and deciding to get their licenses to sell.

If you are going to use an agent (and you should, unless you are an expert, and even then you still should ;) ) be careful who you choose. Who you work with matters!
 
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RELover

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We bought an MLS listing without a realtor. Definitely saved close to $20k. We made it clear to the seller than he will save 2.5% plus tax because they will have to pay only the seller side of the commission. It worked out for us because we knew this area inside out. May not work out all the time.
 
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