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Comment by calbear81 | Hacker News Reader

I've used buyers agents (1 traditional, 1 Redfin) when I've bought homes since they are being paid from the Seller's Fees and in most states I believe they are legally bound to act in your best interest. I've had a new construction seller try to convince me to not get an agent and would give a discount instead but felt that the risk wasn't worth it especially since most buyers agents I've engaged with have been open to refunding some of the fee if you're doing most of the legwork to find homes, tour them, etc.

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since they are being paid from the Seller's Fees

This is a myth perpetuated by buyer's agents. Just because you aren't writing a check doesn't mean it doesn't come out of your pocket.

It's like sales tax. It's collected and paid to the government by stores, but it makes everything you buy more expensive.

I agree with you based on who is bringing the money to the table, but in most cases, the seller has signed a contract with the listing agent stating the fee structure for the deal before you made an offer on the house. The seller has obligated themselves to that structure, so you're not saving money by doing it yourself.

I found our house entirely myself, but brought in an agent on "my" side with whom I'd negotiated a 75bpp refund if I bought a specific property. I did and they cut me a check (out of my own money) at closing. In retrospect, I perhaps should have held out for a full point. (1 for the agent, 1 for the agent's brokerage, 1 for me)

Is there a reason you didn't do the deal without an agent and specify in your offer that you wanted the entire 3 points rebated back to you (which is kind of silly accounting, but whatever)?

Certainly this would have been possible.

The contract that I signed to sell another property specified that the full commission was due from the seller regardless of buyer representation, but that any registered real estate agent working on behalf of the buyer would share equally in the commission, paid by the listing agency.

IOW, I don't think it would have been possible, as it wouldn't have been possible in my listing contract. If I thought it was possible, I'd definitely have gone that route (since 300 >> 75).

TBH, "my" agent added extremely little (it was her first closing) and may not have even been a net positive towards getting the deal to happen.

Edit: This was an existing house, not new construction.

> The contract that I signed to sell another property specified that the full commission was due from the seller regardless of buyer representation, but that any registered real estate agent working on behalf of the buyer would share equally in the commission, paid by the listing agency.

Not anti-competitive, at all...

While I find real estate representation to be an inefficient anachronistic racket overall, I'm not sure that specific term is anti-competitive nor particularly egregious. See my sibling/cousin comment for why I think that.

Seller's contracts are so weird in that they specify a 2x difference in fee depending on whether the buyer has an agent or not. SO WEIRD.

From the seller's perspective, the fee is the same. The seller wants a piece of property sold and is willing to pay a certain commission and signs a contract to make that happen. They're paying for an outcome not an input, effort, or number of mouths fed/hands out.

Whether it sells to Abel who has a traditional agent, Baker who has a buyer's agent, Charlie who uses an agent who happens to be at the listing agent's agency, or Dave who doesn't have any agent at all, doesn't change the seller's commission charge, which seems roughly reasonable and aligned with the value the seller received.

Curious..."how do you know "certainly this would have been possible?'

Which market/city are you referencing?

certainly was perhaps too strong a word to use. How about "seemingly" ?

I guess I'm saying I don't see any reason it shouldn't have been possible.

I appreciate your point and I wasn't trying to nitpick.

For some builders I would guess you would be right, though I'm not confident that all/most would though. New construction "seemingly" should allow that. Totally agree.

The seller has a contract to pay 5-6% when the home is sold. If the buyer is unrepresented, the seller is still paying 5%. The agent has to do much more work to handle a sale with an unrepresented buyer, because they are representing them. If the seller could not pay this 2-3% because the buyer was unrepresented they would keep the money, not give a discount. Presumably they could find another unrepresented buyer too so there is no reason for the seller to give you a discount over other buyers.

Some builders have their in office agent, depending on the state, that agent will represent both sides of the transaction in that case, so you aren't saving any money by not having an agent.

The other thing you should absolutely never do, as a buyer, is use a home inspector recommended by either the seller's agent, the seller themselves, or even your own buyers agent. Choose one yourself.

Anything else and they have too much of an incentive to produce an inspection report that will result in a quickly closed sale.

Disclosure: my spouse is a home inspector

It's a bit extreme outright dismiss an inspector just because they are recommended by your own agent (there is no reason whatsoever to even ask the selling agent for such advice). After all, you've hired them for their expertise and advice, and they see and know a lot more home inspectors than you. Of course, look at the recommended inspectors and do your own homework, like anything else. But if you can't trust your agent to recommend an inspection I question why you are working with them in the first place.

While the inspector recommended by your agent might be fine, there is an implied incentive/bias for the inspector to help close the sale;

The recommending agent is a marketing arm for the inspector; if the wrong deal falls apart because of the inspection, the inspector knows the agent isn't going to get their commission, whether or not that means they'll recommend them with as much fervor the next time can be largely dependent on how badly the agent needed the money that time.

But, by hiring without an agent referral; the inspector has no incentive to approve a house that shouldn't be approved; you're not going to be the new marketing arm. Indeed, absent a relationship with an agent, the inspector has an interest in inspecting as many properties for you as possible, and therefore finding as many deal breakers as possible.

The flaw here is in thinking just because you find an inspector on your own that makes a difference in incentives. Who do you think the inspector has the most incentive to impress? The buyer whom they most likely will never see again or the agent who can potentially provide more and more clients?

This is my point in the last paragraph; you should ideally never let them meet.

My mother owns a residential real estate brokerage. She's siting next to me and thinks the previous post has misguided advise. She has been a broker for over 30 years.

She recommends that you always ask your agent for a home inspector recommendation.

"We pick the best home inspectors by the ones that performed the best in previous deals. We don't get $1 for recommendations. We wouldn't want to incase there was ever a problem down the road. Getting a high quality home inspector is much harder than it looks.".

Respectfully, I would ask if your mother has ever worked in a residential real estate market as overheated and bubble-like such as the metro Vancouver BC area.

Shadow-flipping, assignments, double dealing have become the norm here.

https://www.google.com/search?q=vancouver+real+estate+corrup...

There are many many markets. Totally agree there.

I appreciate your point. But by the same token, you are extending a reality that might be in Vancouver to all of real estate markets.

This is one of the issue that I think makes Real Estate so complexed is that it's super easy to group it together as if 200 cities are one market.

I wouldn't even know if you could group large areas together (like all agents in.... 'The South" "The west coast" "The East Coast"...do it this way.)

Seems like they would open themselves up to some sort of liability if that happens.

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