Read below before you talk to any real estate agent.
- Are you looking for a professional agent who is friendly or are you looking for a friendly agent? Huge difference. The friendly agent will try to first become your friend (by paying for lunches/dinners, gifts, taking you out and around...) so you will feel uncomfortable asking questions, negotiating their commission, or firing them. Nobody likes doing that to friends, right? I mean do you get the same behavior from other "professionals" like doctors, attorneys, CPAs...? Are they trying hard to be your friends? If you are looking to meet a new friend who happens to be an agent, then everything I am discussing below is irrelevant. If you are looking for a professional to hold accountable for his/her services then please read on.
- "Commissions are paid by sellers. You (the buyer) don't pay commissions!" If an agent tells you that, he/she is lying. The fact that the seller's agent and the buyer's agent commissions are included in the price you (the buyer) pay does not mean you do not pay commissions. It is like a waiter at a restaurant telling you that because the tip is included in your bill, you don't pay it but the restaurant does. Why is this concept easy to understand at the restaurant but not with much higher priced real estate transactions? This is a hard concept for foreign buyers to understand, so they believe their agent when he/she tells them the commission is paid by the seller and they don't pay a commission. Developers of new condo projects in South Florida take advantage of the situation to attract greedy agents and their clueless foreign cash buyers. Here is how it works: the developers offer high commissions to agents to bring buyers, often up to 8% of the purchase price. These agents tell all these rich foreign buyers about this "great investment opportunity in south Florida" and not to worry about commissions since the "seller/developer" pays them. These foreign buyers buy thanks to the convincing enthusiasm of the agents they think are representing them to get this great deal. In reality they have no clue they are needlessly paying an outrageous high price for their agent and the property. They could have purchased that $1,000,000 condo for $970,000 if their agent took 3% instead of 8% in commission from the developer. Their agent just cost them 8% of $1,000,000 or $80,000 for a few days worth of work. No wonder that agent was so nice, convincing, and smiling all the time.
-Most buyers don't even know they have the right to know ahead of time how much commission their agent will be collecting from the purchase price. They also don't know they have the right to negotiate commissions. Now you know, so don't be shy!
- What are you getting for the 3% or more in commission that was allocated by the seller for your agent from the purchase price? Sadly, we all check the $150 restaurant bill to make sure that we did not get over-charged; but nobody bothers to check what they are really getting for the thousands of dollars in commission they are going to be charged at closing for their agent... Anybody can spend a few days driving you around and showing you homes or condos. Does that justify them getting $30,000 or more for those few days of work? Was that brain surgery?
- "I will represent your best interest and negotiate hard to get you the lowest price!" Really? Unfortunately most agents lead you to think they are representing you, when in actuality they never made you sign a buyer-broker agreement that confirms that promise in writing. If you never signed a piece of paper to this effect, your agent is really working for the commission and is legally just required to treat you fairly. Fairly does not mean representing your best interest. Big costly mistake to believe verbal promises. Also, please remember that in the end the purchase price is set by what the buyer is willing to pay and what the seller is willing to accept. Your buyer's agent is not negotiating with the seller, you are.
Contact me if you are looking for honest and professional representation with your next home or condo purchase. I will tell you before we start looking at properties what my services include, how much my commission will be, and how much I will refund you of any excess amount received at closing. All in writing, obviously.
Waterfront Specialist serving the coastline from Palm Beach to South Beach
Founder of TheBestWaterfront.com & EliteWaterfront.com
Master in Real Estate, University of Florida
Member of Who's Who in Luxury Real Estate
Member of the Institute for Luxury Home Marketing
Certified REO Specialist (Foreclosures/Bank Owned)
Certified in Short Sales and Distressed Properties
RE/MAX Sun & Sea
Direct (561) 929-9955 or
Office: (954) 999-4668 or (305) 787-4240
Toll Free (888) 848-9283
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