Signed Up A Buyer's Agent with 70% Rebate

Well my wife and I recently opted to sign up for a buyer's agent for our home search. My wife wanted to use a full service agent, but she eventually agreed to "try out" a buyer's agent that offered a rebate.

My wife felt that a full service agent would be able to guide us to the right house, after all we currently have high expectations and realize there need to be some tradeoffs if we are going to stay within or at least close to our price range. She also has already gotten sick of search for sale listings online and wants someone to weed out canidates for us. She knows a discount agent will do nothing more than open the doors for us and pull information out of the MLS at our request.

I felt strongly that we should use a buyer's agent with a rebate. I felt like regardless of whether we used a full service agent or a discount one we would still be searching the for sale listings and struggle to find a house in the area we are looking. While a full service broker might help us find what we are looking for a little easier, that extra assistance isn't worth a rough ~$5,000 rebate from the buyer's agent on a $300k house.

If we don't find anything in the next couple months think we will need to reconsider our decision to "try out" a discount buyer's agent.

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Comments (7)

Been reading your blog over a year. Man, your wife sounds like she is high maintenance! I hope that she is hot - if not, maybe you should try for an upgrade in the marital department before you buy another piece of property!

Posted by Spanky | November 25, 2008 5:05 PM

If you can't find a house within your price range even with the worst financial and housing crisis in virtual US history, then I'd say house prices still have a LONG way to fall. I'm guessing another 25% fall. These drops tend to take several years. I might wait a few more years to purchase.

Posted by Anonymous | November 25, 2008 7:13 PM

hi 2million,

I've been reading your blog for quite some time. I enjoy your posts and agree with most things that you say, however in regards to using a discount agent, I definitely feel like it depends on the buyer.

The value of a real estate agent is threefold:
1) local knowledge and expertise in your search area. You wouldn't want to choose an agent that lives in downtown to take you to look for homes in a suburbs three hours away (even if he or she was willing to drive there)
2) experience in closing the deal-any given real estate transaction can have several deadlines, details, and nuaces that an experienced agent can help their clients navigate through.
3) negotiation-if your agent can easily give away 70% of his own commission, then how strong of a negotiator do you think he'll me with your money?

Just my two cents from a full service Silicon Valley real estate broker. Have a Happy Thanksgiving!

Posted by Alex Wang | November 26, 2008 5:03 AM

Good luck with the house search....Hopefully in this market you can capture a great deal and save some money with fees along the way

Posted by Elias | November 26, 2008 6:34 AM

What is it that you and your wife are looking for in a 300k house in RTP that you can not find? For 300k here you can get a TON of house...much more than a lot of other areas. I am not following how this is so difficult...

Posted by Anonymous | November 28, 2008 11:22 PM

In my opinion, no way. Buyer agents are just one mroe hand in the cookie jar, one more mediator pushing for the deal and a paycheck.

After becoming wise to the fact that buyer agents are nothing more than another mouth to feed and a hurdle to direct communication in negotiations, my husband and I dropped our buyer agent. Now we deal directly with the listing agent. I see no downside. I search for my own listings. I do my own due diligence. I search public records myself. I hire my own inspector. I hire an attorney to review the documents and to represent me at the closing. This method costs less than a buyer's agent, provides me more control over my own deal AND it motivates the listing agent to push the seller into a better price.

The Internet has made buyer's agents irrelevant.

Posted by Karel Zeman | January 22, 2009 12:58 AM

Karel, how do you deal with the listing agent for a house viewing? Typically it is your agent or a designated selling agent who shows the house, so if you don't have an agent, there's the extra burden on the listing agent to do the showings. Have you had problems with this? Then once you decide to make an offer, do you have your attorney draw up the offer, or do you do something less formal until you have an agreement in principle?

Posted by kvan | January 25, 2009 11:08 PM