Before you look at even ONE house, from IN or even ON an owner’s property, you need to understand the basic framework put into place before the home was listed for sale.
A “For Sale” sign is not a “license to trespass” on someone else’s property.
You are basically walking into the middle of a commission structure AND instruction for your being able “to see it” structure, that is already in place. This arrangement was set BEFORE it was listed for sale by the owner of the property, and that owner’s agreement with “the mls system” and his agent, before the For Sale sign was put in front of the house.
It is something you must comply with, and so something you need to FULLY understand BEFORE you step on or in someone’s private property.
This is true when you walk into any home that is for sale AND listed via an mls system. You do not have permission to go on or in an owner’s private property, except via the owner’s permission or via an agent who is a member of the mls system. That includes opening the owner’s gate and going in their yard and peeking in their windows. There is no entitlement to trespass on an owner’s property just because it is “for sale”. Some think if a property is vacant and there is a For Sale sign out front, that gives them the “right” to trespass on the property and peek in the windows. It does not.
Without permission from someone with the authority to give you that permission…that is called trespassing. Those with the authority to give you that permission to step ON or IN an owner’s property, do not do that “for free”. You should not be going in or on someone’s property without understanding that you are paying for that privelege by doing so, as the structure to pay someone to let you on or in is already in place via the seller so that you CAN see it. You can’t ask to be on the owner’s property and then try to DICTATE that the seller CAN’T pay the person who provided that access for you.
That is not a FREE “service” and the seller has already promised to pay someone to afford you the opportunity to be on and in his property.
Below is a comment I made on Craig’s post to assist him in knowing what he can and cannot “promise” to give away.
If and when a Buyer includes a portion of “Do It Yourself – DIY” into the scenario to “save money”, they must do so without the “use” of agents…be that the Seller’s Agent or a Buyer’s Agent. Doing some of it YOURSELF…must be YOURSELF and not yourself in the room with an agent whom you do not plan to use to represent you in a real estate transaction.
IF you plan to use an Alternative Business Model or Traditional Agent who will PAY you for the portion you choose to handle “by yourself”, you need to hire them in advance of seeing any home. You also need to be certain that the portion of “rebate” you are looking to get is for work that YOU did with no agent contact whatsoever, outside of the agent you hire to represent you.
Below is the reason WHY, and also my response to Craig who asked the question in the Rain City Guide post previous to this one. Below is my comment, in response to his quandary, in its entirety.
“Let’s assume for a minute that there is a 6% commission set by the seller to his purpose of selling his home, of which the original referring agent (the Listing Agent) and the “Procuring Cause
Ardell- This lays it all out. I’m sure
most people don’t understand the
Real Estate Rules that govern.
Jerry,
But WHY is that, Jerry?
When a seller calls someone, they understand they are calling them to potentially hire them to sell their home. No confusion there. They understand that if an agent is taking pictures of the home and making flyers, that one day all the things the agent is doing will be paid for…at closing.
I’m not quite sure why a buyer picks up the phone and asks to “see” a house without that same understanding?
Some will say because the seller signs a contract to pay, but not necessarily so. Because our mls requires that a listing be put in the mls within 24 hours of contract signing, I often work “in advance” of contract. Most always. I have been getting a home ready for sale for weeks now. First I went and worked out a list of all the things we would do to get the home ready for market. At that time we decided we would be waiting for the family to move out. Now I am there day after day helping to stage the home for the pictures to make the flyers. We set a date to sign the contract for Sunday and the home will be in the mls on Monday.
In that seller scenario, the contract won’t be signed until Sunday, but the seller clearly understands that I wouldn’t be in his house day after day working…for free. I don’t have to beat him over the head with that fact…he knows it without my having to tell him.
Why would a buyer pick up the phone and ask to see houses, go out with that someone, choose a home, and then think it is time to “pick an agent” to represent them?
When I’m moving things around in a sellers home and bringing pictures to hang on his wall…he knows he already “picked an agent” to represent him. Why does a buyer not come to the same conclusion?
Here’s a good example. You go into a restaurant. You order food. If you don’t like the waiter, you may ask for a different waiter. But you don’t get to the end of the meal when it’s time to pay and say I want you to pay that other waiter…and oh, by the way…he didn’t do anything for me so let’s not pay him at all. You don’t use the service of one and then switch to someone else and pay less because the someone else didn’t DO much.
Yes…you can probably choose which waiter you want, if you know which one you want when you walk in the door. But you can’t switch waiters after you are finished eating and then wonder why the first one is wanting to be paid.
In our area it seems like no matter what you do there will always be buyers that just go knocking at the sellers door to see if they can take a look. This can make some sellers extremely mad and if they get mad who do you think they take it out on? The agent.
I haven’t seen that here, Jon. But I do have people wanting to come in when I am showing a property to someone else. That can be awkward. They see me in there with clients and once in a while walk in like it’s an Open House! Or…they ask if they can come in and take a peek.
If my clients hate the house, sometimes I say yes. But if my clients like the house, I usually say no. 🙂 Happened just the other day and most often it happens if I am showing it the day it is listed. That also usually means it is going to get multiple offers and sell quickly. The one I showed two weeks ago where two people came while I was showing it went into escrow pretty quickly.
I think it is not a matter of ignorance, I think these people simply are rude and do not care if they are trespassing. However, in my area, it is a good way to either get shot or have a dog let loose on you.
Yes Mark, it is actually a point of being selfish and only seeing their side of the equation as in “I want to see what that house for sale looks like”, without considering that it is someone else’s property and trespassing.
They view a “For Sale” sign as a license to inspect, like a vase on a shelf in the department store that they can pick up and hold and look at from all angles merely because it is “For Sale”.
That’s why I say “Real Estate is not a Self-Serve” Industry. The product is not the same as an item in a Department Store. I have had a buyer jump on the sofa to open and close windows to make sure they open and close. He didn’t even realize that he was jumping on someone’s furniture with his dirty shoes until I freaked out. He was only thinking about knowing if the windows open and close.
Rude doesn’t quite cover it…self centered maybe?
I have had some awkward moments with people just randomly showing up to a house while I am showing my clients the home. I just simply hand them my card and tell them if they would like to see this home they can call me for an appointment.
This happens quite a bit. Some people are simply not aware of the proper etiquette for home viewings or are under the impression they are doing the seller a favor just by showing interest. I pretty much follow Mike’s example whenever a similar situation arises – hand them a card, and tell them they need to make an appointment.
Alex,
I would do that if it were my listing and I represented the Seller and it is a Courtesy showing. But would you do that if it was your buyer client you were showing the home to?
That brings up a post I am going to write and have been going to write for some time. I will not take on two clients who are in the same price range in the same place, so no I wouldn’t offer to show it to them later. What if the client I am with likes it and then I come back with a different buyer and they like it too? That would be a conflict of interest.
If your client liked it, but wasn’t ready to buy yet or make a decision yet, or if you don’t know that yet when someone comes up to the house, why would you hand them your card and offer to help both of them on the same house? How is that even possible?
This is a wonderful explanation of how real estate works that every buyer should read, but unfortunately most won’t. And many outh there searching for that ever wonderful ‘deal’ will get themselves in some difficulty because they don’t understand the way real estate works.
Gabe,
I’m making a Real Estate “Board Game” and shooting a video of Buyer, Seller, MLS, Agent for Buyer, Agent for Seller”, and “rebate company” as players” playing it. That might help. 🙂 I’ve tried it in real life and people seem to “get” real estate better after playing the game. They say it should be a TV show. LOL!
I can understand some Agents feeling “used” by a potential Buyer just to gain access into a home. But, I’ve worked on commission in several areas before and while that can be frustrating, those are the breaks if you work on commission. There was a sign in the break room of my first job (I was 17) that said “Commission=No Whining.”
Also, what about Open Houses? Usually hosted by the Selling Agent- clearly there is a conflict of interest for them to represent both parties and many of them will not. And what if you are touring a home with an agent that you thought you’d like after speaking on the phone. But then in the course of the interaction, you’ve decided they either sniff glue or are a complete Tool? If you like the house enough to buy it, are you still obligated to entrust your time and money to someone whom you feel isn’t competent? I’d say no. How would that adequately represent the Buyer’s position?
While what you say may be good advice and common courtesy, this reads more like “real estate etiquette 101” versus actual “Rules”… Who/where is the enforcing body of these “rules”? What are the penalties? Do the “Buying Police” show up at your door if you transgress?
And a final comment; I recently purchased a home – in spite of both Agents I might add. (Their Toolish behavior surfaced as soon as a smidgen of effort was required on either of their parts and I ended up doing both their jobs). If in the future I want to sell my home, I’ll welcome any and all interest. I won’t whine if there are people peeping in the windows (there are these things called curtains…). And I won’t give a darn what Agent the Buyer uses. I’d honor my contract with my agent, but otherwise my goal would be to get the house sold- period. My feeling is that the Agents involved need to be professional and savvy enough to protect themselves – they are handling transactions in the 6 figure range, so they’d better be up for the task. If they expect anyone else to do that for them, then my suggestion is that they need to find another line of work.
Love your comment Lee. Especially this part, “But then in the course of the interaction, you’ve decided they either sniff glue or are a complete Tool?”
The “Rules” are for the agents. The NWMLS has almost 200 rules. (Just checked…we’re up to 196 Rules)
Only “Members” can “List a Property for sale in the MLS” and only “Members” need to follow the rules. The seller does not “list his home for sale in the mls”. A Member of “the mls” lists his home for sale in the mls…subject to 196 Rules.
Under the current “Rules”, you, the Seller, agree to pay X to YOUR agent who agrees to keep it…or not…or pay it to the Agent for the Buyer…or a couple of Agent’s for the Buyer. THAT is how Buyers can do whatever they damn please…except tell the mls who to pay the commission to.
In addition to “rules” there are hearings for Member Brokers who need guidance with regard to “who should get the Buyer Agent Commission?” And the answer is never “the buyer”.
A Buyer CAN work out a “rebate” with their agent…IF they don’t use other agents, including the Listing Agent. It’s not “a rule” for the buyer…but neither is the buyer getting an Agent’s Commission in “the rule book”. 🙂
MANY of my clients first saw property with “A Tool”. Many, many over 21 years. I don’t lose buyers. Other Agent’s buyers come to me when they leave “the tool” agent. 99 times out of 100, they don’t BUY any of the properties they saw with “The Tool Agent”…and it is a non-issue.
What you can’t do is call an agent to show you a house, maybe even 3X, decide to buy it…and then go look for an agent to write it up for less money and give you the commission. There are NO RULES for buyers, nor is there a buyer “entitlement” to the Real Estate Agent Commission.
If you don’t want the commission, you can do whatever you want. But if you want to work a deal where an agent gives you part of the commission, and this happens every day now, you have to PICK that agent before you look at houses. Capish? Seems fair to me. You can’t go to Safeway and then ask for the Coupon Money from QFC. If you want to turn in a rebate coupon…it has to be at the store you “shopped in”.
Lee,
This was partially written due to your comments about selling your house. This is what needs to be done before the sign goes on the lawn, in many if not most cases.
http://raincityguide.com/2011/07/11/why-agents-are-better-than-lawyers/
An agent should never quote a cost of service without first seeing the property that is to be sold. I learned that the hard way some years back. 🙂
I recently listed a co-op with a realtor who will not post signs anywhere at all. He said he would get ticketed if he did that. His newspaper ads cater to non americans.
The realtor said if i find my own buyer he will lower his commission by 1/2.
i have a current mls listing but traffic generated is not much, and even though I keep lowering the price it seems everyone wants it for practically nothing. At this point I will not recoup my total renovation costs at all, and am still facing greater profitability loses by continually dropping the price.
The appraisal price is $40,000.00 lower than my current MLS asking price now.
My question is can i legally have a friend who owns a business place a flyer with my cell phone # inside his store front window stating co-op for sale along with the current price, monthly maintenance, and a general description of the property, or is this not legally allowed?
I wish to thank everybody in advance for any replies which would definitely be legally accurate, as they would be most appreciated, bearing in mind that I do not want to step on any toes by placing a flyer in a friends store front business illegally, nor do I want to be ticketed for doing so, or causing my friend any unforeseen aggravation.
Hi Marie,
A blog can’t be “legally accurate” as to your question and responses. Only lawyers can be “legally accurate”, and even then cannot be legally accurate in a blog post response.
That said, my best guess is the co-op board has rules against signage and you would be the one who would get the fine (not ticketed) by the Board. OR the place you want a sign is on City Property outside (like a sandwich board sign out on the pavement) and that may not be allowed by the City. It is not uncommon for condo or co-op buildings to have sign rules and fines for violating. You may want to ask your co-op Board what other owners have done with regard to signage when selling their units.
I see no reason why you can’t post an ad anywhere you want as the owner of the property. It seems the Realtor you hired has invited you to try by offering to reduce the commission if you can find a buyer. Very simple to tell him your idea. I doubt he would have any objections, and may welcome your assistance and value your thoughts.
If you had the property appraised after the renovations, and you are asking $40,000 more than the appraised vale (vs tax assessed value), that doesn’t sound right since properties should sell fairly close to current appraised value.
Whether or not you can put a sign in your friend’s business window is up to your friend and the rules regarding signs in window for that business and location. Are there other signs in the window of his business? Some areas have rules for not taping things to the glass of a store window, but your friend would know best what the rules are where his shop is.
This blog post is useful to know. One would hope that buyers’ agents would also make this clear to prospective buyers.
I disagree, though, that your points are common sense. There are many situations in which the “inspect what you are going to buy” phase does not entail any commitment: shopping for a car, looking at homes to rent, searching for airline tickets with a travel agent, getting quotes from moving companies, etc. In each case, there is a clear moment at which you sign an agreement or hand over your credit card, and before then, it is understood that you have not made any commitment. In some cases (e.g. a travel agent), the agent may do 99% of the work before the customer commits to paying.
I can’t think of any other major transaction where you need to make a binding commitment to work with a particular agent before you see what you are buying, and where this commitment isn’t even explicitly acknowledged. In some states, I have heard of an agent showing prospective buyers homes A, B and C, and then successfully claiming the right to represent them on their purchase of home D, which the buyers found themselves.
The buyer’s agent usually does not make it clear to prospective buyers because the agreement that covers both the seller’s agent and buyer’s agent commission has to be in place before the home is available to be seen. That agreement to pay the person who is responsible for the sale of the house, whether they represent the buyer or not, is signed by the seller when the home is listed for sale.
When you buy a car, the person who “shows you” the car and takes you for a test drive does not tell you he will get paid if you buy the car. Nor do you see what that person gets paid if you do buy that car. So I don’t agree that buying a car is really any different. If you look at 20 cars with that salesperson in the showroom and order a completely different car from that person at the car dealership that he didn’t show you, he still gets paid even though he did not show you the car you bought. You just don’t think about that when you write the check to buy the car.
You never write a check to pay for your buyer’s agent. You write a check to pay for the house the same way that you write a check to pay for the car, or you get financing. Same thing.
As for A, B, C buy D…it’s the same as the car dealer who shows you 4 models in 4 colors and you order one of the models in a completely different color with different features. The final payment on home D covers the cost of showing A, B and C. Theory being that you wouldn’t know that you wanted D until you examined A, B and C first. Part of what led you to the conclusion to buy D was knowing what you didn’t like about A, B and C. So the “chain of events” leading you to the decision to buy D included seeing A, B and C.
It’s a bit complex, but you can’t just drive off on a test drive in a car or walk around in someone’s home without there being an agreement in place to pay the person who assists you. That payment is pre-arranged with the seller of the car/home.
Every seller in the mls has to agree to pay the many someones who show all the homes. The last seller in the string pays for the service that included other people’s homes. The payment is for the process so that you can explore and all sellers agree to the payment before you can access any of the homes.
I can’t take each of your examples, but let’s look at “getting quotes” from movers. The person who gives you the quote is getting paid. If you don’t use that mover, then the cost of the service to you for the time they spent giving you a quote, is paid by the people who do use their service.
Nothing is free.
I think I understand what you are saying, but let me get your opinion on my situation. About 2 months ago, I found a house for sale that I’m in love with. I contacted the listing agent to see if we could set up a time to view the house. She has given me the run around for 2 months (i.e.: not showing up for appointments, not returning calls or texts, etc.)
Can I contact a different realtor and have them help me instead?
Not sure why you would contact the Agent for the Seller (Listing Agent). You need to hire your own agent who will have access to the viewing instructions. I don’t know what State you are in, but in most States there is no reason why you would be obligated to use the Seller’s Agent, and many agents who are already hired by the seller to represent them, won’t deal directly with any buyers of the home.