Maybe I am getting cynical in my old age. Even so, my radar is up.
Periodically, I receive emails from rather anonymous people asking for real estate advice. If it is a question I consider to be of general interest, I post the answer here. Most times, though, I just respond directly as a courtesy (part of my routine, pro bono work).
Lately, I have begun receiving a number of fairly suspicious queries which have caused my looking-for-a-lawsuit radar to kick into gear. If it looks like a trap and smells like a trap, is it necessarily so?
The emails are always from a Gmail account, and they are never addressed to me by name. The name at the bottom never matches the name in the sender’s address, but is always some too-common male name like Jim, Bill, or Dan. The Shaquilles and Maximilians of this world have yet to ask me a darn thing. Maybe they are just smarter.
And lately they have all been related to real estate fees.
First there was this one:
How much should i pay my lawyer for closing my house? Before I go ahead, is there any pointers you might have?
Please help me.
Thank you in advance.
I bit, and I responded with some lame, “Sorry, I can’t help you. California is an escrow state” response.
Next, I received this question:
Who pays for the fees on a real estate transaction? Because of your experience I was hoping you might be able to shed some light on the subject.
Any help appreciated.
I am very grateful for your help.
Being someone who is not very good at keeping secrets, I responded briefly.
The seller in the transaction typically agrees to a total real estate fee in the listing contract with his agent. In California, the contract also specifies the portion of the total fee (usually half) that will be offered to the buyer’s agent as compensation. So, the short answer is that the fees usually come out of the seller’s side of the equation.
“Who pays” is a larger question, as many believe that since the seller is only concerned with the bottom line, the fees are imputed in the final sale price, and therefore the buyer too is effectively “paying.”
To answer your question more directly, the buyer does not usually pay out of pocket for representation; the seller does.
OK, it was the short answer, but it seemed safe enough. My response was splattered with enough “usually” and “typically” qualifiers that I felt my hiney to be sufficiently swaddled. Then, I received my most recent cry for help.
Does sellers agent with no buyers agent get full 6?
I know you are probably very busy but I was hoping you could give me a couple pointers. Any help would be appreciated.
Do these guys ever give up? And who are “these guys?” Is it a competitor trying to send me into early retirement, could it be the Department of Real Estate just making sure I am not violating the law, or is it merely a cosmic coincident that every dude with a keyboard named Dave (dudes who are named Dave, not their keyboards) is suddenly terribly interested in the topic of real estate commissions?
Whatever, the reason, I have prepared a blanket response:
Dear Agents, Department of Real Estate, Department of Justice (just in case), and all guys with first names consisting of four or fewer letters:
Real estate fees by law are negotiable.