Should I get a buyers agent?

I'm about to put down an offer on a house that was foreclosed on by suntrust bank. It is only 80% done. The inside needs floors, bathrooms kitchen, electical, water, heating added. This means most of the potential buyers will either be offering cash OR they will try to get a construction loan, which I've heard are next to impossible to get. The selling agent claims that there are 3 offers on the home already.

I have a friend with a realtors license that could help me insert an escalation clause in hopes of beating out the competition. I could probably write up But I'm not sure if I should use her because then the bank will have to pay her 3% and that might hurt my chances of getting the property?

I've read conflicting reports on the internet. Some discussions seem to agree with me and say to avoid getting a buyers agents. Other sites say the buyer's agent is a freebee and I would only be cheating myself by not having their expertise.

I'm guessing the truth is somewhere in the middle. In what cases does having a buyer's agent hurt me?

Specifically in my case, where a bank is involved, does a big bank really care to try to get the listing agent to reduce thier typicall 6% comission to 3% if the buyer is not represented by a realestate agent?

Sorry to be blunt, but the commission is none of your business. If you want a deal like this, it might be a good idea to write offer through the listing agent. You'll have his attention. Just get your own attorney, your own inspections.

My 2 cents.

A buyers agent can be a good thing, but if you want this house, it might get in your way. Escalation clause would get in the way. You need to offer your highest and best if this is a hot property it will go fast. Don't waste time nickling and diming. I am assuming from your interest it is a great house at a great price.

why would escalation clause get in the way? from reading about it here in the forums it sounds like a good way to beat the competition and not overspend too much.

this was the escalation clause I found onliine please let me know if you see any things that should be changed.
ADDENDUM
ESCALATION CLAUSE OF FINAL PURCHASE PRICE

Purchase & Sale Agreement
The following is a part of the Purchase and Sale Agreement dated November 17, 2009, between
XXX Bank (“Seller”) and John Doe,(“Purchaser”)

XXX Bank hereby agrees to sell the following described real estate commonly described as 100 main Street in no where , USA.

It is agreed between the Seller and Purchaser as follows:
1.This addendum offers to have the final purchase price determined by comparing your offer to all other Purchaser’s Availability of Escalation Provision. Purchaser shall have the right to escalate their purchase price as set forth herein. In such event, Seller shall consider Purchaser's escalated purchase price in comparison to competing offers for the Lot. Purchaser understands that use of an escalation provision does not guarantee that all competing offers will be identical. Purchaser agrees not to offer more than Purchaser is willing to pay for this Lot. Purchaser further agrees that Seller and/or Seller's agent(s) may disclose the terms of Purchaser's offer to others.
2.Escalated Purchase Price. The parties agree that, if Seller has received a competing offer for this Lot with a purchase price, contingencies and other stipulations resulting in a net profit greater than Purchaser's offer, then the purchase price of Purchaser's offer shall be increased to an amount five hundred dollars ($500.00) more than the net profit of the competing offer up to a maximum escalated purchase price of $XXX,000.00. Seller will provide Purchaser with a copy of that higher third party offer as proof. Seller represents and warrants that the third party offer is bona fide. The purchaser listed in the third party offer cannot be related to the seller or listing agent or be employed by them.


Seller’s Initials_________ Purchaser's Initials__________________


3.Seller's Acceptance. Seller’s acceptance of this offer shall not be effective unless it is accompanied by a true and complete copy of any competing offer, including the escalation provision, used to increase the amount of the purchase price offered by the Purchaser herein.

____________________________________________
Purchaser:

____________________________________________
Date:

As a list agent of reo I think it is a cleaner offer if you put you H and B forth. In my opinion, the escalation clause gets in the way, but it is not my money, so use it if you really place the value of not overspending higher than the value of getting the house.

This is what I am talking about...Good luck with that. Corporate sellers do not subordinate themselves like this...just put up you highest and best offer.
.Seller's Acceptance. Seller’s acceptance of this offer shall not be effective unless it is accompanied by a true and complete copy of any competing offer, including the escalation provision, used to increase the amount of the purchase price offered by the Purchaser herein.

I would say get a buyers agent. I don't think your Addendum would mate a bit of difference. You need to go in highest and best.

It sounds like your friend is wanting you as a client even though he does not have much experience with REO's, or else he would know how to increase your chances of beating out the other bidders.

Expeirence comes with benifits. I sell many more REOs than I list. I have many buyers and deal with many REO agents. The REO agents know that I bring clean deals to the table and they close easy. I can call an agent and get an idea on how far off my clients initial offer is off.

If you have to come here to ask us about your addendum, then to me it means you do need a buyers agent.

I didn't know there were REO agents that specialized in distressed properties. How would I go about researching who is a good REO to represent me as a buyer's agent?

I havent' gotten one realestate agent to tell me what the downside of having a buyers agent is. With all the advice being so one sided it is leaves one wondering. Maybe I'll search the forums more diligently, there's got to be a good fairsided post somewhere.

There is no secret, it is a good deal. It costs you nothing, because you promise to be exclusive to the agent. In turn you get his undivided attn. The downside is you lock yourself in to one agent for the contract term of the agreement.

My other downside was you might get a better shot at the house if you let the list agent work both sides. Some REO agents give preference to their own offers, sad but true. It can be dicey, but you seem to know how to take care of yourself.

Bottom line is if you create more work for the AM and the REO broker your offer goes to the bottom of the pile or in the trash can.

I don't know who came up with this escalation crap but it is a stupid idea and some of my agents buyers are getting this junk from somewhere.

Offer highest and best and let it go.

I have to agree with Super because when I submit offers for my REOs it is online. Just price, closing date, EM, very basic terms.

There realy is no downsode to having a buyers agent? You are not paying them, but get represented. An unethical listing agent may not submit your offer, it happens. It happens with Buyer agents as well.

In general, the Listing agent is working for the seller. The Buyers agent is working for the buyer.

So if we were married and getting a divorce would you use my attorney?

It is your responsibilty to do your due diligance. I'll throw it out there and tell you I will find you an agent who can help you, but, I will collect a referal fee. The answers you have recieved though are from people in the industry, and not telling you what you want to hear.

Not only does the listing agent want to double end it but another huge reason you don't want to use them is they are motivated to get you to purchase at full price because they work for the bank.

Example if the property is listed at 100,000 which is what the BPO came in at and it sells for 98,000 then they have a 98 percent sales ratio to asking listing price. The better the listing broker performs for the bank the more listings they will receive so the bank is their client and future business and not you the buyer.

Hope it helps.

Depend on the bank, sometimes banks do not pay for intermediary. If you contact them directly bank will not pay the listing agent anyway. There is not guaranty. Tell them taht yo uhave an agent that represents you and see what they are going to say.

Tough question but I would say yes given the condition of the home. Keep in mind the listing agent's fidiciary responsibility is to the seller and I tend to think most reo agents are looking to the next deal and might not look out for your best interests.

The bank will NOT negotiate with you directly, so you must use the services of an agent, whether that be the listing agent, a transaction broker (representing neither side over the other), or a buyer's agent.

The downside of buyer's agency? It is a two-way street for the buyer AND the agent. They both have to have loyalty to each other. That means you don't get a buyer's agent if you are shopping around and calling every agent you find. THAT is the downside for the buyer. For the agent, the downside is that they have a higher level of legal responsibility to the client than to a mere customer, and they don't get paid a penny more. So now you have a straight-forward answer and can put that issue to rest!

I'm not sure what point Viktor was trying to make, but the bank has listed the property, and that means they do NOT want to deal directly with buyers. The bank usually is a corporation not even in the state where the property is located, and they NEED and want the services of an in-state broker. The bank has already committed to pay commission (REAL ESTATE 101: all of the commission is paid to the listing company, which then pays the selling company).

Now let's deal with that escalation clause CharlotteNC found on the internet. An REO seller does NOT allow customers to write their own addenda. NEVER! If they did not originate the form, the REO seller does not sign the form. That, quite simply, is not negotiable.

The REO forms and the REO process do not incorporate a way to do an escalation clause, so you are dooming your offer to failure if you try to force the issue. The seller does not care if you get the best deal possible without paying more than you have to pay. That does not serve THEIR purpose. Why, then, would they accommodate the process? The answer is that they won't.

The point is some buyers and sellers believe they have all the answers. NEXT is a very popular term in my vocabulary! LOL

Yep, Super! I totally agree.