Cohousing-L Mailing List: Re: Re: Re: Re: affordable housing

[Harry Pasternak (Harry_Pasternak]

Rowena

There is a distinction between a broker and an agent. The real estate agent
sells a home or land and receives a percentage of the selling price--the more
the home or land sells for--the more money the agent makes--therefore, there
is no motivation to be pro-active in negotiating the price downwards; but,
all kinds of motivation to keep the price high--a definite conflict of
interest prevails here. 

So it is counter-productive for anyone wanting to buy land to hire a real
estate agent--its like hiring someone's else's lawyer when a business
contract has to be hammered out--no one would ever do that--they would hire
their own lawyer.  

However, there are brokers who act on behalf of the buyer--and only the
buyer. These brokers never act on behalf for someone who wishes to sell land
or a home. The broker works on a set fee (that has nothing to do with the
selling price)--which is negotiated before the broker starts to work--the
broker wants to be referred to other future clients, and as well "gets off"
by doing "the deal" on the land--and will be pro-active in driving the price
down. They have the necessary "trade skills". So again, the broker does not
make more money. The brokers also know what land is available, which sellers
are strapped for cash, where  properties are for "power of attorney
sales"-where land can be bought at 50 percent less than the asking price.

In a similar fashion, there are brokers who specialize in buying automobiles
for their clients--they work for a set fee. Personally, I know people who
hired a car broker after they (the buyer) negotiated the lowest price in the
"normal car buying game". In ever case, the broker bought the desired car for
at least $2000 less than the lowest price obtained previously by the buyer.
Brokers are now available for buying building materials, as well as other
goods and services (such as hotel rooms).

There have been several articles in Consumer Reports magazine on the
advantages of using "set fee" brokers for buying real estate.

Harry Pasternak
T.I.I.