Discuss Detroit » Archives - July 2007 » Housing bust takes big toll on Realtors « Previous Next »
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Iheartthed
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Username: Iheartthed

Post Number: 2024
Registered: 04-2006
Posted on Monday, October 29, 2007 - 3:45 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

I thought someone else would have posted this by now. In short, it's not looking good. In long, it's really not looking good.

quote:

"Thousands of Michigan real estate agents -- some with decades of experience -- are getting squeezed out of the business, casualties of one of the worst housing slumps in state history.

Agents who prospered a few years ago, when consumers' appetite for real estate seemed insatiable, now are struggling or switching careers.

Michigan agents say a lack of home buyers for the glut of houses on the market is driving them from the business. Those who do manage to move a property are realizing lower commissions as a result of dampened real estate prices."



http://detnews.com/apps/pbcs.d ll/article?AID=/20071029/BIZ/7 10290365
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Detroitnerd
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Username: Detroitnerd

Post Number: 1553
Registered: 07-2004
Posted on Monday, October 29, 2007 - 3:51 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

That's why we MUST expand water lines out to the boonies NOW!
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Jt1
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Username: Jt1

Post Number: 10609
Registered: 10-2003
Posted on Monday, October 29, 2007 - 3:55 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

That is an industry where anyone with any sense would save during the strong years so they could survive during the rough ones.

I suspect many realtors crying in their beer lived a lifestyle that was in line with the boom years with no consideration to the bust years.

It stinks that they are struggling but saving when things are good seems like a thing of the past for people that work in industries that have ups and downs.
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Thejesus
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Username: Thejesus

Post Number: 2547
Registered: 06-2006
Posted on Monday, October 29, 2007 - 4:07 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

horray! Prices were way over-valued in this area for way too long..

It's about time they came back to Earth...

As far as the realtors go, sorry if I fail to sympathize with a group of people whose pay isn't linked to their performance and who are way overpaid for the services they offer as it is...

It so ridiculous that people agree to go along with this "commission" nonsense simply because realtors tell people that is how they are supposed to be compensated
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Johnlodge
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Username: Johnlodge

Post Number: 3304
Registered: 10-2003
Posted on Monday, October 29, 2007 - 4:09 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

How about signing agents.

They get a piece of the pie to hand you papers to sign.
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Umcs
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Username: Umcs

Post Number: 341
Registered: 06-2007
Posted on Monday, October 29, 2007 - 4:31 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

I could see a commission for a Realtor "once upon a time." Back before the internet was around, it was much more difficult to obtain information about homes for sale and to sell your home. You needed the realtor to provide you those points of contact and specialized knowledge.

Now, realtors really don't offer much in the way of specialized knowledge that you can't discover on your own. They don't really provide those points of contact with buyers either. I still get a chuckle when I see the "For Sale" signs up on houses or advertisements for open houses. If I look at a house, I check it online first. If I'm interested, then I'll go look at it.

Realtors might also be better served by understanding they deal in commodities now. They are not professionals working in a profession. They are commodity brokers working in a business.
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Goose
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Username: Goose

Post Number: 50
Registered: 02-2005
Posted on Monday, October 29, 2007 - 9:03 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

i think you giving way too much credit for the general homebuying public - most are clueless when it comes to homes and real estate, from first time buyers to multiple home owners.... most for sale by owner homes are grossly overpriced, and people out trying to cut deals on homes because they "think" they are getting a good deal usually end up on the short side....

it reminds me of a realtor friend that was working with first time home buyers, moving out of a rental into their first home, well, he got a call about 2 months after the sale, they were asking who they should call to get the light bulbs changed cause 5 or 6 of them had burned out, they were used to having a landlord come and take care of their maintenance issues... good luck with these people trying to buy on their own, but i guess the poor and ignorant are the best and most ripe for taking advantage of.... from sales to loans..... (btw - you think realtors make too much money, try the mortgage loan officers... )
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Renfirst
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Username: Renfirst

Post Number: 75
Registered: 12-2006
Posted on Monday, October 29, 2007 - 9:06 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Check out http://www.redfin.com

They're changing the way you think about real estate, and have the National Association of Realtors shaking in their boots.

Had a meeting with the CEO a couple of months ago in D.C. while they were raising capital... This company is poised to change the way residential real estate is purchased and sold.

REO Agents are the only ones making some $$ right now. With all the foreclosures, they're getting paid to manage all the properties...
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Softailrider
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Username: Softailrider

Post Number: 78
Registered: 02-2007
Posted on Monday, October 29, 2007 - 9:58 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

They're not managing the two on my block very well , grass gets cut about once a month .
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Bvos
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Username: Bvos

Post Number: 2240
Registered: 10-2003
Posted on Monday, October 29, 2007 - 10:10 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Good Realtors know the market that you're selling in and know the market you're buying in (it may have to be two separate Realtors).

When we bought our first house our Realtor told us to offer $30,000 than the asking price. We thought that would piss off the seller, but they took our first offer and we got it for that price.

We're currently selling that same house and have been having a tough go of it. We've contemplated lowering it several times. After discussing it with our Realtor we decided not to since price wasn't a problem based on the data and info the Realtor was seeing.

Our Realtor has been well worth it both times. We use online tours and info in addition to our Realtor to decide which houses to tour, which to put on the maybe list, etc. If anything technology has made the Realtors job, time wise, easier since folks can screen properties ahead of time via the web.
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Ccbatson
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Username: Ccbatson

Post Number: 6185
Registered: 11-2006
Posted on Monday, October 29, 2007 - 10:25 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Actually, our area has not been grossly overvalued as some are...the hit will be less hard here than, say southern Florida.
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321brian
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Username: 321brian

Post Number: 486
Registered: 02-2006
Posted on Monday, October 29, 2007 - 10:26 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Jt1,

You could say the same about everyone in the automotive industry.

As an agent myself I can say for a fact the a ton of home buyers are clueless. All they want to look at is paint and wallpaper. Almost nobody cares about the roof, the furnace, the AC, the foundation........

If you hire a Realtor in this market and he or she sells your house. They have earned whatever commission you agreed to.

And why not work with an agent when you are buying? The seller pays anyway. The commission for the buying agent is written in to the listing agreement.

Basically a realtor works really hard on too many deals that don't go through and don't make a dime. then we get one that goes through we get paid too much. It all evens out.

I would prefer flat fees for everything from showings to closings. It would cut down on a lot of wasted time for everyone.

I'm tired of paying for advertising out of my pocket that doesn't do squat because my clients like seeing their house in the paper thinking that it is doing something that way.
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Lefty2
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Username: Lefty2

Post Number: 542
Registered: 07-2007
Posted on Monday, October 29, 2007 - 10:34 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

posted earlier this year, prices would fall 14%+ in 2007 in SE Mich. looks like it is coming true.

In the end, the commission is paid by both, (usually the buyer who buys) due to the market prices and adjustment of price accordingly.

If investing, like stocks, when the crying gets the worst, that is the time to buy.
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Johnnny5
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Username: Johnnny5

Post Number: 632
Registered: 06-2005
Posted on Monday, October 29, 2007 - 10:36 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

"As far as the realtors go, sorry if I fail to sympathize with a group of people whose pay isn't linked to their performance and who are way overpaid for the services they offer as it is..."

How is a Realtors pay not linked to their performance? Being that it's almost always a commission based business wouldn't the exact opposite be true?
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321brian
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Username: 321brian

Post Number: 487
Registered: 02-2006
Posted on Monday, October 29, 2007 - 11:14 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Lefty,

A seller who list his or her home with a realtor agrees to pay their listing broker X%. Out of that %, half usually goes to them and the other half to the selling broker. With the agents getting about 1.5% before expenses. 3% if they have already reached their cap. Somewhere around 15 or $20,000 commission earned.

So regardless of who buys the house X% is going to go to the selling broker. If someone without an agent buys it the selling broker takes it all.

As a buyer if you work with an agent or not the price will be the same if you buy a house listed with another agent.

Sure since you are paying for the house it is your money that pays the agent but it comes out of the sellers bottom line.
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Wash_man
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Username: Wash_man

Post Number: 490
Registered: 05-2006
Posted on Monday, October 29, 2007 - 11:52 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

I purchased my first home from the owner. He was in his 20's and I was in my early 30's. He had never sold a home and I had never bought one. It was a pain in the ass. Seven years later I bought a vacation home through a realtor. It was a much easier transaction. I didn't have an agent, I found the listing for the home online. When I went to look at it (three hours away)he insisted I look at others also. I had already studied them online and told them I wasn't interested. He insisted that I look at more than one and he drove me to others. That kind of ticked me off, but it was still an easy transaction.
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Professorscott
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Username: Professorscott

Post Number: 891
Registered: 12-2006
Posted on Monday, October 29, 2007 - 11:58 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

I would never consider buying or selling real estate without professional help. I'm a reasonably intelligent person (I hope), but I know little to nothing about the mine field of real estate transactions and it has never bothered me to pay the commission. I think the good ones earn what they're paid, and (like in any tough marketplace) the not so good ones are dying on the vine.

Unfortunately, in this market, some good folks are dying on the vine as well. Them's the breaks in the sales biz though. It'll come back around here as soon as we figure out how to diversify our economy like all the other big cities had to do before.
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Lefty2
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Username: Lefty2

Post Number: 547
Registered: 07-2007
Posted on Tuesday, October 30, 2007 - 12:06 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

321brian
true the commission is deducted from the sellers proceeds.
But it is the buyer who is coming up with the funds.
The seller sets the price (most times) on what they need to Net or what the market will bear. So they raise the price to cover the buyer paying the brokers commission.

It is like saying a retailer pays the sales tax to the government, but the consumer pays it to the retailer. In the end it equals out and the sales process continues.
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Renfirst
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Username: Renfirst

Post Number: 76
Registered: 12-2006
Posted on Tuesday, October 30, 2007 - 4:11 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

I think most home buyers would benefit from working with a seasoned real estate professional, especially with the abundance of foreclosures right now on the market. Could the commission scale be more realistic? Sure, but we'll be seeing some changes to that as online brokerages change how people buy and sell. Redfin charges 1% and gives back 2% to the buyer/seller...

As the mortgage industry shifts, title companies, realtors, appraisers, inspectors... they're all feeling it. And don't forget about the trades. The new construction slump has many looking for work.

That's why when I hear these so called analysts claim that the housing industry isn't that important to the overall economy I roll my eyes. The housing industry effects far more people than these guys want us to believe.
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321brian
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Username: 321brian

Post Number: 488
Registered: 02-2006
Posted on Tuesday, October 30, 2007 - 6:47 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Lefty,

House prices are rarely lower when a realtor is not used.

For sale by owners are pricing their houses in line with the ones listed by brokers.

Don't think that as a buyer you are going to save money without an agent.

On the other hand I would say that sellers should try to sell their home without and agent for at least 6 months. If they manage to sell they will see true savings.
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Jt1
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Username: Jt1

Post Number: 10616
Registered: 10-2003
Posted on Tuesday, October 30, 2007 - 8:56 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Brian - I agree on the automtive people. Any position that is based upon commission or heavily dependant upon OT/contracts should be cause for people to think about their lifestyles compared to earning during the rough times.

I guess it can really apply to everyone just some professions/industries get hit harder.
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Kevgoblu
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Username: Kevgoblu

Post Number: 22
Registered: 02-2007
Posted on Tuesday, October 30, 2007 - 10:15 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

321 - i'm not understanding why a selling agent is useful. Other than putting your home on the MLS system, I didn't see my selling agent do too much of anything. Now the buying agent does spend considerably more time with you searching for what you want in a new home. But as someone else was saying you can do so much of that yourself nowadays. Some type of consolidation in the industry is probably due. Maybe keep traditonal agents for those technologically challenged, or too lazy to do any of their own legwork and create a new type of agent, there just to grant you access to homes and review closing paperwork.
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321brian
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Username: 321brian

Post Number: 489
Registered: 02-2006
Posted on Tuesday, October 30, 2007 - 5:56 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Kev,

I know I had a typo in there but thought I said that a seller should try to sell their own home for at least 6 months before thinking about listing with an agent?

Sure a selling agent is going to list your house on the MLS. That will give it a lot more exposure than your yard sign. He or she should also advertise, hold open houses, keep you and your prejudices about the house hidden during showings.

Yes, buyers agents do a lot more leg work. Sure a lot can be seen on the net but under the current system you would be stupid not to work with an agent when buying.
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Lefty2
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Username: Lefty2

Post Number: 548
Registered: 07-2007
Posted on Tuesday, October 30, 2007 - 8:38 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

"Don't think that as a buyer you are going to save money without an agent."

I have a brokers license (don't sell now but i've been through tough times) and know that there are no absolutes when buying or selling, but, the market dictates price and terms and you can save a lot of money with some homework and time on your part. It depends on how much time and knowledge you have and if you want to deal with all the hassles. The commission IS built into the sellers price, no matter what any buyers agent says.

If I HAD to sell NOW, I would use a broker, price it Lower than other comparable houses and have the house clean as a whistle and have a lot of open houses and a loan agent to prequalify buyers at open houses.
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Ray1936
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Username: Ray1936

Post Number: 2165
Registered: 01-2005
Posted on Tuesday, October 30, 2007 - 10:49 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Always used an agent to sell my houses. The last one was a life saver when the buyer claimed a defect that didn't exist and her work saved me a lot of headaches....and probably more than a few bucks.
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321brian
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Username: 321brian

Post Number: 491
Registered: 02-2006
Posted on Wednesday, October 31, 2007 - 6:47 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

"The commission IS built into the sellers price, no matter what any buyers agent says."

I thought that's what I've been saying all along?
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Spartacus
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Username: Spartacus

Post Number: 262
Registered: 07-2005
Posted on Wednesday, October 31, 2007 - 10:25 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

"I would never consider buying or selling real estate without professional help. I'm a reasonably intelligent person (I hope), but I know little to nothing about the mine field of real estate transactions and it has never bothered me to pay the commission."

There are two issues with this line of thinking. First, you need to be careful with realtors because as the expression goes, "their actual client is the commission." I'm sure there are many scrupulous agents out there, but I can assure you that there are also some that want the deal to go through no matter what. Second, become a licensed realtor does not require you to be all that knowledgable about real estate. In my experience, dealing with real estate agents is a real crapshoot. Unfortunately, it is very rare to find a realtor who is willing to make any change of substance to a pre-printed form purchase agreement. There is a lot of pressure put on purchaser's to just go with the language as is and to not "rock the boat". Most of the time this probably won't make a difference, but it can come back to bite you.

Realtors can be useful resources and they often have valuable information about the market. If you're selling, it is also helpful to have them deal with the showings. If you're looking to be protected, from a legal standpoint, however, you should hire a real estate attorney. If you do hire an attorney, make sure you do so before the Purchase Agreement is signed, often times people come in after the deal is cut.
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Bigb
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Username: Bigb

Post Number: 5
Registered: 08-2007
Posted on Wednesday, October 31, 2007 - 11:29 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

I have had success selling my deceased grandmother's home with out the use of a seller's agent by listing it on

THEHOMEDOG.COM

Of course I opted for the MLS listing but had success as I only paid a 2% commision to the buyers agent. I agree with UMCS, when searching for a home the first place the majority of individuals look is the internet.
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Diehard
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Username: Diehard

Post Number: 179
Registered: 03-2005
Posted on Wednesday, October 31, 2007 - 4:00 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Dumb question: As a first-time homeowner who's never sold one (but hope to eventually), can I expect that a realtor will handle all the legal paperwork that goes with selling, or do you have to get a separate real estate lawyer, title company, etc. for all that?
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Sirrealone
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Username: Sirrealone

Post Number: 41
Registered: 01-2007
Posted on Wednesday, October 31, 2007 - 4:15 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

A good realtor will not only handle the business aspects, but will manage the emotions that come up. I think that this is just as important. Think about it. As a buyer or seller, you're usually talking about either your most valuable personal property, or about making the biggest purchase of your life. This makes emotions run high A realtor doesn't have those emotional bonds and should be able to help you, as a client, work through that.

I just used my realtor to sell my condo and to help us find the house we moved into. There were issues on both transactions that came up, negotiations that got tense, and on more than one occasion, I was ready to walk away or go in all out panic mode. My realtor calmed me down, set expectations, and managed the situation. He prvented me from blowing both one or both deals. There's value in that.
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Spartacus
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Username: Spartacus

Post Number: 265
Registered: 07-2005
Posted on Wednesday, October 31, 2007 - 4:42 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Diehard:

There will be a title company involved. The title company will draft all of the closing documents. Usually, the only document that the realtor will draft will be the Purchase Agreement. The title company will probably charge a closing fee on top of the premium you will pay for an Owner's Policy of Title Insurance. The closing fees can be allocated to the other party per your purchase agreement.

Generally you wouldn't deal with contacting the title company. Your realtor will handle that. The terms of the Purchase Agreement may dictate what title company will be used. Many large realtors have captive title agencies.

If you want someone to draft/review the purchase agreement who will be looking out for your interests you should consult with and attorney.
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Goose
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Username: Goose

Post Number: 51
Registered: 02-2005
Posted on Wednesday, October 31, 2007 - 7:16 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

spartacus, ive done many many closings as a real estate agent and participated in many as an investor, and you would not even begin to comprehend the number of mistakes that ALWAYS accompany the hud statements, even after seeing 100's of them they still are confusing with all the numbers, charges, accual accounting, etc etc....

a good realtor will be able to look at these documents and will find hidden charges, or BS charges that the average person would have no clue about, these charges are added by everyone from the finance companies to the city to the water departments to etc etc.....

with the experience i've had with these closing documents and the numerous mistakes i've had to have corrected, even to the point of walking from the closing, i am sure the are a lot of people being nickeled and dimed for charges they shouldn't be paying....

again, its an experienced and professional realtor that will find these items.....

(im not a realtor anymore either, so im not biased) ha ha

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