Homebuying Questions

[Tamas]

Of course go in with an agent.

Why of course?  What are you getting for 6% of the sale price?

Commission is paid by the seller, not the purchaser.

Why would the seller a) pay for your agent and b) not add it to the sale price? 

[Valmy]

So weird to see estate agents talked about as a valued professional

I assume they are different in North America.

I've never bought so have nothing of value to offer, but one thing I know from friends and family is always insist on a full survey

So much is about negotiating the contract. A realestate agent who kicks ass has saved me so much money over the years.

Also: they are very familiar with the local builders and the local housing stock.

If they are good, of course. There are lots of them and most of them suck so that is a problem.

A survey of the property is usually a requirement isn't it? I guess I just assumed it was since the seller always provided me with one.

[Valmy]

Why would the seller a) pay for your agent and b) not add it to the sale price? 

It is part of the closing costs. Most sellers want to sell their property so...

And I don't get "add it to the sale price" as if sellers are not out to sell their property for as much as they can anyway. So what? Now they are going to really really really want to sell it for more instead of really really wanting to?

[merithyn]

So weird to see estate agents talked about as a valued professional

I assume they are different in North America.

I've never bought so have nothing of value to offer, but one thing I know from friends and family is always insist on a full survey

What Valmy said. As for the survey, a full inspection is required for the type of loan I'm getting, so that's a given.

[Tamas]

Why would the seller a) pay for your agent and b) not add it to the sale price? 

It is part of the closing costs. Most sellers want to sell their property so...

And I don't get "add it to the sale price" as if sellers are not out to sell their property for as much as they can anyway. So what? Now they are going to really really really want to sell it for more instead of really really wanting to?

Ok but it IS added to the sale price. You ARE paying for it.

[Valmy]

Ok but it IS added to the sale price. You ARE paying for it.

How? They are going to charge as much as they can anyway, and as I said I have saved many times the commission from their services. So what? Get royally fucked to save a few pennies? That kind of thinking has gotten me in so much trouble in my life. Penny-wise, pound-foolish I believe the saying goes.

Besides I probably should pay for receiving services, particularly the large amounts of time these people have put in on my behalf.

[Iormlund]

Where in Spain are you looking to buy a house?

That's opened up a little. I was looking near Barcelona - and that's still my preferred area - but I've also looked further north, up on the coast north of Madrid. But that's a second house. For later.

Market in Barcelona is just insane.

Just for fun I looked at a flat with similar characteristics to the one I'm likely buying. I had to go out one hour away from Pl. Catalunya to see ONE listing for the same price.
For something in the city proper, I'd have to shell the equivalent of $800k plus costs. And that was a single listing as well, in the most popular website.

[Grey Fox]

Why would the seller a) pay for your agent and b) not add it to the sale price? 

It is part of the closing costs. Most sellers want to sell their property so...

And I don't get "add it to the sale price" as if sellers are not out to sell their property for as much as they can anyway. So what? Now they are going to really really really want to sell it for more instead of really really wanting to?

Ok but it IS added to the sale price. You ARE paying for it.

Yes & no.

Maybe you could have bought the house for cheaper if the seller was selling without an agent. But, that's a different situation. The seller is using an agent, so you will use one too. Plus, they handle a lot of paperwork.

When I bought my house the seller paid 5% in commission to the agents; 2% to his, 3% to mine.

[merithyn]

Why would the seller a) pay for your agent and b) not add it to the sale price? 

It is part of the closing costs. Most sellers want to sell their property so...

And I don't get "add it to the sale price" as if sellers are not out to sell their property for as much as they can anyway. So what? Now they are going to really really really want to sell it for more instead of really really wanting to?

Ok but it IS added to the sale price. You ARE paying for it.

It's being paid.

The houses that I'm looking at are in the $150,000 - $200,000 range. Two of the houses I'm interested in are $169,000 & $149,000. They set those prices because that's what they think someone will pay. I wouldn't offer more than $150,000 for the first and $140,000 for the second as a first offer because that's what I think they're worth based on the state of the houses, the areas where they are, and other houses in their general vicinity.

Yes, that 6% is expected to be paid by the sellers, but it's not part of the negotiation usually. If they want to sell to me at the price that I offer, they agree to that price for the house as well as the 6% cost of my realtor and the cost of their realtor.

Say the second house accepts the offer. Now I'm getting a mortgage for $140,000 minus my down payment (say $10,000). The seller is getting $140,000 minus realtor fees of $8,400 plus whatever they agreed to with their realtor (say 4% or $5,600). So they walk away with $126,000 minus whatever they still owe on the house. (There are a lot of other fees on both sides, but in general, that's the basics.)

All of this is known. None of it is a surprise. It's the system we buy and sell houses under.

[merithyn]

Where in Spain are you looking to buy a house?

That's opened up a little. I was looking near Barcelona - and that's still my preferred area - but I've also looked further north, up on the coast north of Madrid. But that's a second house. For later.

Market in Barcelona is just insane.

Just for fun I looked at a flat with similar characteristics to the one I'm likely buying. I had to go out one hour away from Pl. Catalunya to see ONE listing for the same price.
For something in the city proper, I'd have to shell the equivalent of $800k plus costs. And that was a single listing as well, in the most popular website.

I was looking in the Mataro area. I found a few places in the right price area inland a bit. Cel says that's around a 45-minute train ride into the city, which is what my current commute is. Doesn't seem too terrible.

[Tonitrus]

So weird to see estate agents talked about as a valued professional

I assume they are different in North America.

I've never bought so have nothing of value to offer, but one thing I know from friends and family is always insist on a full survey

Yeah, I definitely noticed coming over an ingrained derision towards estate/letting agents that simply doesn't seem to exist in the US.  You get some who simply seem to be principled in avoiding any agent costs (the For Sale By Owner type), and some letting agents(property management companies to us) can have a bad reputation individually...but not on such a wide scale.

[The Minsky Moment]

So weird to see estate agents talked about as a valued professional

I assume they are different in North America.

I've never bought so have nothing of value to offer, but one thing I know from friends and family is always insist on a full survey

What Valmy said. As for the survey, a full inspection is required for the type of loan I'm getting, so that's a given.

An inspection is not the same as a survey. One looks at the condition of the property and the house/improvements; the other has to do with the precise dimensions of the land you are buying.  It's not unknown for fences to be built on wrong side of the property line, etc. You also may want to note if there are structures that are nonconforming with local zoning regs as that might affect your ability to modify or renovate (or in extreme cases might need to be taken down).

[Sheilbh]

So weird to see estate agents talked about as a valued professional

I assume they are different in North America.

I've never bought so have nothing of value to offer, but one thing I know from friends and family is always insist on a full survey

Yeah, I definitely noticed coming over an ingrained derision towards estate/letting agents that simply doesn't seem to exist in the US.  You get some who simply seem to be principled in avoiding any agent costs (the For Sale By Owner type), and some letting agents(property management companies to us) can have a bad reputation individually...but not on such a wide scale.

They're marginally above journalists, but behind such esteemed professions as bankers, CEOs and local politicians

[Syt]

So weird to see estate agents talked about as a valued professional

The industries work differently in North America and over here. In NA it's quite common to hire an agent to find you a property and who will then search the market for something fitting your need and show you the properties, looking out for your best interest.

Whereas over here, generally, you're doing the research and then have to deal with whatever agent has the listing for the property, and who will often charge you for the pleasure while mostly looking out for the seller's interest, while putting in a minimum amount of effort towards the buyer. In case of rentals, it's often just unlocking the apartment so the interested person can have a look (guided tour?Ha!), and then preparing the papers afterwards.

Anecdotal evidence suggests that landlords/sellers are generally happy with an agent's services, whereas the buyers/tenants get no service and no value from the profession.

[Sheilbh]

An inspection is not the same as a survey. One looks at the condition of the property and the house/improvements; the other has to do with the precise dimensions of the land you are buying.  It's not unknown for fences to be built on wrong side of the property line, etc. You also may want to note if there are structures that are nonconforming with local zoning regs as that might affect your ability to modify or renovate (or in extreme cases might need to be taken down).

I think here there's a level of survey that's required by the bank, but you can get a more extensive survey - and I know a few family and friends who've had unexpected discoveries that eventually caused them to pull out. So I've just always been advised get the most in-deptch survey you can even if it's going beyond what the bank needs.

I think here with that sort of thing you'd get some form of indemnity insurance and there are long chains of indemnity insurance because it offers protection when you're selling on. Not sure who would spot those issues though - possibly solicitors.

Edit: Actually thinking back to my mandatory conveyancing course in law school, there's loads of different types of indemnity insurance you might get depending on any issues with the property and you all have to pass it on.