Real estate offices: how do they work?

[Trennet]

Thank you for the help everyone. But there is confusion in this thread. (SteveinBsas did touch on it best though)


Let's clarify something:
There are two types of RE agents: those representing the seller and those representing the buyer. Here, the buyer ends up paying most of the seller's agent's fee -- that's just how things work here. The buyer does NOT, however, have to hire a buyer's agent. Such buyer's agents gather listings for the buyer, often help with negotiations, and then charge their own hefty percentage.

Most posters, by failing to distinguish between seller's and buyer's agents, are making it sound like it a buyer has to have a buyer's agent; they don't, but they have to pay for the seller's agent (unless find a rare property being sold directly by the owner). This is a huge difference that is getting glossed over -- 2-4% difference in purchase price.


So . . . let me rephrase my question: are the generic real estate offices functioning strictly in a capacity of seller's agents? Is this clear cut, or do I need to beware of them trying to claim they are due an additional cut as a buyer's agent?



Steveinbsas touches on the distinction I'm looking for between sellers' and buyers' agents here:

In Argentina, the buyer pays the commission (3% or 4%) to the real estate office/agent (the ones that have the listings in the window). Some of these agents or brokers (the individuals in the real estate offices) do not charge the seller any commission but others charge 1 or 2%. Independent buyer's agents usually charge an additional 2% but I've only know one expat who actually used one.

Steve makes it sound like buyer's agents (what he calls "independent buyer's agents) are not conventionally part of the process and, therefore, I should not encounter offices trying to convince me that I owe them for such services.

 

[Sleuth]

Any of the offices you will walk into asking about properties are "sellers agents." They generally take 4% commission on the sale. The use of a "buyers agent" here is so rare, that I hadn't even heard of one before.

We found that as a general rule of thumb, you should expect to pay about 10% more than the negotiated price. This includes the 4% commission, taxes, escribano fees, etc. Make sure to get all fees listed and detailed up front.

 

[steveinbsas]

Thank you for the help everyone. But there is confusion in this thread. (SteveinBsas did touch on it best though)


Let's clarify something:
There are two types of RE agents: those representing the seller and those representing the buyer. Here, the buyer ends up paying most of the seller's agent's fee -- that's just how things work here. The buyer does NOT, however, have to hire a buyer's agent. Such buyer's agents gather listings for the buyer, often help with negotiations, and then charge their own hefty percentage.

Most posters, by failing to distinguish between seller's and buyer's agents, are making it sound like it a buyer has to have a buyer's agent; they don't, but they have to pay for the seller's agent (unless find a rare property being sold directly by the owner). This is a huge difference that is getting glossed over -- 2-4% difference in purchase price.


So . . . let me rephrase my question: are the generic real estate offices functioning strictly in a capacity of seller's agents? Is this clear cut, or do I need to beware of them trying to claim they are due an additional cut as a buyer's agent?


Steve makes it sound like buyer's agents (what he calls "independent buyer's agents) are not conventionally part of the process and, therefore, I should not encounter offices trying to convince me that I owe them for such services.

If you go into a real estate office in Buenos Aires and started talking about "buyers agents" I'll bet most of these "sellers agents" will have no idea what you are talking about. You don't need to worry about any of this unless you give them the idea that this is something they could try to charge you for.

 

[perry]

Buying a property in Buenos Aires can be a minefield with many overpriced properties available for sale and a lack of knowledge by many agents of the locations and products that they are selling.

There are buyers agents in Buenos Aires but in the main most successful realtors are sellers agents . Having good properties under exclusive agreement is the key as there is always a pool of potential clients that will be able to purchase your listing.

Remember buyers agents will normally charge you extra for their service as well as the usual commission of 4 percent when you purchase . I know of a few expats that charge up to US $ 4000 or 2 percent commission for real estate consulting when this service is completely free from most good realtors.

Remax Argentina , Tizado, Grupo Mega and many other chains have some excellent realtors that speak english and will search for properties for you for free and also have access to more listings than the usual realtor.

In regards to the comments about realtors earning the highest commissions in the world in Buenos Aires not could be further from the truth as the sellers rarely pay more than 2 percent commission. In the USA I believe it is between 4 to 6 percent for the sellers agent.

Many smaller properties the sellers pay no commission at all but a good realtor must spend his monies in advertising and promoting the property to get interested clients . It can be a expensive process and I myself have expenses of US $ 4000 per month on business expenses and half of this is on advertisements through the leading newspapers. To be successful here one must work literally over 100 hours a week and on top of that take a risk financially to move your listings. 90 percent of new hirees in Remax and most commission based realtors do not survive more than 3 months.

The real estate business in Buenos Aires is a very competitive business with literally thousands of agencies competing for the same products. To get good products is difficult for many realtors and most are lucky to have 4 exclusive listings . For this reason alone one must take advantage of the high profile realtors as they have a larger pool of properties to choose from

Good luck with your search!

 

[HenryNisental]

I just met an American couple that wants to sell a beatifull Apt in Brasil Av right across Parque Lezama , next to the Bar Britanico in San Telmo.
It has 300 meters, 170 meters covered and the rest a patio or terraza I think.
Send me a PM if interested

 

[dr__dawggy]

Buying a property in Buenos Aires can be a minefield with many overpriced properties available for sale and a lack of knowledge by many agents of the locations and products that they are selling.

There are buyers agents in Buenos Aires but in the main most successful realtors are sellers agents . Having good properties under exclusive agreement is the key as there is always a pool of potential clients that will be able to purchase your listing.

Remember buyers agents will normally charge you extra for their service as well as the usual commission of 4 percent when you purchase . I know of a few expats that charge up to US $ 4000 or 2 percent commission for real estate consulting when this service is completely free from most good realtors.

Remax Argentina , Tizado, Grupo Mega and many other chains have some excellent realtors that speak english and will search for properties for you for free and also have access to more listings than the usual realtor.

In regards to the comments about realtors earning the highest commissions in the world in Buenos Aires not could be further from the truth as the sellers rarely pay more than 2 percent commission. In the USA I believe it is between 4 to 6 percent for the sellers agent.

Many smaller properties the sellers pay no commission at all but a good realtor must spend his monies in advertising and promoting the property to get interested clients . It can be a expensive process and I myself have expenses of US $ 4000 per month on business expenses and half of this is on advertisements through the leading newspapers. To be successful here one must work literally over 100 hours a week and on top of that take a risk financially to move your listings. 90 percent of new hirees in Remax and most commission based realtors do not survive more than 3 months.

The real estate business in Buenos Aires is a very competitive business with literally thousands of agencies competing for the same products. To get good products is difficult for many realtors and most are lucky to have 4 exclusive listings . For this reason alone one must take advantage of the high profile realtors as they have a larger pool of properties to choose from

Good luck with your search!

This is a very informative post. Thank you for clarifying.

However, your comment about 2% sellers commissions in Argentina vs 4 to 6% in the US is misleading. In Argentina, the common practice is to charge the buyer an additional 4% commission beyond the 2% seller's commission. There is no additional buyer's commission in the United States. The 4 to 6% charged to the seller is the total amount of commission. If the property is sold via another agency, the listing and selling broker share the commission, usually 50-50. The net result is the same and the total amount charged in Argentina is certainly not excessive comparatively speaking but it feels excessive to buyers from the US or other countries who are unaccustomed to paying for any part of the commission, much less the majority of the fee.

The biggest frustration I have experienced in looking at property in Argentina is the lack of an online "multi-list" system that allows agents to identify and show properties listed by other agencies. Absent such a system, working with a large agency with lots of properties seems to be the best option....

 

[steveinbsas]

However, your comment about 2% sellers commissions in Argentina vs 4 to 6% in the US is misleading. In Argentina, the common practice is to charge the buyer an additional 4% commission beyond the 2% seller's commission. There is no additional buyer's commission in the United States. The 4 to 6% charged to the seller is the total amount of commission. If the property is sold via another agency, the listing and selling broker share the commission, usually 50-50.

What you are saying is true but I don't find Perry's information misleading.

Sellers in the US pay the entire commission: as much as 8% (although that is rare and that rate applied to raw land in the one instance I know about).

Here he sellers never pay more than 2% and some do not pay any commission.

The fact that two agencies might split the commission is irrelevant to the seller, but I was very happy that Perry was a ReMax agent and all of the ReMax agents from other offices could work with him.

 

[Davidglen77]

Last year I sold an apartment and I was told that I would pay 1% commission as the seller. The buyer was going to pay 5%. Since I agreed to a very quick sale (apartment sold to the 3rd person who saw it, in the 1st week it was listed), I asked if they would lower the commission to 0,5% and they did as a condition of me accepting the offer. When we were at the table signing the boleto I noticed that they passed the additional 0,5% to the buyer.

 

[dr__dawggy]

What you are saying is true but I don't find Perry's information misleading.

Sellers in the US pay the entire commission: as much as 8% (although that is rare and that rate applied to raw land in the one instance I know about).

Here he sellers never pay more than 2% and some do not pay any commission.

The fact that two agencies might split the commission is irrelevant to the seller, but I was very happy that Perry was a ReMax agent and all of the ReMax agents from other offices could work with him.

Clearly, the biggest difference is the fact that buyers pay any commission to the real estate agent/broker in Argentina. I have found that sellers here are usually willing to discount the asking price by 3 to 5% but rarely more than that. They are notorious for actually raising the price if a foreigner is interested (as I leaned from experience).

Perrry's point was that commissions are lower here than in the United States. He cited the seller's commission as evidence of this. My point was that the total commission rate in both the USA and in Argentina is roughly the same, since there is no buyer's commission in the USA...so, yes, it is misleading to say commission rates in Argentina are only 50% of the rate paid in the USA....total commissions are roughly the same in both countries....

 

[steveinbsas]

Perrry's point was that commissions are lower here than in the United States. He cited the seller's commission as evidence of this. My point was that the total commission rate in both the USA and in Argentina is roughly the same, since there is no buyer's commission in the USA...so, yes, it is misleading to say commission rates in Argentina are only 50% of the rate paid in the USA....total commissions are roughly the same in both countries....

I paid 4% buyer's commission on both of the apartments I bought in CF.