August 17, 2012

99,750 Reasons Your Agent Might Now Be Bullish On One Rincon Hill

If your agent has suddenly become bullish on One Rincon Hill unit #2904, a plugged-in tipster notes there might be more than one reason why:

One Rincon Hill #2904 Sales Office Email

According to an email sent to agents yesterday, the One Rincon Hill sales office is now offering a 5 percent commission to the "buyer’s agent" who sells the 1,947 square foot three-bedroom unit. Now priced at $1,995,000, to quote the email titled "Five Percent + This Home= One Huge Payday!": Sell this home and earn $99,750 in one deal!

The same sized unit one floor above, 425 1st Street #3004, resold for $1,700,000 in March 2011 having originally sold for $2,019,000 in September 2008, down 15.8 percent.

As plugged-in people know and knew, back in 2009 the One Rincon Hill sales office was offering 20 percent discounts on unsold units and a 4 percent commission to agents.

Non-Secret At One Rincon Hill: "Over 20% Off" And 4% Commissions [SocketSite]

First Published: August 17, 2012 3:00 PM

Comments from "Plugged In" Readers

thanks for the post editor.
let's hope that any potential buyer is aware of this.
i would personally fire any agent who i have been working with who suddenly started touting this property.

Posted by: snider at August 17, 2012 3:43 PM

I'd imagine that you could pick up 5204 for $2m, they've been trying to sell for almost a year at 2,350k:

http://www.redfin.com/CA/San-Francisco/425-1st-St-94105/unit-5204/home/17304544

Can't believe that the 5204 sellers paid almost $3m back in 2008.

Posted by: El Bombero at August 17, 2012 3:52 PM

That's odd. You usually see these sorts of offers when the market is at or just past its exact peak.

When prices are rising, the sellers just wait it out. When they see demand drying up, well, they do this.

Interesting.

Posted by: tipster at August 17, 2012 4:04 PM

I have never represented myself when selling real estate and I have always had a 4% fee to the selling agent and a 2% fee to the listing agent.

When you have an above average fee to the selling agent every agent with a client that can possibly buy your property will try and get them them to buy it...

Posted by: FormerAptBroker at August 17, 2012 5:36 PM

Well, if you're as anti-real estate agent as I am and really, really want this unit for whatever reason, tell the sellers to knock $99,750 off the sales price. Buyers don't need an agent. It's often much easier to negotiate deals without one . . . from personal experience. :)

Posted by: Ugh at August 17, 2012 7:14 PM

I'm an agent in San Francisco. You feature my listings on here maybe four or five times a year. I'm a top 20 agent in the City. I have never posted here before.

This particular type of property is not what I typically represent. With that said, if you want to be successful in this city you learn one thing - your clients are probably smarter than you. That doesn't mean they're more knowledgeable, or experienced, or well versed in the intricacies of San Francisco real estate, but it does mean they can calculate a commission figure on their estimated settlement statement and notice your fee has somehow been doubled from the norm.

You try that bullshit in this city and you'll get crushed. The obvious course of action here is apply that extra $49,875 to a reduction in purchase price. While I'm not a fan of this type of blatant appeal to greed, I think what One Rincon is really offering is an extra bargaining chip for a buyer's agents.

And lastly, because it's mentioned on this site ad nauseam, if you're "anti-real estate agent", if you think they're all idiots, if you see no value in them - feel free not to use us. My clients tend to work - about 14 hours a day. Most people buying property in this City do. If you have time to search, market, tour, self educate, schedule inspectors, manage loan officers, navigate the 500+ items that will destroy a deal, negotiate, handhold, and clean up the dog pee on the rug ten minutes prior to your fourteenth open house - by all means go ahead. I'm completely serious, you should do it. It's not rocket science, but it is one of the most all consuming jobs out there.

Posted by: Anonymous-Agent at August 18, 2012 12:24 AM

"The obvious course of action here is apply that extra $49,875 to a reduction in purchase price."

...and then of course misrepresent the actual sales price in the MLS by "forgetting" to subtract the realtor concession from the gross sales price.

Posted by: El Bombero at August 18, 2012 11:26 AM

Well...I guess anon-agent got a few things off his chest. I hear you.

But next time I'm at an open house, please be able to answer me when I ask the agent if all the remodeling was done with permits AND if the foundations were all upgraded to current seismic standards.

Thanks.

Posted by: futurist at August 18, 2012 3:43 PM

Well, one of the reasons I can't stand real estate agents is because they often come across as greedy, not that they are really interested in YOU, but they are interested in making their commission off you and not have to do anything or work very hard to get that commission.

As an example, when I was looking at properties several years ago, I did have an agent. I've actually had many agents, but that's another story. Anyway, she had shown me one or two properties. One day, I just happened to be walking around before I was to go to a Giants game. I saw an open-house sign out in front of a property, and just out of curiosity I decided to go take a look. I unexpectedly REALLY liked the property and decided to make an offer right then and there.

When she went to show me a different property in the following days, I told her I had an offer out and told her how that came about spontaneously. She asked why I didn't call her and that she was just down the street and she could have helped me. Help me with what? How to sign my name? Help to retroactively find that property for me??? I mean, really.

She got all bent out of shape and then some. She was pissed because she wouldn't be getting the commission if I got the property. And why should she? It wasn't a property that she found for me or showed me. She did NOTHING to EARN the would-be commission. So why did she think she was ENTITLED to it and why should I have had to call her? She's not entitled to represent me on property she did not find for me nor show me.

I could understand if it was a property she had previously shown me and I went behind her back and put in an offer and lied about having a broker/agent. The nerve of her. Shameless and greedy. Just like any profession, it only takes one bad apple to spoil the whole cart.

Posted by: Ugh at August 18, 2012 9:13 PM

Most of the complaints on here seem to be about buyer's agents, or as they tellingly say in the industry, the "selling agent". By contrast Anonymous-Agent's list of work involved in his/her job is chiefly is mostly that of the listing agent.

It seems to me that this difference between the work (high) and compensation (low) of the listing agent and the work (low) and compensation (high) of the selling agent is a reflection of the perverse incentives of the selling agent. The next time I'm in the market to buy I hope to find an agent who will work for a flat fee and refund to me any difference they get from the seller.

Posted by: Po Hill Jeff at August 19, 2012 8:34 AM

Yup, buyers agents don't do sh*t. They drive you around, and just forward you disclosures without even reading them. And you waive all rights to sue them, that much they would highlight in the documents you sign.

Posted by: HC at August 19, 2012 5:53 PM

Do SF buyer's agents actually drive their clients around? I've never even thought to ask and instead just did my own footwork. The only time an agent drove me to properties was when looking for rural land. He totally earned his commission, driving several hundred miles, a fair share of which was offroad.

Posted by: The Milkshake of Despair at August 20, 2012 9:36 AM

Yeah, I was never driven around by Realtors in town. Being driven around means waiting for the realtor then wasting 2 people's time in traffic or looking for parking. I do everything way faster by cycling. Plus there's a territorial issue. Any salesman knows the control of the turf is a part of a sales pitch.

I know a family that got pulled into a purchase they shouldn't have made. The main reason for that was the lady realtor had an overwhelming personality, driving the buyer wife around and drowning the buyers into a sea of words.

The wall of sound stopped at closing and the reality of the purchase took a few months to appear. Many unknowns, issues, things that were brushed off too quickly as "yes you can probably check into doing this". No real misrepresentations were told, but enthusiasm created by the relationship with the agent somehow clouded the buyer's judgement. It's a personality issue. Choosing the right Realtor is the buyer's job.

Posted by: lol at August 20, 2012 10:41 AM

I would argue a buyer's agents can be useful. On a several occasions, I've run into extremely difficult, volatile sellers. Attitudes can change suddenly mid-negotiation and psychologically it can help having someone communicate with the other party when things turn really ugly. It's just helpful to remember the buyer's agent is really not on your side. There's a commission to be made and they can be highly motivated to close the deal. As counterintuitive as it sounds, that fact can be turned into a positive for buyers. That said, I've made a mistake or two over the years, but my mistakes are my own, not the agents.

Posted by: Denis at August 20, 2012 12:05 PM

There is no cost to having a buyer agent so it makes sense to use the best one that will work for you. The best ones have inside information on non-public comps, homes not on mls; can arrange independent inspections and have constructive off the record conversations. And Denis is correct about having a 'neutral' party to manage difficult conversations.

Posted by: eddy at August 20, 2012 2:09 PM

There is no cost to having a buyer agent I can't agree with that. Presumably you mean that the agent retained by the buyer is paid out of the proceeds of the sale an amount determined by the seller, over which you have no control, so it in a sense does not "cost" you anything. Nevertheless you are paying it, and I suspect most sellers would accept a lower offer price if you lowered your agent's commission by a similar amount, leaving the net value to the seller the same.

(I should add that I do think for a buyer to retain a realtor is a good idea, but I believe the listing agents are doing more work, and that their incentives are more aligned with those of the person they represent).

Posted by: Po Hill Jeff at August 20, 2012 3:21 PM

The seller has already negotiated the fee on their contract to sell their home long before you, the buyer, will decide to make that purchase. The consumer almost always bears the burden of paying the "cost" of the transaction.

There are firms like redfin that will refund part of the fee back to you as the buyer. I'm actually surprised more people do not use a redfin agent. However, I would never use a redfin agent for all the reasons/benefits I list above. Again, you need to understand your buyer agent motivations and make decisions you are comfortable making. Your buyer agent is NOT incentivized to get you the best deal.

Posted by: eddy at August 20, 2012 5:05 PM

what a horrible horrible horrible building this is. i had friends who lived there and they absolutely hated it and couldn't wait to get out. cramped, noisy, and full of unfriendly neighbors. it seems like the building was built purely so the developer could make a quick buck and flippers could sell to the unsuspecting with photos of the view. it doesn't seem like it was ever intended for people to actually live there, let alone become their "home"

Posted by: joe_ at August 20, 2012 11:05 PM

It's harsh but I guess reality to be part of a really hated profession. I'm a buyer's agent because I really like finding properties for my clients and I do like making a pretty good living. I go visit & research the properties I send to my clients, stay within their price ranges, read every single disclosure and the Title Report of the home that my clients are thinking of purchasing and I will tell my client if they are either paying too much or if I believe the house may not be right for them. Aside from the other boring things like understanding a lot of changing legal, ethical and "common sense" issues associated with buying I actually do have integrity. I was actually showing this building to an interested buyer. When I heard about this commission increase I sent my client an email immediately and told her that I would take the increased commission off the purchase price. Not every attorney and not every used car salesperson is dishonest. And neither is every Realtor.

Posted by: SF_Buyers_Agent at August 21, 2012 12:29 PM

I had a great relationshiop with my agent when I was buying a couple years back. Business was slow for her at the time, so she was able to spend a lot of time showing me properties. She'd point out construction flaws, potential problems with certain neighborhoods, etc. I spent a year looking with a dozen offers submitted before I bought. Around nine months in, I could tell she was losing her patience. I was being very picky, and making lowball offers for properties I felt were overpriced (some of my offers were over asking when I felt they warranted it). She started encouraging me to make higher initial offers, to which I resisted. She would also try to pressure me with "prices are starting to go up" tactics. I don't think all of this pressure was because she wanted more commission, but because she just wanted my offer to get accepted so she could get paid and move on. To be fair, business was so slow for her and most agents at the time.

By the time I found my property, I was pretty much doing all the work researching, and she was merely a lock box opener.

She really is a decent person who wanted to look out for my best interest. But in the end, the conflict of interest got the best of her.

Posted by: joh at August 21, 2012 1:41 PM

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