Buyers FAQ
Buyer FAQ's
What is your Broker Direct Buyers Advantage program?
The Broker Direct Buyer Advantage Program connects Buyer’s directly with Michael Pacaud, the licensed Broker of Record and Realtor, who will personally facilitate the home buying process and transaction from beginning to end. Broker Direct buyers save Thousands of Dollars vs the Traditional Real Estate Sales Agent/Broker average 2.5% commission model.
Who is Expert Real Estate Services?
Expert Home Loan and Real Estate Services, Inc., is a full service Real Estate Brokerage offering wholesale Real Estate listing, purchase, financing and management consultation services in Southern California. Michael Pacaud is the founding President, licensed Broker of Record, Primary Consultant and Realtor since 2007.
Who is Michael Pacaud, California licensed Real Estate Broker, Orange, California?
Real Estate Career: Michael has been in the real estate and finance industry since the mid-1980s. He worked extensively in consumer credit lending, mortgage banking and loan underwriting before becoming a licensed real estate broker in 2007.
Michael offers full service wholesale Real Estate Brokerage services including listing, purchase, financing and management consultation throughout Southern California.
Specialties and expertise: As a Real Estate Broker and Wealth Advisor, Michael helps home seller's and buyer's achieve financial security by educating, guiding and helping them to build significant net worth and ultimately Retire Without Saving by taking Advantage of the 5 (Unfair) Economic Advantages of owning Real Estate starting with the very first home purchase.
Are Michael and Expert Home Loan and Real Estate licensed by the state of California?
Yes, Michael's Broker license number is 01801084. The license number for Expert Home Loan and Real Estate Services Inc. is 01817635.
What are the 5 Unfair Economic Advantages of Real Estate?
Click on the Home Buyers tab at the top of the page and then the Retire Without Saving tab for a complete explanation.
What is the difference between a “Discount Broker” and the “Traditional Broker” Full Service Brokerage models?
Traditional Real Estate Brokerages typically have many Real Estate Agents or “Realtors” working as 1099 contractors for the Brokerage having written contracts with each agent splitting the commission fees charged to the seller or buyer. This Traditional model comes with many overhead costs such as rent, utilities and insurance that increases the Brokers overhead and in turn the minimum commission rate Broker’s require their agents to negotiate with Sellers and Buyers.
By taking advantage of our Broker Direct Buyer Advantage Full Service representation and working directly with the Broker, Buyer's can receive the same or better full standard services that a Traditional full-service real estate agent provides for less, due to lower overhead costs and by eliminating a 1099 commissioned real estate sales agent.
What is a Flat Fee Real Estate Service Brokerage?
When a Real estate agent or Broker charges a flat fee instead of a percentage of the sales price as commission. The Broker Direct Buyer Advantage Program offers buyers the a choice of either a low Flat Fee or 1% price commission depending on the Buyers price point and needs.
What is a Flat Fee Buyers Agent?
A flat fee buyers agent is a real estate agent who charges a fixed fee for their services instead of a percentage-based commission. This can be beneficial for buyers as it often results in lower overall costs compared to traditional commission-based agents.
Here's how it typically works:
Fixed Fee: The buyer pays a set amount, which can vary but is usually around $9,999.
Rebates: Some flat fee buyers agents offer rebates, which means the buyer gets back a portion of the buyer's agent commission.
Services: Despite the lower cost, the agent still provides full support, including helping with property searches, negotiations, property investigations and navigating the closing process
What is the difference between a Real Estate Broker and a Real Estate Agent?
The primary difference between a Real Estate Broker and a Real Estate Agent lies in their levels of education, licensing, and responsibility. Here’s a breakdown:
Real Estate Agent
Education and Licensing: A real estate agent has completed the required coursework and passed a state licensing exam to become a licensed salesperson.
Role: They assist clients in buying, selling, and renting properties. However, they must work under the supervision of a licensed real estate broker.
Responsibilities: Agents carry out day-to-day tasks like showing properties, drafting offers, and negotiating deals.
Real Estate Broker
Experience: The California Department of Real Estate requires that before applying for a Broker’s License, the applicant to have a Real Estate Agent license in good standing for 3+ years.
Education and Licensing: A broker has taken additional coursework and passed a more comprehensive licensing exam compared to an agent. This higher level of education and examination allows brokers to operate independently.
Role: Brokers can perform all the tasks of a real estate agent but also have the authority to open their own real estate brokerage and hire agents to work under them.
Responsibilities: In addition to assisting clients, brokers manage their brokerage, oversee the work of agents, ensure legal compliance, and handle more complex transactions.
Hierarchical Structure
Brokerage: A brokerage is a firm owned and managed by a licensed broker. Within this structure, you typically find real estate agents working under the broker's supervision.
Management: Brokers often take on managerial roles, providing support and guidance to agents within their brokerage. Some Brokers choose to work directly with clients or may partner with other Brokers as Associates.
In summary, while both brokers and agents play vital roles in the real estate market however, brokers have more education, greater responsibility, and the ability to operate independently or manage their own brokerage.
Does using a Discount Broker mean sacrificing Quality and Expertise to cut cost?
Despite offering lower fees, Michael maintains high service standards and works diligently to ensure a smooth transaction process. Multiple Home Buyer client 5 Star reviews on Zillow attest to the high quality of service consistently provided by Michael.
How do real estate commissions work?
Real estate commissions are negotiable between the listing agent and their client. Many charge certain percentages of their sales prices, where some list a home for flat fees. Historically real estate brokerages share and offered commission sharing with other brokerage companies. Real estate agents have agreements with their brokerage companies about how much of their earned commissions they share with their brokerages. In many cases their brokerage will have a minimum commission requirement and reduce the agents split if the negotiated commission is below the brokerage set minimum requirement to discourage Agents from offering Home Buyer's a lower commission rate. Effective August 2024, a Listing agent/broker can only negotiate the Listing agent/broker compensation with the seller. Any commission requests for the Buyer's Agent/Broker compensation must be presented in writing with the Buyer's purchase offer as a seller concession to the buyer and is 100% negotiable.
Why did the Federal laws change regarding negotiation of seller and buyer agent commissions in 2024?
Lawsuits alleged that the structure helped Agents and Brokers to keep home seller commission fees higher than they would be otherwise. It also meant a seller had to pay the agent representing the buyer side of the deal, a practice many observers thought was inappropriate. The fact is that commission rates have ALWAYS been negotiable, however, as of August 2024 the buyer’s broker commission can no longer be negotiated at the time a listing contract is signed. Any commission paid to a buyer’s agent/broker must be negotiated as a Seller concession to the Buyer at the time the buyer presents a written offer.
How do new 2024 real estate sales commission laws affect home buyers and sellers?
The new real estate sales commission laws of 2024 have made some of significant impacts on home buyers and sellers.
The Listing Agent/Broker No Longer negotiates the amount of commission to be offered to Pay the Buyer’s Agent/Broker. Traditionally, the listing agent’s agreement with the Seller was to pay 5-6% of the sale price with the total amount split between the Listing Agent/Broker and the Buyer's Agent/Broker. With the new rules, sellers are no longer mandated to pay the buyer’s agent’s commission, although they might still opt to do so to stay competitive.
Buyers, meanwhile, will be required to sign an agreement with their own broker before starting to view homes. The buyer and the agent must agree, and put in writing, how much the agent can expect to receive from the buyer.
Prior to August 2024, commission offers were posted by the Listing Agent/Broker on the MLS (Multiple Listing Service). This is no longer allowed. Now, buyers need to discuss and negotiate for the Seller's to give a credit to the buyers at closing to pay the buyer agent/broker commission on top of any requests for credit towards closing costs or repairs. The Buyers agent will assist with the negotiation of any Seller Concessions to the buyer.
These changes are intended to provide greater transparency and fainess in how much buyers and sellers pay in commission fees but whether that actually happens is yet to be determined.
How do new 2024 real estate sales commission laws affect home buyers?
The new 2024 real estate sales commission laws have introduced significant changes that impact home buyers. Here are some key points:
1. Increased Transparency: Buyers now have a clearer understanding of agent fees as they must negotiate and agree on their agent's compensation upfront. This means buyers know exactly what they will pay their agent, promoting transparency.
2. Potential Cost Savings: Sellers are no longer required to offer commissions to buyer agents, which can lead to lower overall transaction costs. Buyers might benefit from reduced commission rates or negotiate different fee structures, such as flat fees or hourly rates.
3. More Involvement Required: Buyers need to be more proactive in negotiating their agent's fees before starting the home search process. This requires buyers to be more involved in the financial aspects of the transaction.
4. Potential Impact on Representation: There is a concern that buyers might lose representation if they have to pay agents directly, as some buyers may opt to forego agent services to save money. This could lead to fewer buyers having professional representation during the home-buying process.
5. Market Adjustments: The real estate market is still adjusting to these changes, and it may take time to see the full impact. Buyers and sellers will need to navigate this new landscape, balancing the interests of consumers and real estate professionals.
Overall, these changes aim to create a more competitive and transparent market, but they also introduce new complexities that buyers need to be aware of.
How much commission do real estate agents actually get paid?
This is where things get tricky. Real estate commissions are always paid directly to the agent’s Real Estate Broker. Every real estate agent has a written agreement with their Broker that breaks down how much the agent will receive out of the total commission, also known as a commission split. Some brokerage companies split the commission 50%/50% with their agents. Some agents receive 60%, and their broker gets 40%. Sometimes, the agent’s split can be 70%/30% or even 80%/20% between them and their companies. For new or low volume agents the Broker often keeps as much as 50% of the commission. In addition to the split, there are other administrative fees charged for items such as: Desk fees, E&O insurance, file audits, Transaction Coordination, marketing, etc. These variables will impact the bottom line amount of commission the sales agent receives after any split and deductions are taken from the gross amount of commission received by the Broker.
Why don't you charge 2-3% to Home Buyers like other agents?
Michael believes in providing value to his clients. By going Broker Direct you not only get the benefits of lower overhead and no middleman agents but you have access directly to Michael’s 40 years of Real Estate sales, investing and lending experience. Orange County home prices have increased 67% in the past 10 years but Realtors are not doing 67% more work to help home buyers find and purchase a home. Additionally, beginning in August 2024, new laws took the burden of paying the buyer agent/broker commission off the Seller and put it on the buyer. Based on an $850,000 purchase with a 2.5% buyer agent commission, the buyer's would have to come up with an extra $21,250 for the buyer agent/broker fee. Compare this to the Broker Direct Buyer Advantage model that only requires the buyer to come up with either $6,000 or $8,500 depending on the service level the buyer chooses saving the buyer at least $12,750.
How are you profitable charging so much less that other agents?
In 2019 & 2020, COVID 19 changed the workplace environment for many industries including the real estate sales industry. Michael, as a Broker Realtor, works from his home office in the city of Orange and does not waste money on brick and mortar offices or other unnecessary things. If it isn't required to do business, does not make him more efficient or help clients to sell faster for more, he doesn't waste money on it!
Why should I hire/pay for a Realtor/Agent/Broker to help me buy a house?
For most American’s, a home purchase is the biggest financial commitment they make in their lifetimes whether it’s their first, second or last purchase. Experienced Realtors provide many critical services to buyers Here are some of the key services they offer:
1. Market Knowledge: Realtors have extensive knowledge of the local market, including current listings, market trends, and neighborhood insights. This helps buyers make informed decisions.
2. Protection: A realtor's primary duty is to represent your best interests. They work to protect you from potential property pitfalls and ensure that the transaction is fair and transparent. While there is a cost associated with hiring a realtor, their expertise, resources, and support can significantly enhance your home-buying experience and potentially save you money in the long run.
3. Price Guidance: Realtors assist buyers in determining a fair offer price based on market analysis, ensuring buyers don't overpay for a property.
4. Negotiation Skills: They represent buyers in negotiations with sellers to get the best possible price and terms, leveraging their experience and knowledge.
5. Legal and Contractual Guidance: Realtors guide you through the complex legal and contractual aspects of buying a home, ensuring you understand the terms and conditions and that all paperwork is completed accurately.
6. Coordination of Inspections and Appraisals: They coordinate home inspections and appraisals, ensuring these processes are completed timely and effectively, and help buyers understand the results.
7. Property Condition: Much of Orange County was built between the 1940’s up through the 2000’s but, since 2008, we live in a era of Fix and Flip, seller deferred maintenance, divorce or distressed sale properties that may affect the property value and if your agent is experienced and honest, will point them out to you and guide you on
8. Transaction Management: Realtors handle the paperwork and track important deadlines throughout the process, ensuring all requirements are met for a successful closing.
9. Professional Network: Realtors have a network of trusted professionals, including mortgage brokers, home inspectors, contractors, and attorneys, which can be invaluable during the home-buying process.
10. Time Savings: House hunting, managing paperwork, and coordinating various aspects of the transaction can be time-consuming. Realtors take care of these tasks, saving you valuable time and reducing stress.
Is Fudiciary responsibility and full disclosure a concern if I use the Listing A gent to represent both the Seller and me when buying a house?
Yes, fiduciary responsibility is a significant concern when using the listing agent to represent you in a dual agency situation in California. In a dual agency, the agent owes fiduciary duties to both the buyer and the seller, which can create a conflict of interest.
Key Points to Consider:
Divided Loyalty: The agent must balance their duties to both parties, which can make it challenging to advocate fully for either side.
Confidentiality: The agent cannot disclose confidential information about one party to the other without explicit consent.
Disclosure Requirements: The agent must disclose all material facts about the property and the transaction that could affect the buyer's decision.
Legal Obligations: Recent court rulings, such as Horiike v. Coldwell Banker, have emphasized that dual agents owe fiduciary duties to both parties and must take steps to learn and disclose material information.
Limited Advocacy: The agent may not be able to advocate fully for either party's best interests, as they must remain neutral.
It's crucial to understand these responsibilities and discuss them with your agent to ensure you're comfortable with the arrangement. Would you like more information on how to navigate dual agency or any other aspect of the home-buying process?
Do I have to sign a Buyer Broker Agreement with a Realtor before they can show me properties?
Yes, as of August 17, 2024, you are required to sign a Buyer Broker Agreement before your agent can show you properties. This agreement outlines the services the agent will provide and how they will be compensated. It ensures transparency and sets clear expectations for both parties.
Are there any hidden fees and/or fine print?
NO. For buyers that want to locate a property under $900,000 on their own the Buyer Basic Listing Service plan offers a Flat Fee of just $6,000. For an additional $2500 buyers can opt for the Premium Flat Fee plan and Michael will coordinate and attend all home viewings. 100% transparency. Please see the Broker Direct Buyer Services chart for details.
I want to move forward, what should I do next?
Contact Michael to schedule a free, no obligation consultation.
Schedule a Phone Consultation with Michael
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