I am going to devote some space to this subject because it has come up again a couple of times recently when I have been speaking with potential buyers. There are quite a few misconceptions among the general public about real estate agents-specifically why the consumer as a buyer, needs one.
1) I can't afford to pay an agent.
That's okay-you don't have to pay your agent. When a seller enters a listing into the multiple listing service in their area they have a contract with the listing company in which the seller agrees to compensate all agents involved in the transaction. So you, as the buyer, don't have to foot the bill. The money for your agent will come out of proceeds from the sale.
2) Well, if the seller pays my agent-doesn't my agent owe him/them something?
The only thing that your agent owes your seller is to be honest during the transaction. The payment is made for bringing a ready, willing, and able buyer to the closing table. What you as the buyer want to do is employ the services of an Accredited Buyer's Agent-a real estate agent who has gone through specific training as a negotiator to be sure your interests are represented in the transaction. They will not be negotiating on behalf of the seller.
3) Won't I get a better deal if I work with the seller directly? Maybe find a for sale by owner property?
Let's think about this for a moment. If I am a seller and my house is worth "X" amount of money, do I mark it up when I employ the services of a real estate agent? No. A house is worth what it is worth. Sellers put their homes on the market for what they are worth. Is a seller going to discount their house and give you the savings by not using a real estate agent? Maybe. Or are they going to keep that money for their own bottom line? What do you think?
4) Buying a house can't be that hard can it?
Well, kinda, sorta, yeah it can. Not that every transaction is difficult, but there are enough that are difficult that it keeps real estate agents, whole house inspectors, etc. in business. Most real estate transactions run into a problem or two before closing at a minimum. Many times neither the buyer or seller know about it because the agents involved have the skill to solve the problem and not upset the buyer or seller.
Do you feel comfortable negotiating the best price for a home you are interested in? Do you know what a reasonable price for the home is? Have you researched the area to know what issues may impact the neighborhood? (Such as a major highway being built close buy or commercial zoning going in down the street?) Do you know how to put a purchase agreement together and negotiate any seller assistance on closing costs? Do you know what type of loan you are using for your financing, how to work through a whole house inspection where repairs are indicated, and what you can reasonably expect the seller to repair? Do you know what to do if the title work comes back with some issues such as tax liens on it? What about a low appraisal? How do you handle that? Do you know how tax pro-rations work in your state and what effect they may or may not have on your closing costs? Do you know how to withdraw from the offer and what constitutes grounds for withdrawal and how to get your earnest money back? If you don't know the answers to these questions-that's okay. Most people not only don't know the answers, because they have lives that take their time and attention and don't have the inclination to study real estate law. Which is why you need the services of someone who has made that a career. I like to say that I could probably comprehend and perform the mechanics of pulling a tooth. However, even so, I would prefer that my dentist who has experience in teeth pulling and the education to back it up do the job.
It is true that we live in a do-it-yourself country. It is also true that I have spent many hours trying to untangle problems when people practice do-it-yourself real estate. Sometimes you get lucky and sometimes you don't. A good buyer's agent is worth their weight in gold. Statistics have born out that people who use buyer's agents get a better price on their homes than those who choose to do it themselves. Your home is the largest financial investment that most people ever make. Do you want to leave that up to an amateur?
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