Do I really need a real estate agent to buy a house? (Dallas: attorney, new home)

[NYfaninCowboyLand]

We are still researching and planning to buy a house in the Frisco, Allen, Prosper area in the next few months. Do I really need a buyers agent when I buy a house? These days all the information I need is available on the net, except for accurate recently sold prices. Do real estate agents have access to the selling prices of recently sold homes through MLS? Is there any other value that they provide that I am missing? 2.5% commission seems to be very high which ultimately is paid by the buyer. I know some of the agents give cash back, but they make it clear that they dont do anything for you, even a simple comp analysis.

[jennifw]

I am closing on a home today and my realtor has been incredibly valuable. She has-
ensured my offer was fair and inline with comps
assisted with inspections and subsequent negotiations for repairs
worked with title company to ensure all issues were cleared
Served as liason b/w me and sellers agent
ensured proper documentation for agreed upon repairs
enabled access to home before closing for measurements etc

Can you do it without one? Probably. Would I do it? No way

[NYfaninCowboyLand]

Thank you Jennifer. Do you think that service is worth 2.5%? For a 500K home, its 12.5K which is a lot of money. I am surprised that the agent market hasn't corrected it self.

[TexasRedneck]

IMO, agents earn their commissions - some deals are easier than others, but a GOOD one that's experienced can save you a ton of headache. I learned a long time ago that I'm my own worst enemy when dealing with something I want. They can help keep you landed and in focus, plus see things that you might well miss. Ours spotted foundation issues on a home we were looking at within minutes of walking up - issues that had been covered up by the seller. I tend to be pretty observant, but didn't notice it until she pointed it out.

[TexanByMarriage]

Absolutely a huge chunk of money. Where we live (Norway) there is no such thing as a buyers agent, and the only realtor making money on a deal is the sellers agent - and that is for all marketing, host viewings, and closing documentation. And even that is starting to go away now, as people can market online themselves, and pretty much just need the legal help with documents.

However, Dallas metroplex is massive, so as for someone moving to the city I can see benefits in having someone with local knowledge on your side, to guide you through the various areas.

[TurtleCreek80]

Originally Posted by NYfaninCowboyLand

We are still researching and planning to buy a house in the Frisco, Allen, Prosper area in the next few months. Do I really need a buyers agent when I buy a house? These days all the information I need is available on the net, except for accurate recently sold prices. Do real estate agents have access to the selling prices of recently sold homes through MLS? Is there any other value that they provide that I am missing? 2.5% commission seems to be very high which ultimately is paid by the buyer. I know some of the agents give cash back, but they make it clear that they dont do anything for you, even a simple comp analysis.

Does everyone need a realtor? No. If you're buying your 7th home in the same area and are also an attorney, you can probably get by without one.

Does someone who is brand new to the metroplex need a realtor? Or someone who only moves every 10-15 years? Heck yeah!! Your home is probably the most expensive purchase you ever make...why would you open yourself up to making potentially costly mistakes??

To answer your question, yes, realtors have access to sold comps in MLS. Good ones also have info about "coming soon" listings that aren't on the market yet. They are also able to guide you through what is "normal" in our local market - i.e., which floor plans have better resale value, what offer terms can make your offer stand out (lease backs, etc), upcoming development that may greatly impact your new home for better or worse, etc. They can help you avoid potential legal problems and if a lawsuit arises from the transaction, their broker's policy tends to cover most buyer issues. There are too many lazy realtors out there who give the business a bad rap....a great realtor is worth every penny!!

Furthermore, the commission is part of the seller's agreement with their listing agent not the buyer's agreement. The seller has typically agreed to pay 6% regardless- if there is no buyer's agent, the seller's agent gets the full 6%. In a slow market that can be negotiated down but at the $400k pp in Frisco area, it's just going to make your offer weaker than the competing offers. Unless the house is a dog and has been sitting for 6+ months (and why would you want a home that isn't selling in one of the fastest paced markets in the US?), I wouldn't plan on getting a 2.5% discount by representing yourself.

[numbersguy100]

The real issue as a buyer is that you typically aren't going to get a discount on purchase price if you go without an agent. The seller has already agreed to pay seller's agent 5-6% and that doesn't necessarily change just because the buyer doesn't use an agent who will share in the commission. Given that reality, there just isn't a ton of incentive not to use one. Conceptually though, I agree that using a buyer's agent makes no sense, as their pay goes up as you pay more for your home. Much better alignment of interests between seller and seller's agent.

[justsomeguy]

Originally Posted by numbersguy100

The real issue as a buyer is that you typically aren't going to get a discount on purchase price if you go without an agent. The seller has already agreed to pay seller's agent 5-6% and that doesn't necessarily change just because the buyer doesn't use an agent who will share in the commission. Given that reality, there just isn't a ton of incentive not to use one. Conceptually though, I agree that using a buyer's agent makes no sense, as their pay goes up as you pay more for your home. Much better alignment of interests between seller and seller's agent.

Would you ever use a dual-agent (seller's agent also represents you as buyer's agent) or is it much safer to get your own agent so that there is no conflict of interest?

[justsomeguy]

Originally Posted by NYfaninCowboyLand

We are still researching and planning to buy a house in the Frisco, Allen, Prosper area in the next few months. Do I really need a buyers agent when I buy a house? These days all the information I need is available on the net, except for accurate recently sold prices. Do real estate agents have access to the selling prices of recently sold homes through MLS? Is there any other value that they provide that I am missing? 2.5% commission seems to be very high which ultimately is paid by the buyer. I know some of the agents give cash back, but they make it clear that they dont do anything for you, even a simple comp analysis.

Here's a previous thread discussing this a little

Is the DFW real estate market cooling off?

[UnfairPark]

If you are a first time buyer or new to the area then you need one but otherwise you can get info from seller's agent, internet, county CAD website, even pull permit info on any major work done on the house, home inspection and title company. You don't need to be an attorney, real estate attorney's charge few hundred bucks to do the paperwork. Most sellers and selling agents don't care if commission is going in your pocket or your agent's pocket.

I'm not against agents, some are worth their commission and others are not. Overall, realtor commission rates are too high and not justified in my opinion.

As far as the homes sitting in the market for long, this is where you can save money. Sometimes buyer's can't see past funky paint, dated cabinets, clunky A/C, old chandeliers, ugly landscaping etc but if home is in a good neighborhood at a good location and feeds to good schools then it can be a non picky buyer's chance to get into a desireable neighborhood. of course, it's important to have a good home inspector on your side to tell if there are any big issues, which isn't the case in 80% of stale listings.