Is a buyers agent necessary? (how much, lawyer, homes)

[DanFromSoDak]

Spincycle - Perhaps 6% is customary. My numbers are for example, and I'm not exactly sure what it is around here. I think you are correct, though.

2bindenver - I won't go through that entire list, but many of those examples are clearly just in there to make the list longer. For instance, why do I need an agent doing walk-through with me? Unless I'm a complete idiot, it should be fairly easy to look around the property and establish that it is or is not in the same condition as when I made the offer. In general, I'd say the answer to all of your questions on that list is, "Me". If I'm acting as my own agent, I can handle taking care of all that.

As an agent, you clearly have some incentive to make real estate transactions appear to be much more complicated than they really are. I agree that the vast majority of people are pretty dumb, and probably shouldn't be going into a transaction without an agent. However, if you're fairly intelligent and have researched the subject thoroughly (as the OP clearly has), acting as your own agent is an easy way to save a substantial amount of money.

Think about it this way: Getting a real estate license doesn't require any formal education (ie - a degree from a college or university). There are high school drop-outs working as real estate agents in this country. If you're an educated individual, do you really think that bit of how-to-be-a-real-estate-agent training your agent received makes them substantially more adept at the process than you?

[2bindenver]

I actually do have a degree and more than:

48 Hours in Real Estate Law
and Practice
48 Hours in Colorado Contracts and Regulations
8 Hours in Trust Accounts and
Record Keeping
8 Hours in Current Legal Issues
24 Hours in Real Estate Closings
32 Hours in Practical Applications
• Pass entire broker exam (state & fed)

I have been licensed for 19 years now, passed the salesman's test in 1989 and the brokers test in 1994.

I didn't make any "fluff" statements. I believe those to be the minimum needed/necessary - to do for a buyers agent.

ps you are not going to get into any of my listings without a broker in tow. If my sellers thought you were there by yourself, they'd be very angry and I'd loose my license.

[cashmannsdq]

I cannot comment as to the Colorado specifics. The commission is flexible here in Tennessee - no set commission and I have seen 7% many times.

As for your question - 'Is a buyers agent necessary?' I would say absolutely! If the home is listed by an agent - that agent has a fudiciary responsibility to the seller - in other words he or she is working for the seller. While many states (Tennessee included) allow for the agent to serve as a 'dual' agent for both the buyer and seller, it is not seen in a good light.

An agent working for you is going to take care of YOUR best interests. Going to facilitate the inspection process, the appraisal process, the paperwork, etc. To say you do not pay for the buyers agent representation is true to a point - it is a split of the commission and it is paid by the seller to the listing agent's brokerage and then split.

Regardless of that - the point I would like to drive home is that while you may have done much of the research, and should be applauded - find a good agent who has the experience, knows the area, and will work for YOU and your family to ensure that your experience is a pleasant and smooth one.

I wish you the best.

[2bindenver]

If I found a house, do I need a realtor to make offer ?

[RonAriba]

Originally Posted by 2bindenver

who writes this offer of yours?
who orders/reviews the O&E report
who reviews your GFE?
who sits at the property during the inspection?
who discusses your options after the inspection?
who discusses appraisal issues with you?
who helps you when your financing gets hung up?
who does your walkthrough with you?
who helps you at the closing table if issues come?

I assume you provide this service for every property regardless of listing price? How can you justify $60,000 in total commissions on a $1,000,000 house but only charge $6,000 in total commissions on a $100,000 house for basically the same services. Certainly selling or listing a $1,000,000 home is not 10 times the work! Why is there not a fixed dollar amount to sell or buy a property regardless of the price?. JMHO

[trecke]

As a local home inspector I hear this a lot, "Why would I pay you for something I can do myself..." Sure people can crawl up in their attic or pop the cover off their main electrical panel - what they cannot do is consistent defect recognition, improper installation techniques, gross safety/code violations, anticipated life expectancies, and the list goes on. It isn't about the price of the paint and the canvas, rather the experience, training, the ability to keep things in context, and attention to detail.

Why am I bringing this up in this particular thread? To expect to perform a thorough inspection by yourself on a large financial investment is neither cost effective or a wise use of your time (and all to save $300 or $400 is crazy). I see real estate agents getting static all the time for a service they provide. All it takes is trying to do things by yourself once, get burned, and you learn the hard way.

I can only imagine the contractual or legal issues arising out of the transfer of a $400,000 home - contracts IMHO are a minefield: cut corners and you might get bit, leave something out and the liability rests squarely on your shoulders! Try to do an inspection on your own and the odds are you will miss something significant that could have been rectified by the seller out of their own pocket. If you don't see the value, time hopefully will open your eyes.

[2bindenver]

It takes a special broker to sell a million dollar house - these people buying and selling have people. It's networking and who you know, it's trust - it takes a long time to get anything done. There is a great deal of liability. Everyone is married to an attorney or golfs with one.

I've never done one. I focus on helping the average Joe get the best deal that is possible.

[DanFromSoDak]

Someone commented that you need an agent to "facilitate the inspection process"..."the appraisal process", etc. Again, I think that's making the process sound much more complicated than it really is. You want an inspection? Call the seller, arrange a time, then call an inspector, and hire him. Done. Same for appraisal. This is not rocket science.

An inspector also commented on how people try to cut corners by doing inspections themselves. Let me ask you this, though - what kind of training does it take to be a home inspector? This is community college-level education, AT BEST. If you're a decent handyman, or happen to be educated in a technical field like engineering or architecture or something, I'm sure you possess at least as much ability to perform a home inspection. The overwhelming majority of defects are not difficult to notice, and those which are difficult to notice are probably hidden behind walls or not something any inspector would be able to see.

While I don't doubt that real estate agents are useful in many situations, I just want to point out that we shouldn't depend on them heavily as through they were a professional (like a doctor or a lawyer). Real-estate-agent training is not comperable to formal higher education. While there are some agents with degrees, many do not have anything beyond industry-specific training. Even professions which we don't usually associate with tremendously high levels of education (such as teachers or electricians or plumbers or nurses) are better educated than real estate agents. So I guess my point is: You should always watch out for yourself, and not rely on anyone (even a real estate agent) to take care of you. And if you're going to do that, why bother with a buyer's agent at all?

[sunny57]

Originally Posted by RonAriba

I assume you provide this service for every property regardless of listing price? How can you justify $60,000 in total commissions on a $1,000,000 house but only charge $6,000 in total commissions on a $100,000 house for basically the same services. Certainly selling or listing a $1,000,000 home is not 10 times the work! Why is there not a fixed dollar amount to sell or buy a property regardless of the price?. JMHO

ok... let's talk cars, as most of us have sold a few in our day. If I had a Bentley I wanted to sell...I would expect to spend considerably more on the marketing/advertising of it ....than I would on a Hundai. Running that ad on Craigs list wouldn't hit my target market.

You are reaching out to a select pool.... it's not just about the amount of work/services involved ... but also, the cost of the marketing. Running that high gloss, color ad in trade magazines carries a great cost than being solely entered into MLS. When listing agents have to accompany all buyer agents vs the buyers agent showing unaccompanied. The aerial shots vs traditional ground shots. Not to sound too "snotty" but, the elite buyers & seller have a different standard of expectation and are willing to pay for it.

The short of it ... Realtors/Agents/Brokers have got to do better than just break even... in order to stay in business. We're upside down on every listing or buyers agency we enter into until it closes....sometime it never does . There is always the element of risk.... I guess that's why commission structures are the way they are....Sunny

[mczabe]

Wow, you all are a free wheeling bunch here in CO!

First, no attorneys, now, no representation at all...and some suggesting do-it-yourself inspections as well.

As for attorneys, suit thy self.

As for buyer's agent, since it is probably unlikely that you are going to get a seller to hand over the 2.8% a buyer's agent would have gotten to you, why on earth would you chose to take on all the extra work of organizing all the steps to home ownership, when you can have someone do all the legwork for you? Hey, if it floats your boat, go for it. Just seems like an odd choice to me - again, since it is unlikely to have any financial benefit for you. Of course, look out for yourself, but an extra set of educated eyes never hurts.

As for inspections, it's true that many inspectors aren't worth their weight in salt...BUT that is not the same thing as not needing an inspector at all. What you need to do is find an expert inspector who has a strong background in building. Those inspectors are worth their weight in gold...and I am truly tickled that people would be willing to take this on themselves. In our most recent transaction, the inspector id'd several major concerns that would be very difficult for the untrained eye to detect.

I think it's a bit reckless to encourage "average joes" to go without a professional inspection.