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Never assume that because a buyer is unrepresented that the commission is going to be reduced! Because unless the listing agreement specifically states this, it is not going to happen most of the time.
If a buyer thinks they are going to save money by not having professional representation they are doing themselves a great disservice.
As a listing agent, I will help an unrepresented buyer purchase my clients property at a price and terms that are to my client's advantage. I may be nice, polite, entertaining, helpful, etc-but make no mistake, I am working for my client, the seller, and not the unrepresented buyer.
As a buyers agent, I will work to help my buyer client get the best possible price and terms. And I will do much much more than just send you listings.
There's a difference between being able to do something, and being equipped with the time, knowledge, information and resources to do that same something VERY WELL.
If you can do it very well - find all the best possibile homes for you, evaluate all the different properties objectively, compare and price the properties with the best & most relevant comparable properties, negotiate the best deal, find good qualified people to deal with all the ancillary issues (an attorney, mortgage broker, inspectors, service personnel like painters, plumbers et,) follow up with all the different parties and keep the transaction on track - then don't pay someone else to do it for you, and attempt to negotiate the price down to accomodate the fact that you are representing yourself.
If, however, you don't have the time, energy, experience, knowledge and resources to do all this yourself, you should probably consider a buyers agent.
A real estate agent is much like any other professional - a painter, a carpenter, an accountant, etc; sure, most of us can perform the specific acts required to do the job, but most of us can't get the job done as well as a professional can.
There's a difference between being able to do something, and being equipped with the time, knowledge, information and resources to do that same something VERY WELL.....
A real estate agent is much like any other professional - a painter, a carpenter, an accountant, etc; sure, most of us can perform the specific acts required to do the job, but most of us can't get the job done as well as a professional can.
I agree with Bill, it's the same thing I was going to say. You don't need a buyers agent, but it is a service industry that should at the very least reduce time and stress for you. They have experience with the ins and outs of a transaction where as you don't. Experience can be priceless and this is your first home. There is nothing wrong with electing no representation, but you have to be prepared to deal with a mistake or 2 on your part that could be very costly.
If your agent isn't doing much then either you need to sit down and get on the same page, or if he just isn't good go find a new one. If you hire an agent, think of it as going to the doctor or hiring an attorney- spend your time researching for a good one then focus on finding the house.
My husband and I are first-time homebuyers. We are wondering if it is really necessary to work with a real estate agent to buy a house. If I can find listings online, visit open houses on my own, submit an offer through a real estate attorney, and arrange for closing on my own, what exactly is their role for the buyer?
The realtor with whom we have been working hasn't really done much for us besides send listings by email. But we've seen all of these listings ourselves by checking everyday online. She hasn't done much else.
Our housing budget is approximately $600,000. This means that the buyer's agent would receive a 3% commission ($18,000) which is clearly built-in to the seller's list price. So, what does the buyer's agent do for me for $18,000 that I couldn't do on my own and with an attorney (who would be much cheaper, assuming the seller would reduce their price accordingly if no buyer's agent was involved). I'm not going to pay a buyer's agent $18,000 to help me fill out papers. I'm intelligent enough to understand them on my own and with the help of lawyer.
It seems like much of this process I could do on my own. Is there any disadvantage to going about this without a buyer's agent?
Thanks for your help!
Buyer agency came about in the early to mid 1990s due to consumer demand and court cases. Prior to buyer agency, in most cases the only real estate agent involved in a transaction was the listing agent who only represented the seller in most states. The court cases involved the buyers filing a complaint against the listing agent because the buyers did not understand agency representation and believed that their interests were not being adequately represented by the agent. What they misunderstood is that the listing agent's legal responsibilities were to the owner only and that the agent was actually trying to get the best deal for the owner and not necessarily the buyer. Many states have since passed laws that require clarification of agency status and make it clear to any buyer that the listing agent does not represent their best interests.
For buyers that are experienced in purchasing a home, understand the process, have access to the necessary information, have the time and skill to work the deal, and are good negotiators, then having a buyer agent is probably not critical. However, this doesn't mean that you can negotiate a lower price on the house just because you don't have a buyer agent. As other people have pointed out, the commission paid by the seller is a separate contract from the house purchase.
For those people who are not experienced and knowledgeable about the home buying process and all of it's pitfalls(and this includes the largest majority of home buyers) then having a good buyer agent can save them money, time, and avoid expensive pitfalls in the process.
But the thing I'm seeing is that if you don't have an Agent that will make $18k (from the seller) to represent you, then the seller's agent will make $36k to represent the seller alone. Now, I totally understand that you feel equipped to represent yourself, and I think there are alot of people who are (we've done it twice) - in the internet age, anyone can find out what is on the market. However, it doesn't cost you anything to have a buyer's agent, and they could, in fact, save you money.
There is a lot of information online. How do you determine relevance?
There are a number of different negotiation strategies. Which one do you use first?
What happens when something happens? Do you have a contingency plan?
Bottom line, you don't know what you don't know. You have never done this before, you wouldn't know what is reasonable and common for your area was. You couldn't put the bus back on track if it skidded sideways.
You are very lucky that:
1: The seller and the listing broker arranged for payment to the brokerage of your choice, in advance.
2. There are knowledgeable, caring, experienced professionals available for hire.
3. We know what you don't.
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