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My husband and I have moved a few times, several states, and as a result we have been through the home buying process a few times. When we bought our last home here in Northern Virginia, I literally did all the work. I used the Realtor.com site to narrow down the homes. I came up with the list of homes that met our criteria. The only thing the realtor did was open the door to show us the homes on my list and write up the contract. I do not know if I even want to use the term write-up the contract, because it was just fill in the blanks. Basically, I felt that my agent did not earn the $12,000 commission.
There are so many websites that provide me with the recent home sales in my target area, therefore I feel that I can write up a fair offer without a real estate agent. I have heard the argument that I do not pay for the Realtor because the seller pays the commissions. But, if I do not use Realtor, I believe that I can negotiate a lower price on the home.
If I do not have my own agent, then how to I view a home? It seems that the Seller's/Listing agent are more than happy to show me the home but, I am scared to allow the seller's agent to show me the home because that act may make me unknowingly enter into an agreement with the listing agent? I read online that within the last two years a law was passed in VA that a buyer must have a contract with a Buyer's agent before they are allowed to view a home. Can anyone elaborate on this or at least how to avoid this.
Please give me advise on going through the home buying process without a Realtor. I want to save that commission to lower the price of the home, plus my last realtor did not do anything worthy of her commission. I would rather pay out of pocket for a Real Estate lawyer to help me with the contract. Thank you.
There are buyers agents that will accept a much lower commission, say 0.5-1.0 percent instead of the typical 3.0 percent, if you are willing to do most of the work. Other realtors will forgo the percentage entirely if you are willing to pay a la carte, or by the hour, for services.
Yes, you can. In fact, we bought our first detached house from a FSBO seller who refused to pay a buyer's agent--which meant we basically had to go it alone (or pay some realtor out of our own pockets, which would be insane on the buyer's end).
But in anything but a FSBO, you will probably be encouraged to have your own agent. Sellers' agents will try to steer you toward someone they know. That said, if you can convince the seller's agent to deal with you directly, as a dual agent, they will keep all of their commission; this is a conflict of interest for them--and the sellers would be wise to forbid them from doing this--but it's in your favor as a buyer.
As to viewing homes, you seem to know more than I do on this. You can definitely go to open houses on your own--but it makes sense that they wouldn't let some random person have access to the house unescorted. And in this market, you need to be able to see the house the day it goes on sale and hopefully put in an offer before the open house; if you wait till the open house, you lose a good opportunity to be ahead of the pack.
You're probably better off getting an agent, because the system is rigged to make them necesssary. FSBOs are the exception.
My husband and I have moved a few times, several states, and as a result we have been through the home buying process a few times. When we bought our last home here in Northern Virginia, I literally did all the work. I used the Realtor.com site to narrow down the homes. I came up with the list of homes that met our criteria. The only thing the realtor did was open the door to show us the homes on my list and write up the contract. I do not know if I even want to use the term write-up the contract, because it was just fill in the blanks. Basically, I felt that my agent did not earn the $12,000 commission.
There are so many websites that provide me with the recent home sales in my target area, therefore I feel that I can write up a fair offer without a real estate agent. I have heard the argument that I do not pay for the Realtor because the seller pays the commissions. But, if I do not use Realtor, I believe that I can negotiate a lower price on the home.
If I do not have my own agent, then how to I view a home? It seems that the Seller's/Listing agent are more than happy to show me the home but, I am scared to allow the seller's agent to show me the home because that act may make me unknowingly enter into an agreement with the listing agent? I read online that within the last two years a law was passed in VA that a buyer must have a contract with a Buyer's agent before they are allowed to view a home. Can anyone elaborate on this or at least how to avoid this.
Please give me advise on going through the home buying process without a Realtor. I want to save that commission to lower the price of the home, plus my last realtor did not do anything worthy of her commission. I would rather pay out of pocket for a Real Estate lawyer to help me with the contract. Thank you.
what the listing agent and the seller arrange for compensation will be unknown to you. if you come in unrepresented, you may be able to negotiate a lower price IF the listing agent is willing to reduce the terms of the agreement between the agent and the seller.
And yes, last year a law was passed that requires a buyer broker agreement before an agent can show a listing to a prospective client. that arrangement can be for however long a duration you agree upon, be it for one day, week, or for one specific property itself.
If you have a dozen homes you want to see, it's going to get old real quick if you have to try and schedule times with all these different people.
Typically, the contracts say that if the home is sold, the listing agent and his/her broker gets 6% (or whatever other percent, such as 5%) that the seller has agreed to pay. If there is a buyer's agent, typically the contract says that this 6 (or other) percent is split with the buyer's agent and with his/her broker. If you don't have a buyer's agent, the seller typically STILL has to pay the full percentage, but the listing agent and his/her broker may be able to keep the full amount.
That is why kww says that the listing agent has to be willing to reduce the terms of the agreement... And it is also one reason why it may not be in your best interest to be unrepresented, since the cost to the seller may be exactly the same and the seller may not have any savings to pass along to you.
If you get a listing agent to let you see the home, s/he will likely not split the commission if you bring in an agent later to negotiate for you. You may want to research "procuring cause."
what the listing agent and the seller arrange for compensation will be unknown to you. if you come in unrepresented, you may be able to negotiate a lower price IF the listing agent is willing to reduce the terms of the agreement between the agent and the seller.
Whatever percentage the seller and seller's agent have agreed on (usually 4.5%-5.5%) does not affect the fact that the seller WILL be splitting his/her commission 50/50 with any buyer's agent who comes into the mix. If an unrepresented buyer can entice a seller's agent into doing dual agency (and the seller's agent can persuade his/her client to unwittingly accept this), then the seller's agent keeps the entire commission and thus has a vested interest in getting that buyer over buyers who do have agents--even if this buyer offers a lower price. Any listing agent would rather get 5% of 575K than 2.5% of 600K.
Dual agency is clearly in the buyer's interest--though it's incredibly unethical for the seller's agent.
Last edited by Carlingtonian; 07-28-2013 at 04:05 PM..
I think if you use an agent through Redfin, they will refund you a portion of the fees paid to the buyer's agent. I don't know exactly how it works or what the percentage is, but that is perhaps another way to save some money off of the traditional type of buyer's agent without going completely unrepresentated.
I can relate to the OP in that when we were home shopping this last year, we pretty much found all of the homes we wanted to look at ourselves - to be fair, I think the low inventory has made it difficult for realtors to find homes to show their clients. In addition, in the online age, it really is much more efficient to look online through the homes yourself and figure out which ones interest you. Personally, I still think having a realtor to handle a lot of the contract negotiation and coordination after the ratified contract makes having a buyer's agent well worth it, though.
My husband and I have moved a few times, several states, and as a result we have been through the home buying process a few times. When we bought our last home here in Northern Virginia, I literally did all the work. I used the Realtor.com site to narrow down the homes. I came up with the list of homes that met our criteria. The only thing the realtor did was open the door to show us the homes on my list and write up the contract. I do not know if I even want to use the term write-up the contract, because it was just fill in the blanks. Basically, I felt that my agent did not earn the $12,000 commission.
A good agent is worth their commission. I wouldn't use anecdotes to judge the value of an entire profession. Just as there are good and bad doctors, lawyers, accountants, there are also good and bad real estate agents. I've bought numerous properties in the NoVA area in the past 10 years, but I would never go through a transaction without one of the two agents I work with. One of them is a rebating agent, who I use for the more straightforward transactions. He is okay with taking a 0.5% to 1% commission, depending on the size of the deal. The other one would keep the full 3% because he brings me deals and makes them happen. Of course I know agents that I would never work with because they are incompetent. But there are also doctors, lawyers, and accountants I would never use.
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There are so many websites that provide me with the recent home sales in my target area, therefore I feel that I can write up a fair offer without a real estate agent.
This is not the case. Even as I began regarding myself as an expert of homes in one area, my realtor is able to send me comps that are more accurate. Sometimes the listings that you find on the internet are poorly done so you don't get a true sense of what the home is like. There were homes where I didn't think were comparable based on the listing but turned out to be very comparable once I went to see the home in person. Realtors also interact with buyers/sellers on a daily basis and have a better sense of where the market is headed than I am able to gauge just through sales.
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Please give me advise on going through the home buying process without a Realtor. I want to save that commission to lower the price of the home, plus my last realtor did not do anything worthy of her commission. I would rather pay out of pocket for a Real Estate lawyer to help me with the contract. Thank you.
In a down-market, maybe. In an up-market like we are in now? You are not going to get anyone to agree to this. This is because the 6% commission is from the seller to the seller's agent. The seller agent is then agreeing to split the commission with any buyer's agent that brings in a buyer to complete the sale. In other words, it's not up to the seller whether he wants to reduce the price by the 3% commission, but rather the seller's agent whether he wants to contribute 3% to the deal. If you are not represented by an agent, a seller's agent is going to have to do more work to orchestrate the deal. His primary goal is to make sure that the closing happens. Instead of just chasing down the seller side to make sure things are going smoothly, he'll also have to make sure everything on your end is okay. There is a *LOT* of work to be done on the buyer's side, such as arranging for inspection, getting financing squared away, and generally making sure that the buyers haven't changed their mind for convenience. That's more work for him. Why would he agree to do more work and take on more risk of the closing not happening without any additional compensation?
Redfin is a great alternative. We had a few realtors highly recommended to us, but they were not as impressive as I was hoping for. I got a recommendation for an agent that works with redfin and have been really impressed. Plus, you do save money buying through them because of lower commission rates.
DARN! Can't give you comp points (so soon), but thanks for the positive post.
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Originally Posted by NovaOne
A good agent is worth their commission. I wouldn't use anecdotes to judge the value of an entire profession. Just as there are good and bad doctors, lawyers, accountants, there are also good and bad real estate agents. I've bought numerous properties in the NoVA area in the past 10 years, but I would never go through a transaction without one of the two agents I work with. One of them is a rebating agent, who I use for the more straightforward transactions. He is okay with taking a 0.5% to 1% commission, depending on the size of the deal. The other one would keep the full 3% because he brings me deals and makes them happen. Of course I know agents that I would never work with because they are incompetent. But there are also doctors, lawyers, and accountants I would never use.
This is not the case. Even as I began regarding myself as an expert of homes in one area, my realtor is able to send me comps that are more accurate. Sometimes the listings that you find on the internet are poorly done so you don't get a true sense of what the home is like. There were homes where I didn't think were comparable based on the listing but turned out to be very comparable once I went to see the home in person. Realtors also interact with buyers/sellers on a daily basis and have a better sense of where the market is headed than I am able to gauge just through sales.
In a down-market, maybe. In an up-market like we are in now? You are not going to get anyone to agree to this. This is because the 6% commission is from the seller to the seller's agent. The seller agent is then agreeing to split the commission with any buyer's agent that brings in a buyer to complete the sale. In other words, it's not up to the seller whether he wants to reduce the price by the 3% commission, but rather the seller's agent whether he wants to contribute 3% to the deal. If you are not represented by an agent, a seller's agent is going to have to do more work to orchestrate the deal. His primary goal is to make sure that the closing happens. Instead of just chasing down the seller side to make sure things are going smoothly, he'll also have to make sure everything on your end is okay. There is a *LOT* of work to be done on the buyer's side, such as arranging for inspection, getting financing squared away, and generally making sure that the buyers haven't changed their mind for convenience. That's more work for him. Why would he agree to do more work and take on more risk of the closing not happening without any additional compensation?
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