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I have found a home of interest in a rural area of little familiarity to me. This is by far not my first home purchase or attempt at one.
[I've never used a buyer agent except "by accident" and that was a foreclosure of sorts, that the "buyer agent" informed me of and I had to work fast (hot property), that went great, and that agent "fixed it" for me to acquire that bargain. A totally different situation, totally different market.]
Last year I found a rural property (similar to this one) that I liked a lot and simply contacted the seller agent. She showed it to me multiple times, had some limited knowledge of certain issues, and I did the footwork (like going to the township myself - no biggie). I made a serious offer (95% of asking), which was countered with $4,000 less than asking price. She essentially told me, the listing was up in two days, and that they'd probably relist next summer. I said I'd wait (assuming that listing prices at that time in that area were in a little bubble), and I was in no rush. Two comps sold for $20,000 less than this property; several comps sold the preceding year for less as well. Then this happened - the house sold "off market" 92 days after the listing ended, for essentially the price I would have countered back. So I lost that very desirable property. I'm still wondering what happened there.
Fast forward to now. I have (as usual) found an interesting property via the internet, that I want to see, in an area considerably further out, that I'm not really all that familiar with. It's rural, and has specific features important to me - probably nothing too special to most. But - I'd hate to lose out lest someone else grabs it before I get to see it and consider it, and it turns out to be a great place.
I am wondering whether to just call the listing agent or go through a buyer agent. The buyer agent idea is not particularly distasteful to me, but, this property alone is very specifically of interest to me (most all other properties in the area aren't). My theory is that the seller agent gets a bigger commission if they don't split it so might prod the sellers to accept an offer less than they might not otherwise accept (I'm a cash customer, btw). That's my theory. I also am not sure the area is of any particular interest to me, but prices there are very attractive (places closer to where I have been looking are in a huge bubble right now). Anyway, I'm not interested in being pestered, as finding this property in this area was a fluke - I'm not desperate - it just looks way interesting. I really have to suss out the area to see if it suits me. I do not have to commute - so location is up to whatever else.
Bottom line: Would you suggest I get a buyer agent before viewing this property? Why or why not?
Yes, I recommend a buyer agent. You don't know if the seller agent will be a professional or not, so why gamble? Get your own agent. If you don't need them, fine. If you do need them, you'll be glad you them. You hire an agent to handle problems that may arise. The problem is that buyers don't have a crystal ball so you don't know what may arise.
I agree with Brandon. You have nothing to lose by hiring your own agent, and a lot to lose if you don't. RE sales are complicated legal transactions. Other people have their own views on their ability to handle these things, but I sure wouldn't want to do this on my own. You definitly don't want a small legal matter to be missed and the title transfer not to be completed for whatever reason. Also the seller's agent has no incentive to give you a good deal or work on your behalf in any way. The fact that you're paying cash works in your favor by speeding up a closing date, but that is balanced by the buyer getting a larger offer with a mortgage sale, most likely.
I personally went without a buyer's agent on my last home purchase. I have an extremely low opinion of realtors, so I didn't want to introduce another individual into the transaction with incentives that weren't in line with my own. Buyers' agents are paid for getting a transaction to close, not for getting what is best for the buyer. I found my home on Zillow, which is much more useful than a realtor since it actually listens to your requests (i.e. over x sq. ft., under x price, in x neighborhood)- the buyers' agents tend to show you things outside of your requirements.
Since I know myself best, I didn't want someone trying to downplay my concerns or to try to convince me to accept something that is otherwise less than optimal. I did my own analysis of the comps in the area and determined what I thought to be a fair price, then negotiated directly with the sellers' agent to get to that price. Whenever issues arose, either I handled it or my real estate attorney handled it (depending on the type of issue).
I personally went without a buyer's agent on my last home purchase. I have an extremely low opinion of realtors, so I didn't want to introduce another individual into the transaction with incentives that weren't in line with my own. Buyers' agents are paid for getting a transaction to close, not for getting what is best for the buyer. I found my home on Zillow, which is much more useful than a realtor since it actually listens to your requests (i.e. over x sq. ft., under x price, in x neighborhood)- the buyers' agents tend to show you things outside of your requirements.
Since I know myself best, I didn't want someone trying to downplay my concerns or to try to convince me to accept something that is otherwise less than optimal. I did my own analysis of the comps in the area and determined what I thought to be a fair price, then negotiated directly with the sellers' agent to get to that price. Whenever issues arose, either I handled it or my real estate attorney handled it (depending on the type of issue).
The transaction was very smooth.
Well, there ya go. You joggled my memory.
I think that's why I am averse to buyer agents. It dawned on me that, yes, I've had two buyer agents of sorts... one about 30 years ago that wasted hours and hours of my time showing me properties of no interest to me. That fool assumed a single 30 yr old guy with some dough will take whatever you show him. In my case...NOT! In fact I remember he got testy with me when I poo-pooed a house he took me to.
I wound up accidently finding the place I wound up buying. I do not recall how helpful he was at closing. I just remember that one thought I had: "Why didn't that fool call my attention to that property? It was right smack in the middle of the area I was interested in, was listed for months, and in the middle of my price range."
Twenty years ago was even worse! A friend connected me with a realtor to find a home in my area of interest. I took a street map with the specific areas I was interested in shaded - and I told her, nothing outside this area. She dragged me to several houses outside the mapped area. Meantime, I happened to pick up the Sunday paper, saw a listing of interest, went to the open house...and voila!..just what I was looking for. Again, right smack dab in the middle of my mapped area of interest, in my price range. I called the listing agent first thing Monday morning. It had an offer two days previously that the sellers accepted just before I called. I did get on the phone and reamed that chick a new... So, that's why I have little incentive to get a buyer agent. Those people are deaf!
And yes, I DO know myself best.
So...another good point, NYC.
Yes or no....oh well, first thing for me is to get in the car and go do a drive by. What's a little gas when E-85 is going for $1.75 a gallon. I haven't been to that area in decades.
Last edited by TwinbrookNine; 08-11-2015 at 12:27 PM..
I personally went without a buyer's agent on my last home purchase. I have an extremely low opinion of realtors, so I didn't want to introduce another individual into the transaction with incentives that weren't in line with my own. Buyers' agents are paid for getting a transaction to close, not for getting what is best for the buyer. The agent works for the buyer. A professional will work in the clients best interest. The consumers job is to find a professional and not the first warm body. If the state requires agency, have an escape clause in event of a bad hire.
I found my home on Zillow, which is much more useful than a realtor since it actually listens to your requests (i.e. over x sq. ft., under x price, in x neighborhood)- the buyers' agents tend to show you things outside of your requirements. Hrmm....didn't know you could give zillow commands to follow. You mean it provides information? Did you know that you can have an agent and still use zillow as a research tool? Oh by the way, Zillow's information comes from tax records and agent input.
Since I know myself best, I didn't want someone trying to downplay my concerns or to try to convince me to accept something that is otherwise less than optimal. I did my own analysis of the comps in the area and determined what I thought to be a fair price, then negotiated directly with the sellers' agent to get to that price. Whenever issues arose, either I handled it or my real estate attorney handled it (depending on the type of issue). NY is a different beast. Many states don't have attorney involvement on that level.
The transaction was very smooth. It certainly can be. I have no issues that you elected to do it yourself. Some people are quite capable (even if they don't know it). You apparently are. For those that aren't as capable they have options so primarily I wanted to counter a few of your points. I'm glad you had a good transaction. Enjoy your home.
Most feedback you will get on this subject will be from realtors explaining why you need them. They are defending their career and have every right to do so.
That being said, anyone can buy a house without a realtor representing them. Is it easier? No. Is it cheaper? It can be. Is it the best idea? Not always.
Factor in the fact that you will still need an attorney. Then factor they value of your time. Now compare that to what you will save potentially.
If you have a lot of experience buying houses then it shouldn't be a problem. If its your first time, then you will likely be back here asking random people on the the internet for help when you could have a realtor doing it for you.
Most feedback you will get on this subject will be from realtors explaining why you need them. They are defending their career and have every right to do so.
That being said, anyone can buy a house without a realtor representing them. Is it easier? No. Is it cheaper? It can be. Is it the best idea? Not always.
Factor in the fact that you will still need an attorney. Then factor they value of your time. Now compare that to what you will save potentially.
If you have a lot of experience buying houses then it shouldn't be a problem. If its your first time, then you will likely be back here asking random people on the the internet for help when you could have a realtor doing it for you.
I agree with most of this post. However, I find that it is easier without a buyers' agent because no matter how professional the individual, their incentives are not 100% in line with yours. For example, let's say a deal is about to fall through on a $500,000 house over a $1,000 inspection item. The buyer's agent is financially incentivized to convince the buyer "hey, it's only $1,000, don't worry about it"- after all, his commission is practically unaffected by such a small amount in comparison to the size of the deal, even though the buyer is out an extra $1,000 in the end if the purchase goes through. The buyer is stuck thinking "is my agent right? is it really not a big deal? or is my agent just looking out for his/her own commission?"
I'm not saying that all agents are unscrupulous and would try to convince their buyers to do so, but the system is set up so that the financial incentive is there. If the deal falls through, the buyer's agent gets 3% of zero, but if the buyer's agent can convince the buyer to eat the cost, the commission is saved.
This is just one potential example of the many. I've experienced it first hand before giving up. The worst is in trying to figure out what to offer for the property- a competitive market analysis performed by a buyer's agent is the first step in the process where the incentives diverge. The buyer's agent benefits from the potential buyer making the highest offer possible, whereas the buyer benefits from making an offer that most closely resembles an estimate of the market value. The problem continues as the transaction progresses, because each snafu is an example of a situation where the buyer's agent gains by convincing the buyer to accept something less than ideal. Perhaps its in accommodating an inconvenient close date, or a strange contract provision, or any other of thousands of possible occurrences in a transaction.
At least if you forgo a buyer's agent, you will not have that voice in your ear saying "I'm ONLY on your team" when there are actually two teams represented by the agent- yours and theirs. You can hear what the other side says and decide for yourself, with a clear mind, how to proceed.
To Brandon Hoffman:
Quote:
Originally Posted by Brandon Hoffman
The agent works for the buyer. A professional will work in the clients best interest. The consumers job is to find a professional and not the first warm body. If the state requires agency, have an escape clause in event of a bad hire.
Please see my discussion of the competing incentives in any agency relationship that is compensated via a success-based fee (or more accurately, a success-dependent fee). This is an issue in huge business transactions all the way down to the smallest real estate transaction. When compensation only occurs after a deal is closed, there is automatically an incentive to close a less-than-ideal deal and no agency laws of any kind can remove such an incentive.
Quote:
Originally Posted by Brandon Hoffman
Hrmm....didn't know you could give zillow commands to follow. You mean it provides information? Did you know that you can have an agent and still use zillow as a research tool? Oh by the way, Zillow's information comes from tax records and agent input.
This is precisely how Zillow works- you save parameters into a search and you get emails instantly when a listing matches your criteria. It won't bother you with homes that are outside the area you wish to live in, or outside your price range, or too small, etc. Agent input has nothing to do with geographical representations or listing price; the only thing an agent potentially does that factors at all into the search is the count of beds/baths/square footage, but this information can also be entered by those selling without agents. Tax records are a great data source though since the government records are typically quite good.
Quote:
Originally Posted by Brandon Hoffman
NY is a different beast. Many states don't have attorney involvement on that level.
Are you implying that agents in other states dispense legal advice? Because discussions surrounding contract provisions are best when they come from an attorney with years of legal education rather than an agent who passed a certificate exam. Perhaps I wasn't clear in my original post but these are the questions that I passed along to my attorney during my transaction.
And to the OP:
Quote:
Originally Posted by TwinbrookNine
Well, there ya go. You joggled my memory.
I think that's why I am averse to buyer agents. It dawned on me that, yes, I've had two buyer agents of sorts... one about 30 years ago that wasted hours and hours of my time showing me properties of no interest to me. That fool assumed a single 30 yr old guy with some dough will take whatever you show him. In my case...NOT! In fact I remember he got testy with me when I poo-pooed a house he took me to.
I wound up accidently finding the place I wound up buying. I do not recall how helpful he was at closing. I just remember that one thought I had: "Why didn't that fool call my attention to that property? It was right smack in the middle of the area I was interested in, was listed for months, and in the middle of my price range."
Twenty years ago was even worse! A friend connected me with a realtor to find a home in my area of interest. I took a street map with the specific areas I was interested in shaded - and I told her, nothing outside this area. She dragged me to several houses outside the mapped area. Meantime, I happened to pick up the Sunday paper, saw a listing of interest, went to the open house...and voila!..just what I was looking for. Again, right smack dab in the middle of my mapped area of interest, in my price range. I called the listing agent first thing Monday morning. It had an offer two days previously that the sellers accepted just before I called. I did get on the phone and reamed that chick a new... So, that's why I have little incentive to get a buyer agent. Those people are deaf!
Very similar experiences on my end with buyers agents! Best of luck in your transaction no matter which avenue you decide to use
Last edited by NYCresident2014; 08-11-2015 at 03:50 PM..
If you are concerned about conflict of interest, just pay the buyer agent yourself with the agreement that they waive the MLS offer of compensation.
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