Not using a real estate agent to buy first home?
Posted on July 7th, 2010 in Renting & Real Estate | 7 Comments »
Melody asked:
Can someone give the advantages and disadvantages of not using your own real estate agent to purchase a home? We have never bought a home before, but we consider ourselves to be pretty educated on the subject, as we have done a lot of research. We would most likely use the agent that the seller is using to help us with the paperwork and everything. Has anyone done this, and what would you recommend?
7 Responses
Non Surgical Face Lift
Why would you not use an agent to buy your home. The seller is the one that pays the agent’s fees, not you. Typically, in this market, the total real estate commision is 4.5% of the selling price, and the seller covers the cost. If the seller agent is also the buyer agent, then they only get charged 3%. Sure, they will save a little tiny bit of money, but you are very unlikely to get that money back in a reduced home cost from the seller.
A buyer’s agent will help you know what is on the market and will get you the appointments much faster than if you do not have the access to the mls listings yourself, (and know how to get in touch with the right person).
The buyer’s agent will also help you with getting the little things you forget about, such as who a checklist for buying and moving into a new home, getting the records and proper docs for the mortgage company, etc.
Torrance Condos
The sellers agent has a greater interest if he is representing the buyer and seller (higher commission). There is a huge conflict of interest and I don’t recommend it.
Make sure you have a good real estate attorney to review all documents.
Thermage Under Eye Bags
Assuming you’re in the US, if you use the seller’s agent they act as a go-between and take both sides of the commission. They become your buyer’s agent, as well as the seller’s agent. It’s not wrong for them to do this, but you don’t make any saving so in this scenario I’m not sure why you’d avoid having a buyer’s agent. As a buyer, the only way to save money on agent commissions is to have no agent involved in the transaction.
California Real Estate
Why in heaven’s name would you do this when using an agent of your own costs you not a cent? Realtor commissions are paid by the seller. When the buyer has an agent, the listing Realtor pays the selling Realtor a percentage of the fee agreed upon by the seller for the sale.
The listing agent represents and is an advocate for the seller, doesn’t it make sense to have an advocate of your own?
I’ve been a mortgage lender for more than 20 years and some of the most adversarial proceedings I’ve ever seen were caused by people trying to be their own experts and missing something crucial that led to a need for a negotiator that, due to their decisions, they didn’t have.
If you wouldn’t do your own surgery or perform your own root canal, don’t act as your own Realtor.
Baltimore Maryland Real Estate
This is a very smart move. Here’s why:
If you went with a buyer’s agent, that agent will have an incentive to get you to bid high (the exact opposite of their fiduciary duty, but that’s another story…) so that they could get a done deal and get their commission check.
By getting the seller’s agent to represent you as well, you have flipped the table in your favor. Now, the one agent stands to get a whopper of a commission by representing both parties in the transaction, so he/she will work like a demon to make the deal happen. Thus he/she will pressure the seller to accept lower offers that come from you.
What you are proposing is the most effective way to cut through the perverse incentives that are so prevalent in the real estate business.
Edit: I love the above comment “If you wouldn’t do your own surgery or perform your own root canal, don’t act as your own Realtor.” Hahaha that’s a good one. It tries to place a profession (Realtor) where the only barrier to entry is a one month training course in the same league as medical professionals. A fairer comparison would be “If you wouldn’t mow your own lawn, don’t act as your own Realtor.”
Exilis Body Shaping
If I were going to skip an agent it would be in selling my home not buying. The seller pays the buyers commission. I always look at it like a travel agent service (like it was in the old days when the airlines paid them to book flights). They’ve got the forms you need, the experience (if you get a good one), and it doesn’t cost you personally. Why not?
Playa Del Rey Real Estate
I am a real estate agent of 20+ years and in my opinion it’s good to handle everything with the same agent if you can.
It just goes faster and smoother as 1 person knows whats going on the whole time and they don’t have to relay info back and forth and back and forth.
You also tend to get a better deal if you go through the same agent as statistics and history and data clearly show.