The New Year is upon us – and with it, many fresh opportunities for prospective homebuyers.
Every so often, people just entering the real estate market will ask me this question: Is it all right to look for a home without using a real estate agent or broker? Or, I’ll get an email from someone who has a problem at some point in the transaction, perhaps discovered by a professional home inspector or by a lender as they try to secure a mortgage. More often than not, many of these folks indicate that they have gone down the path to homeownership solo, without the aid of a real estate agent or broker.
I’m not sure I understand why some buyers fail to avail themselves of the professionals whose whole career is spent helping people turn a dream of homeownership into reality — especially when working with a real estate agent usually doesn’t cost the buyer anything. In almost every case, the seller pays the listing agent a commission, based on the selling price of the home; that commission is then shared among the participating brokers and agents. The seller isn’t going to raise the price you agree on to cover your “share” of the commission. He or she is already committed to paying that fee. Except for some minor costs, buyers usually don’t pay directly for the representation that protects their interests in a real estate purchase.
Some homebuyers think that if they don’t use a real estate agent, the seller will be more amenable to lowering the price of the home. These homebuyers mistakenly think that if the seller has the opportunity to pay less in commission, he or she will share the “savings” with the buyer. Fair is fair, right?
This line of thinking seems logical, but it doesn’t work in residential real estate. The seller is obligated to pay a certain percentage of the selling price of a home as a commission fee to the broker who lists the home. Whether a buyer’s broker is assisting you or you use the listing broker to complete your offer, the seller usually pays the same commission to the listing broker – it just won’t be shared with anyone representing you.
Even if you find a home that is “for sale by owner” (a “FSBO”), it’s possible that the home is wildly overpriced to begin with. Assuming you succeed in encouraging the seller to adjust the price somewhat, you still won’t necessarily be paying less than you would have, and you might pay a lot more than you should.
So, if the issue isn’t really cash out-of-pocket, and you’re not going to get the seller to split the “savings,” why do some buyers insist on plowing through the complicated maze of residential real estate alone?
The bottom line is this: it’s important for you to find a good real estate professional — a Realtor — to help guide you through the home buying process. A good agent (and the broker with whom he or she is licensed) can expand your choices to include new neighborhoods and homes you might not have considered otherwise. The right agent can also help you avoid the potholes that plague the road to homeownership.
Do you absolutely need a broker to buy a home? There’s no law that says you can’t go it alone. You can look through open house listings in the paper. You can drive around looking for FSBOs. You can surf through websites and home pages, reviewing different listed properties. In the end, though, I strongly believe you’ll do better if you work with a real estate professional. Having someone who understands your objectives, advocates your interests and possesses extensive market knowledge is a benefit in any pursuit; facing the largest financial transaction most of us make, why not take advantage of the best resource you have available?
When it’s time to make your move, make sure you utilize the talents and expertise of a qualified, professional Realtor. I think it’s a terrific New Year’s resolution – and certainly less painful than dieting!
Contact the Karen Eagle Group to discuss your move in 2018.