Why do you need someone to help you buy a home? It isn’t that complex, is it? I know plenty of people who have bought homes without an agent…
Yes, you might have heard about a few folks that buy homes without an agent. One particular investor I know called me frequently, because I had lots of listings, and they thought that if I represented the seller, by calling me directly they could get a better deal — or in the case of the 2013 investor frenzy, that they would at least be able to buy a home or two.
And, for savvy investors, it might not be a bad thing. For the average buyer, it isn’t a good idea, and here’s why: First, it doesn’t cost you anything to have a buyer’s agent represent you. The seller is paying the cost, and has already agreed to pay them by putting their home in the MLS system. In some of the fields that are hidden from the public, there is information as to how much a seller is willing to pay a buyer’s agent, and other terms. So as a listing goes into the MLS, a buyer agent already has an agreement for compensation, and the buyer is not paying it.
What good is this representation?
If you are buying a home, there are lots of rules and pitfalls. If you want to see the process, look at my first time buyer article. As part of this process, there are areas where both buyers and sellers can get themselves in trouble. A buyer, for example, MUST disclose, before, or concurrent with making an offer, *anything* they can think of that might cause them to be unable to complete the transaction. For example, maybe you had something unfortunate happen 6-7 years ago, and there is ongoing litigation about it. And, your attorney has assured you that it won’t have any effect on your purchase. So, you don’t mention it. A week before closing, you lose the case and end up owing someone $100,000 and now you can’t buy the house. And, you figure to get your earnest money back because now you can’t get financed, and the financing contingency comes to light. Except… it doesn’t, because the contract says that the buyer warrants that they have disclosed anything that might prevent closing, and you didn’t. So you will now either lose your earnest money, or face litigation or mediation about it. Not fun. Your agent might have prevented this.
How about, you get under contract to buy a house, and your wife loves the coach lights and the chandeliers. Except on final walkthrough, they are gone, replaced by some home depot bargain bin specials. Now what? If you don’t have your own buyer agent, the seller’s agent, the one you are dealing with, is going to push pretty hard to get you to accept the situation. Because the seller hired them, they work for the seller. Sure, they are supposed to not take sides, but really? Your agent, your personal buyer’s agent, is your advocate and will fight hard for you. And it doesn’t cost you anything.
How about using your cousin Vinny for your buyer agent? You know, the guy who got his real estate license a year ago and has closed two transactions since then? I’m betting he is not going to do the best possible job for you. Experience is important. There is nothing like having been through a few hundred transactions to learn how to best serve a client, believe me! So when you work with me, or one of my buyer agents, you can be sure that you are getting the benefit of experience. I have personally closed hundreds of transactions, and while my buyer agents don’t have quite that level of experience, I personally oversee each and every transaction. In addition to working as a real estate agent and investor, I also work as a coach and mentor to other agents. Your transaction will be in the best hands.