Do I need a Realtor to buy?

Fori is not pleasedFebruary 6, 2011

I'm in CA and considering moving. I'd use Realtor to sell because I don't want to mess with it. Do I need one to buy? I suppose I don't NEED one but is it better? The 3% commission irks my spouse. :)

If I don't bring an agent, does the listing agent get both ends of the commission or is the 3% knocked off or uhhh yeah I don't know. There is not a lot of properties of the type we're interested in so we could probably locate the houses without assistance.

I guess I'm wondering if it's cheaper to do the transaction with an attorney instead of using a Realtor. Housing prices are absurdly high here so it's a large commission.

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ottawavalleygardener

As the buyer, it doesn't cost you anything to have a buyer's agent. The commission is split between the selling and buying agent. I got a buyers agent when I bought my existing home, even though I saw it before contacting her, because I wanted to ensure MY best interests were taken into consideration.

    Bookmark   February 6, 2011 at 4:03PM
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Fori is not pleased

As a buyer, though, wouldn't an offer be more appealing if the seller didn't have to also pay the extra ~$50k commission?

I guess I don't really know how it works. Hrmm. :/

    Bookmark   February 7, 2011 at 11:33AM
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terriks

The listing agent negotiates the commission, and the seller is obligated to pay the entire commission to the listing agent regardless of who brings the buyer. The agents who belong to the MLS have an agreement with the other brokers/agents to share the commission with the selling (buyer's) agent.
The amount of the commission is a contract between the seller and their agent - the buyer is not involved with the amount of commission.
Of course there are many times where a seller's agent may cut the commission when they bring a buyer, especially if there is another offer from a buyer represented by another agent, but it's not the case that an unrepresented buyer will automatically "save" 3%.

    Bookmark   February 7, 2011 at 12:16PM
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ottawavalleygardener

Just to further clarify ... the commission is the same; there is no "extra ~$50k commission". In my case, the selling agent had to split the ~$18,000 commission with the buyer's agent. I'm sure she would have preferred to get the whole amount herself, but I wanted, as previously said, to ensure I was getting a fair deal, and since the selling agent was representing the seller, I wanted my OWN agent.

    Bookmark   February 7, 2011 at 2:54PM
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Fori is not pleased

Thanks for the explanations, everyone. I don't know anything about this stuff, clearly. Last time we bought, we purchased an FSBO and added on to the asking price so that the sellers could pay our agent. But it was priced appropriately below market price so it didn't hurt.

Obviously this is different.

    Bookmark   February 7, 2011 at 3:27PM
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terriks

I don't know anything about this stuff, clearly.

Then you really should use an agent!

    Bookmark   February 7, 2011 at 4:00PM
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Fori is not pleased

I was planning on using an attorney for the transaction. I don't see what else a Realtor contributes.

    Bookmark   February 7, 2011 at 5:28PM
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kats_meow

Attorneys are experts in the law, often a specific area of law. I'm an attorney but not an expert in real estate for example. However, attorneys are not experts in acting as a buyer's real estate agent.

For example, when I've had a real estate agent representing my interests (yes, even though I'm an attorney I still use an agent), I've liked to pick someone familiar with the area. My agent might now that there is talk of building a nearby highway, or may know things about the neighborhood that is negative, or may even know something about the history of the house being sold. An attorney might be very knowledgeable about drafting agreements but not know anything about those things.

    Bookmark   February 7, 2011 at 5:44PM
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Fori is not pleased

I agree, Meow, that an agent knowing the area can be a huge benefit, and that's why I've not considered not using them in the past. (Pardon my negatives!) That's exactly the sort of expertise I needed. I don't need that this time because I'm familiar with the area.

But if there's no cost savings, I suppose I will follow the rules of the silly system and use an agent.

(If I went with an attorney, I would certainly use a real estate pro.)

    Bookmark   February 7, 2011 at 6:50PM
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ottawavalleygardener

Re "I suppose I will follow the rules of the silly system and use an agent" -- you're not obligated to do so, it's not a "rule". It's just common sense in most situations to do so. When my hubby & I separated, and he bought a house, he used the selling agent (didn't bother with a buyers agent) because we both know and trust this particular agent.

    Bookmark   February 7, 2011 at 7:15PM
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artemis78

You can also look into Redfin if they cover your area---they refund part of the commission to you after you close. I have no clue if you are at a disadvantage to have a Redfin agent going into a bidding war situation, though (not that those are that common these days anyway!)

    Bookmark   February 8, 2011 at 1:33AM
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lyfia

In my area it is beneficial to use an agent to find out things such as comps and sold history etc. of a house. It is not public record in my state so finding sales figures in the area etc. and being able to see trends in pricing etc.

    Bookmark   February 8, 2011 at 10:41AM
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linda117117

Do I really need to use an real estate agent to buy I was planning on using an attorney for the transaction. I don't see what else a Realtor contributes.
I guess I don't really know how it works. Hrmm. :/
I don't know anything about this stuff, clearly.

Do you really need us to answer this question for you? It seems as if you have already answered it yourself.

I've sold at least three homes to attorneys. They know the contract part of the transaction, but generally don't get involved or know the ropes of handling other things that can arise in a real estate transaction. Perhaps you will see the value of a buyers agent when the comps she pulls show the house to be overpriced by 20k and negotiates you a better deal.

I can't tell you how many people I represent as a buyers agent that simply believe the listing price is what they need to work off of. The house could be 50% overpriced and they are happy if they get 10% off. A good buyers agent can save you thousands.

    Bookmark   February 8, 2011 at 10:46AM
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Fori is not pleased

I understand that an agent can help with the transactional procedural end of things. They can know areas better than the buyer (not that that has been my experience, but it sounds reasonable). They find comps and help determine offer price (although they are biased against your interests by the commission system). They locate properties that may interest you.

What else do they do? Obviously they haven't been completely replaced by the internet, but surely they do more.

Do all Realtors feel that real estate attorneys are clueless? Do RE attorneys feel the same way about Realtors? :)

I don't mean to insult anyone's profession. But sometimes you need a rolled-up newspaper and not an exterminator.

    Bookmark   February 8, 2011 at 12:00PM
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larke

Realtors collect information to pass on to you about the properties (not everything is ever in the ads by a long shot, including disclosure statements about the structure), and they show you around the house explaining various things which you might otherwise not appreciate or register properly. They arrange for you to see the places at mutual workable times as well. Attorneys do the paperwork and give advice on the transactions, but they are not involved in the process until you decide to buy or sell and if they have opinions about the realtors, I'm sure they keep them to themselves as it probably wouldn't be ethical for them to get involved at that level.

    Bookmark   February 8, 2011 at 12:08PM
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terriks

Without Realtors and the system that they have set up, ie., the MLS, how would you find properties? Of course there are internet sites like Craigslist where people advertise their homes, but then you have to try to find all the sites that have homes listed. Then you have to try to set up appointments with individual sellers. Of course you will need to educate yourself about all of the RE laws so that you don't get taken advantage of.
Are there things that I would change about the system? Of course. First of all I would like to increase the professionalism of RE agents. I think that it is currently too easy to get a license, and that makes for too many agents fighting for too few clients, which forces them to spend a lot of time and money prospecting for clients rather than actually selling homes.

    Bookmark   February 8, 2011 at 12:44PM
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linda117117

(although they are biased against your interests by the commission system)

Sighhh, this is such an old argument. Did you realize, that a 10k price difference for you is about a $200 in a realtors pocket? The real estate business for most agents is about repeat business and referrals. It is not a one sale business. An agents business would be over before it started if that were the case.

To me, negotiating a sales price for my buyer is fierce competition. I do try to get them the lowest possible price. (unless of course, they are being totally unreasonable about the market value) but with concrete evidence of comps, the proof is in writing.

In regard to your other statement about the internet not yet replacing agents, how in the world do you think these homes get put on the internet? AGENTS are paying for you to have that info. Do you think realtor.com is free for agents? MLS? websites? All these things cost a great deal of money and its how we advertise our listings, its how you see them.

    Bookmark   February 8, 2011 at 3:05PM
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dash3108

love you, Linda117!!!! Thank you! I have worked very hard at my profession for over 6 years and enjoy helping people. Not EVERY job can be replaced by technology!

    Bookmark   February 8, 2011 at 4:25PM
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