How important is it to have a buyer broker?

cathleen_ni_houlihanOctober 24, 2012

I have been looking for a summer place. I am looking for the right property and am flexible about the area. I have been searching a huge area (spanning 3 states) on the MLS. I have already contacted selling agents and gone to see several properties. None of them was right, but I wonder if I will be at a big disadvantage when it does come time to make an offer. I'd sure prefer to have comps in hand at least.

Have any of you bought a home without a buyer broker? Is there a big downside to not being represented?

Is there anything I can do to be better advised given that I am looking in more than one state?

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invisible_hand

The downside to not having a buyer's agent is that you have to DIY with regards to finding a property, evaluating comps, negotiating the deal and completing the paperwork. None of this is rocket science, but there are some pitfalls to be aware of.

The significant upside to not having a buyer's agent is that in multiple offer situations, the seller's agent is likely to advocate on your behalf with the seller because the seller's agent makes more money if you are the buyer.

If not comfortable completely doing it yourself, I would suggest searching the properties yourself and then involving a buyer's side agent for the specific property in question while being sure to negotiate a rebate from the buyer's agent to you given that you have already done the time consuming search process yourself.

    Bookmark   October 24, 2012 at 9:36AM
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weedyacres

For me, the disadvantage is greater if you don't know an area than if you do. A buyer's agent can give you the scoop about the different areas, and would know things about taxes, flood plains, neighborhoods, etc.

I'd be less worried about the paperwork. A decent real estate lawyer can make sure you're covered on that side for a few hundred dollars.

In the "could go either way" camp would be comps. A realtor can pull those for you, but they might be available online, allowing you to DIY. You could also find an appraiser to help you out, again for a few hundred dollars.

Up in the air would be the skill-dependent questions. If they're good, they could potentially negotiate a better deal for you. But plenty of agents are more offer-passer than negotiator.

    Bookmark   October 24, 2012 at 11:11AM
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cathleen_ni_houlihan

Thanks for your thoughts so far. I hadn't considered that there might be an upside to not having a buyer broker!

Both of you mentioned that I might be able to get the comps myself. Do you know how? I thought that I couldn't get them without a broker, but I'd have no problem doing it myself if I knew where to look.

    Bookmark   October 24, 2012 at 12:36PM
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kirkhall

Go to any real estate website (johnlscott, cbbain, windermere, redfin, etc, etc) and do a search for similar homes/properties in the area you are looking to buy that have SOLD. (you'll have to check the box for Sold properties rather than active properties).

    Bookmark   October 24, 2012 at 1:14PM
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weedyacres

It's possible that redfin doesn't serve the area you're looking at. It just has larger metropolitan areas. I get my comps off local government websites.

Google "whatever county assessor" and see if they've put their info online. My last county and current county (though not my future county) have the sales history, plus lots of other pertinent facts about the house (sf, year built, # baths, lot size, etc.), of all properties in the county.

    Bookmark   October 24, 2012 at 2:09PM
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terriks

You can also get sold comparables on Realtor.com. Where it says "Homes for Sale" there is a drop down menu with the option of "Recently Sold" that you can search.

    Bookmark   October 24, 2012 at 2:17PM
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invisible_hand

Note that public listings of recent sales often do not include seller concessions on closing costs, so may be a bit overstated (to the benefit of future sellers and realtors in the area).

I wouldn't get too hung up on comps - it is pretty easy to determine max price based on listings of similar homes (check Zillow) less typical discount (5% - 10% in many areas), and to estimate min price based on recent sales. In any case, the final price comes down to what you are willing to pay vs. what the seller is willing to take. If you take out a mortgage, you are somewhat protected from massively overpaying vs. comps by the appraisal process.

    Bookmark   October 24, 2012 at 5:11PM
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