You may be wondering should I use a realtor to buy to buy a new home?
Do I need a real estate agent or can we buy a home without one?
And….
Do real estate agents deserve their bad reputation?
The answer is maybe.
There are a lot of real estate agents out there. Think you don’t know any? Just put up a Facebook status asking for recommendations and you will see referrals and offers of representation coming at you at Mach 2! I recently had a friend that was just looking to gather information for the home buying process do exactly this on his Facebook page. The mauling and hassling he experienced soon after was so overwhelming that he ended up passing on the home buying experience altogether.
Most homes in the United States are with an agent representing the seller, and another representing the buyer. The typical commission structure for these agents requires about 6% of the sales price, with each taking 3%.
For example, if you sell your house for $300,000 the buyer’s agent will walk away with $9,000, and the seller’s agent will walk away with $9,000, leaving the seller will be left with $282,000 (this ignores closing costs which usually average another 1-2% and could take another $4,500 away from the proceeds as well as taxes if applicable).
Do those commission rates seem too high for you? Many people think that real estate agents get paid too much for the amount of work they do. The role of a buying agent typically involves driving buyers through neighborhoods, phone call negotiations, and walking you through a bunch of forms with your name written in.
The role of a selling agent typically involves taking pictures of your house, posting them online, maybe hosting and open house, and then finishing up the process with some quick phone calls and form paperwork. Many buyers and sellers are pushing back and refusing to use an agent, and are instead using a website like ForSaleByOwner.com and paying an attorney for the paperwork.
So what is the best?
Unfortunately the answer varies base on individual situations, but before making your decision there are a few other benefits of having a real estate agent that you should be aware of.
If you do decide to go with an agent, make sure they are experienced and can help in the ways listed below.
1Top Things a Real Estate Agent Can Actually Help With
Staging Your Home For Sale
Are you bad at interior design? Maybe you think you are good at interior design but you need someone to politely tell you that you aren’t.
There is a science to properly staging your home; homes that are properly staged typically end up selling for 10% more!
Homes that are properly staged typically end up selling for 10% more!
This can be a big increase for the limited effort and expense required. A good agent knows exactly how your house should be set up, what should be thrown in storage, and what basic features should be upgraded. With the last house we sold we thought we needed to change out some of the flooring, but our agent convinced us to give it a good cleaning instead. We think her advice paid off as we had 4 offers within the first 36 hours, with two of them being over our list price.
Also, your agent should be able to bring in a professional photographer to take pictures of your home. Good pictures of your home are like getting dressed up for your first date. You wouldn’t wear the sweats and the middle school t-shirt on your first date, so why show pictures with cluttered furniture and dingy lighting!
2Contacts/Paying for Repairs/Upgrades
Maybe your agent tells you that you absolutely need to need to replace your carpet, or you’ve sold your house and your inspection came back with a list of repairs that you have to do. A good agent will have contacts that can get these things done cheap. Some agents will even be willing to pay for these repairs and get paid back out of the proceeds at the time of the sale. When we bought our current house we saw in the settlement statement that the listing agent put $5,000 of her own money into repairs before we bought.
3Market Awareness
Maybe you think that you know the area you want to live in, but not having an expert can be a big risk. We considered buying a house in a beautiful neighborhood, only to be warned by a real estate agent that there was a rock quarry right next door that made loud noises and had big trucks driving back and forth all day. This is especially valuable if you are moving to a new city as local knowledge of drive times, school districts, and crime trends are super important.
4Lender Connections
I thought we had gotten good quotes for mortgage rates, but our agent encouraged us to get a quote from a different company. Even though the rate the offered was the same as the one we previously had, the new company charges $4,000 less in closing costs. Aside from price, your agent can know what lenders will be able to meet a specific closing deadline, and which ones are likely to delay. There is nothing more stressful than having a closing delayed because of a lender and not being sure if the deal will go through or not.
5Negotiations
Some agents give the rest a bad reputation for trying to close the deal and get their commission, rather than fighting to get their clients the best possible deal. If you absolutely fall in love with a house and want it all costs, it is best to have someone who can approach with a much more neutral approach to keep the price from getting driven up.
A good agent can also make sure to get you everything that should or could come with the house, appliances, repair manuals, or even furniture, or could even subtly include you being able to leave that humongous piano you want nothing to do with anymore.
I recommend that everyone careful consider their individual situation when deciding to hire a real estate agent or not.
If you are going to go with one, make sure to interview them ahead of time to make sure they can provide the necessary help, and aren’t going to pressure you into a deal that isn’t best for you. But most importantly, if you don’t want the house be willing to walk away, even if you feel bad for the agent not getting any commission.
It is not worth buying a house you don’t want!
Note – We were lucky to find an AMAZING real estate agent that wasn’t pushy or scammy at all. If you are looking for a good one in Las Vegas email me at [email protected] and I will give you her information!
