Q. I'm thinking about buying a home but was just wondering if I really need a real estate agent?
A. In most cases there is NO COST to having an agent represent you as a buyer and you are fully protected. Even if you are considering buying a home that is for sale by owner you would be wise to have an agent protect your interests and negotiate on your behalf so that you are removed from having to negotiate with the seller. It is a well known fact that when sellers and buyers meet, there is almost always friction between the parties and they both tend to unknowingly compromise their negotiating positions. There are hoards of cases where buyer's with no representation ended up paying way too much for their home. There are also many cases where sellers decided to sell their home on their own and ended up getting way less than they should have. Quite often buyers & sellers think they know what the market value is. Knowing what a home is listed for or even what it sold for are only small bits of evidence of market value. Your next door neighbor may have listed his home for $400,000 and ended up selling it for $385,000 "on paper". Is the market value $385,000? Not necessarily! The reality could be that the buyer asked for $20,000 "cash back" upon completion or maybe the seller "took back" part of the purchase price in the form of a 2nd mortgage to the tune of $50,000. Unless you know all the terms of the vendor take back and you're really good at math you won't know what the effective purchase price was. There really is no way of knowing what the market value is unless you know ALL the facts and you can interpret ALL the facts accurately.
CONCLUSION ~ Hire a dedicated, knowledgeable real estate agent to protect YOUR interests.
Foreclosures ~
Q. How do you Realtors find out about Foreclosures? Also, would you let me know if you find out about one so I can scoop it up right away?
A. We find out about them from various sources but let me point out right away that knowing about them as soon as they hit the market won’t actually guarantee that you will be the successful purchaser. I’ll explain below.
Answer to the 1st part of your question...
Sometimes we hear about them simply because we’re in the business of knowing what’s out there. Mortgage Brokers may pass along our name to the lenders or we might be called directly from the paralegal handling the foreclosure.
About Foreclosures...
They definitely come with a fair bit of risk to you (the buyer), in fact when Realtors write up listing agreements for foreclosures the lawyers remove most of the standard protections that we have in our contracts so that the buyer assumes all the risk. Lenders are not in the business of selling homes and they don’t want to be either so they remove all risk from themselves. When you decide to write an offer on a foreclosure you must have a subject free offer (only subject to court approval) before they will even set a court date. So in essence you will need to do all your homework before you are able to get the ball rolling. You’ll need to do an inspection, make sure your financing is approved, read and approve the title, check to see if the property in insurable, etc. Once that is all done and you bring a clean offer with no subjects you can then get a court date set. On the day of court you could possibly still end up losing out to another buyer as the courts will usually entertain other offers at that time. Their goal is to get as much as they can so they can pay out all the debts. If you are prepared to take all the risks then it is feasible to get a good deal on a property but it’s not for the faint of heart.
Commissions...
Q. Isn't in true that real estate agents get paid way too much? Wouldn't I be better off just trying to sell my home on my own or with one of these "for sale by owner" companies?
A. On the surface it may appear that way but it's simply because people don't see all the work that a real estate agent actually does. We really don't just stick a sign in the yard and kick back and wait for the phone to ring! As a Real Estate Agent I sure wish I got paid for all the work I did but the fact is that we do a ton of work that we never get paid for. Many times a buyer will call and ask us to show them several properties and make inquiries for several months and in the end they change their mind or buy a home directly through the listing realtor - OUCH! I would encourage you to take a look at the article that was written by Mike Holmes on the "Buying Tips" page of this website title "Cutting off a mule's ear doesn't make it a horse. The article was featured in the July 2010 edition of "Westshore Living".
