Are there any benefits to having a real-estate broker when buying?
July 10, 2015 6:25 AM Subscribe
I've been looking for a place to buy. At first I was just visiting open houses, but then I decided to use a broker because I thought they could show me listings that I couldn't find myself.
And to my surprise that turned out completely wrong. While using my broker he only gave me the same exact listings I was easily able to find myself...one or two days AFTER I had already found it online. So I figured I'd stop using him.
What's the point of using a broker then if they have access to the same listings I do as a regular joe? I've been finding the market really slow to the point where I think I'm just going to end up renting again this year because so few places are available in the neighborhood I'm looking. And yet I'm told that the summer is usually where there are the most available listings. This is very disheartening.
And to my surprise that turned out completely wrong. While using my broker he only gave me the same exact listings I was easily able to find myself...one or two days AFTER I had already found it online. So I figured I'd stop using him.
What's the point of using a broker then if they have access to the same listings I do as a regular joe? I've been finding the market really slow to the point where I think I'm just going to end up renting again this year because so few places are available in the neighborhood I'm looking. And yet I'm told that the summer is usually where there are the most available listings. This is very disheartening.
There is sooo much more that a realtor does other than help you find the house. Sure, with the internet, everyone is able to shop for houses from home, in fact I found my home on realtor.com, told my realtor about it and he took care of everything else. And there is a lot of everything else. He was able to make calls to view other homes and get access to lockbox keys, do ALL the paperwork (aside from the mortgage application)- and there is a lot, helped with home inspection questions, helped me haggle back and forth for a price, and followed through till closing. If you've never bought a house before, I personally think you'd be putting yourself at a big disadvantage to not have a realtor.
FWIW, I was on realtor.com the other day just looking around and I too noticed the inventory rather limited for my SE Pennsylvania area. May be a trend?
posted by NoraCharles at 6:49 AM on July 10, 2015 [2 favorites]
FWIW, I was on realtor.com the other day just looking around and I too noticed the inventory rather limited for my SE Pennsylvania area. May be a trend?
posted by NoraCharles at 6:49 AM on July 10, 2015 [2 favorites]
We felt that way at the beginning of the process too.
Yeah, there's quite a bit more than a realtor does. In our case, our realtor found a house for us that hadn't hit the market yet. She had a client from a couple years ago that was looking to sell their house, but because of a new baby, didn't want to get the house ready for showing it a bunch. Our realtor told them that she had someone in mind, and we ended up looking at it that afternoon. After that, our realtor passed us onto her partner, because she couldn't represent both of us. Then we put in an offer, and they accepted it. Under the "New realtor" during the inspection period we found the roof needed to be replaced, and they just offered to do it before we moved in. It was great!
We live in Portland, and the market is insanely aggressive here…people offering cash, bidding up insane amounts, offering the blood of virgins and stuff. Its INSANE. It saved us a crazy amount of hassle. Based on the comps in the area, as well as the appraisal, our estimate is that she saved us $40-50,000 on our house.
We never would have found that house on our own, because it was never even on the market.
I've been finding the market really slow to the point where I think I'm just going to end up renting again this year because so few places are available in the neighborhood I'm looking. And yet I'm told that the summer is usually where there are the most available listings. This is very disheartening.
This has nothing to do with your realtor, but more your local market. Stock is tight in most markets right now. In popular, nice places, its even worse. Finding a realtor who's not going to bullshit you into 'you're going to find your dream home!' was really important for us. Our realtor basically told us many, many times, "nope. that's not going to work for x, y, and z reasons.' And that ended up saving us a TON of hassle down the line.
posted by furnace.heart at 7:02 AM on July 10, 2015 [1 favorite]
Yeah, there's quite a bit more than a realtor does. In our case, our realtor found a house for us that hadn't hit the market yet. She had a client from a couple years ago that was looking to sell their house, but because of a new baby, didn't want to get the house ready for showing it a bunch. Our realtor told them that she had someone in mind, and we ended up looking at it that afternoon. After that, our realtor passed us onto her partner, because she couldn't represent both of us. Then we put in an offer, and they accepted it. Under the "New realtor" during the inspection period we found the roof needed to be replaced, and they just offered to do it before we moved in. It was great!
We live in Portland, and the market is insanely aggressive here…people offering cash, bidding up insane amounts, offering the blood of virgins and stuff. Its INSANE. It saved us a crazy amount of hassle. Based on the comps in the area, as well as the appraisal, our estimate is that she saved us $40-50,000 on our house.
We never would have found that house on our own, because it was never even on the market.
I've been finding the market really slow to the point where I think I'm just going to end up renting again this year because so few places are available in the neighborhood I'm looking. And yet I'm told that the summer is usually where there are the most available listings. This is very disheartening.
This has nothing to do with your realtor, but more your local market. Stock is tight in most markets right now. In popular, nice places, its even worse. Finding a realtor who's not going to bullshit you into 'you're going to find your dream home!' was really important for us. Our realtor basically told us many, many times, "nope. that's not going to work for x, y, and z reasons.' And that ended up saving us a TON of hassle down the line.
posted by furnace.heart at 7:02 AM on July 10, 2015 [1 favorite]
If possible find a buyer's agent that represents buyers ONLY.
posted by vrakatar at 7:29 AM on July 10, 2015 [1 favorite]
posted by vrakatar at 7:29 AM on July 10, 2015 [1 favorite]
A bad broker basically just lets you into houses that you find on the internet. Which is still valuable, since open houses are not that frequent.
A good broker knows the town, knows the history of specific houses and previous sales, and knows what houses are going on sale before they do (because the person was probably shopping around for a broker.)
The worst part is that they both get the same commission.
posted by smackfu at 7:37 AM on July 10, 2015 [3 favorites]
A good broker knows the town, knows the history of specific houses and previous sales, and knows what houses are going on sale before they do (because the person was probably shopping around for a broker.)
The worst part is that they both get the same commission.
posted by smackfu at 7:37 AM on July 10, 2015 [3 favorites]
(Also, it can be tough working with a real estate agent if you are what I would call an "undermotivated buyer." Someone who doesn't really *need* to buy a new house anytime soon. Most people have some time-based motive to buy a house, like new baby or a new job, that means they need to buy the best of what's out there. They tend to get the attention of the real estate agents.)
posted by smackfu at 7:40 AM on July 10, 2015
posted by smackfu at 7:40 AM on July 10, 2015
The real estate agent can also give referrals.
Our realtor set us up with a lawyer and supplied us with questions to ask about tax credits, ownership agreements, and condo financial statements.
He also set us up with a banker who was able to offer us a discounted mortgage. (And he steered us away from a different bank that had very high fees that were disguised in a sneaky way that we wouldn't have known how to identify.)
He also connected us with a good-quality contractor who lived in our building, who was able to do some renovations for us.
I suppose it depends on your personality and situation and how much you trust the realtor. We were under a time crunch and couldn't get time off work, so we couldn't leisurely shop around and do our own research. We wanted to be guided and told "go here" and "ask this" and "don't agree to that" and his experience and contacts were perfect.
posted by cranberrymonger at 7:52 AM on July 10, 2015 [1 favorite]
Our realtor set us up with a lawyer and supplied us with questions to ask about tax credits, ownership agreements, and condo financial statements.
He also set us up with a banker who was able to offer us a discounted mortgage. (And he steered us away from a different bank that had very high fees that were disguised in a sneaky way that we wouldn't have known how to identify.)
He also connected us with a good-quality contractor who lived in our building, who was able to do some renovations for us.
I suppose it depends on your personality and situation and how much you trust the realtor. We were under a time crunch and couldn't get time off work, so we couldn't leisurely shop around and do our own research. We wanted to be guided and told "go here" and "ask this" and "don't agree to that" and his experience and contacts were perfect.
posted by cranberrymonger at 7:52 AM on July 10, 2015 [1 favorite]
Finding a home to bid on is only the beginning of the process. In many cases, it is an emotional process, especially for the sellers, if the house in question has been their primary residence for any significant length of time. For both parties, it is a financially expensive transaction. Not having to deal directly with the sellers -- maybe not even meeting them until the closing -- can make the whole thing so much less stressful.
posted by merejane at 7:56 AM on July 10, 2015 [1 favorite]
posted by merejane at 7:56 AM on July 10, 2015 [1 favorite]
Seconding all the previous posters. Not every house listed has an Open House, if you find a really good broker who knows your town super well and has listened to your needs and wants, they tip you off on houses that meet your criteria before they even go on the market (this happened with two properties we looked at). If it comes to bidding for a property, they are there to represent you. Again, if you get a great broker, they will also know very good lawyers, contractors, mortgage brokers, etc. Sure, they get paid by commission, but I cannot stress enough there are really super duper agents out there who will genuinely listen to you. Take the time and find one!
Best of luck! I hope you find a lovely place !
posted by Kitteh at 8:38 AM on July 10, 2015
Best of luck! I hope you find a lovely place !
posted by Kitteh at 8:38 AM on July 10, 2015
My mom (who has bought and sold several houses) always says that there's not REALLY such a thing as a buyer's agent when it comes to the actual sale itself because the buyer's agent is very invested in getting a sale to go through because they get commission, same as the seller's agent. I think she was disappointed in how "her" agents didn't help advocate for her needs in the buying process as much as she'd have liked.
posted by needs more cowbell at 1:59 PM on July 10, 2015
posted by needs more cowbell at 1:59 PM on July 10, 2015
Yeah, it's best to put a layer between you and the seller when the negotiations start happening. The agent can say "the buyer wants" without it being personal.
I was not exactly a huge fan of my buyer's agents' technical skills. I caught a couple of errors in the paperwork, an issue in the seller's disclosure, a deadline we were about to miss that the agent was incorrect about... Our first agent tried to talk us out of doing certain inspections, then tried to justify when we found a problem. "Well, all houses are going to..." etc. So don't make the mistake of thinking the agent is your attack dog like a lawyer. They have their own motivations that aren't always 100% the same as yours.
But overall I think it was worth it to not have to haggle personally with the sellers, run paperwork back and forth, and arrange all the closing stuff myself.
posted by ctmf at 2:22 PM on July 10, 2015
I was not exactly a huge fan of my buyer's agents' technical skills. I caught a couple of errors in the paperwork, an issue in the seller's disclosure, a deadline we were about to miss that the agent was incorrect about... Our first agent tried to talk us out of doing certain inspections, then tried to justify when we found a problem. "Well, all houses are going to..." etc. So don't make the mistake of thinking the agent is your attack dog like a lawyer. They have their own motivations that aren't always 100% the same as yours.
But overall I think it was worth it to not have to haggle personally with the sellers, run paperwork back and forth, and arrange all the closing stuff myself.
posted by ctmf at 2:22 PM on July 10, 2015
Twice we used a broker that we knew and trusted to help us buy houses that we found on our own. In both cases, the seller's agent was either worthless (an out-of-town relative) or nonexistent (FSBO) and our guy really made a big difference in making sure the sale happened. He not only presented our bid but did a lot of work to help coordinate the closing process - finding inspectors, making sure work got done, dealing with buyers around contingencies etc. He also coached us through the process - letting us know what needed to be done next and helping us understand the choices we were making. In some markets, I know it is customary to involve an attorney in the process and she might do some of the hand-holding that our agent so YMMV.
posted by metahawk at 2:28 PM on July 10, 2015
posted by metahawk at 2:28 PM on July 10, 2015
I used a buyer's agent when I bought my house. She was a big help and if I ever buy another house, I will have a broker.
On the other hand, I didn't take all of her advice, and that's a good thing.
I didn't like the mortgage broker she recommended, who kept urging me to get an ARM. I finally told her if she said ARM to me one more time I'd find another broker.
She warned me that this was a dangerous neighborhood and I should get a steel security door and/or a gun. I've been here 12 years and safety's never been an issue. So much for knowing the neighborhood.
She recommended an inspector who missed some really major structural problems. Luckily they were taken care of by a development grant I qualified for, but if that had not happened I could have been stuck with a condemned property.
My advice would be to use a buyer's agent to find and show you houses, be a buffer in negotiations, and help with paperwork, but take her advice and her recommendations with a large grain of salt.
posted by caryatid at 5:58 PM on July 10, 2015
On the other hand, I didn't take all of her advice, and that's a good thing.
I didn't like the mortgage broker she recommended, who kept urging me to get an ARM. I finally told her if she said ARM to me one more time I'd find another broker.
She warned me that this was a dangerous neighborhood and I should get a steel security door and/or a gun. I've been here 12 years and safety's never been an issue. So much for knowing the neighborhood.
She recommended an inspector who missed some really major structural problems. Luckily they were taken care of by a development grant I qualified for, but if that had not happened I could have been stuck with a condemned property.
My advice would be to use a buyer's agent to find and show you houses, be a buffer in negotiations, and help with paperwork, but take her advice and her recommendations with a large grain of salt.
posted by caryatid at 5:58 PM on July 10, 2015
The other posters have done a great job of covering the things a realtor do for you besides finding the listing, so no need to pile on there. I'll just mention that the sellers are already working on the assumption that they are giving up 6% to cover the agent's fees. So my question would be, how are you going to claw back the 3% if you represent yourself?
posted by BlueTongueLizard at 6:04 PM on July 10, 2015
posted by BlueTongueLizard at 6:04 PM on July 10, 2015
Soapbox: Real estate agents have a monopoly on listings, which allows them to charge a commission that is way in excess of any services they provide. Monopolies create inefficiencies and inequities in any market. Basing compensation on the cost of the home makes no sense at all; it is effectively a tax on the housing market that is collected the realtors rather than the government.
The fact that they get paid by commission also means that they have an incentive to make a deal. Any deal. And a deal is more likely when the buyer bids high and the seller accepts low. So your seller's agent has an incentive for you to pay as much as possible in order to maximize the chances of a sale going through. Once the sale happens, agents have virtually no liability. Fortunately, there seems to be a growing "grey market" in houses that avoids the Realtors.
Now, the agent you find may not be actively evil. Some agents are nice people and manage to suppress those incentive and act in the interests of their clients, and provide some value. But never as much as they are paid.
Conclusion: if you can avoid using a realtor, and making a deal directly with the seller with the help of a lawyer, both of you will be better off.
posted by RandlePatrickMcMurphy at 4:43 PM on July 11, 2015 [1 favorite]
The fact that they get paid by commission also means that they have an incentive to make a deal. Any deal. And a deal is more likely when the buyer bids high and the seller accepts low. So your seller's agent has an incentive for you to pay as much as possible in order to maximize the chances of a sale going through. Once the sale happens, agents have virtually no liability. Fortunately, there seems to be a growing "grey market" in houses that avoids the Realtors.
Now, the agent you find may not be actively evil. Some agents are nice people and manage to suppress those incentive and act in the interests of their clients, and provide some value. But never as much as they are paid.
Conclusion: if you can avoid using a realtor, and making a deal directly with the seller with the help of a lawyer, both of you will be better off.
posted by RandlePatrickMcMurphy at 4:43 PM on July 11, 2015 [1 favorite]
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posted by miyabo at 6:48 AM on July 10, 2015 [2 favorites]