Looking to buy a home: Realtor?
Figgy
Fighter of the night manChampion of the sunRegistered User regular
Fighter of the night manChampion of the sunRegistered User regular
I've been told they're a win-win situation since the buyer doesn't pay them. Is there any reason why I would want to avoid getting a Realtor?
Also, do I just call one up and say, "Hey, can you be my Realtor?" What is the usual process of setting this up?
Thanks home owners.
Also, do I just call one up and say, "Hey, can you be my Realtor?" What is the usual process of setting this up?
Thanks home owners.
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And yes, generally you'd just call up the office of one and ask for an appointment. Myself I'd say talk to friends, family and co-workers and get a reccomendation or two. Our realtor was one which our friends had used successfully, and we had a very pleasant experience.
Unless you get an buyer's realtor then they would be working for you and they SHOULD ethically have your best interest at heart, but they still get paid off commission (a percentage of the sale).
If they sell you their listing they get all of the commission, if they sell you another realtor's listing they split the commission. So obviously they stand to make more if they sell you their own listing.
*I have yet to buy a home so someone correct me if I'm wrong here.
You are a little off base. Realty is all about building relationships and maintaining a book off business. When a realtor works with you in terms of buying a house they are securing future business for themselves. The general idea is that any house you buy you're going to eventually sell, and likely contact your buying agent to be your selling agent. As such, they typically have your best interests in mind. If you don't think they do after you meet them then don't use them. You will find somebody who is completely genuine.
She didn't seem to mind, she really wanted the money as bidness is slow. I don't think I'd ever look for a house without a realtor, especially as a first time home buyer. She told us so many good things. She worked through all of the paperwork.
You will have to do your own research, look at your local listings and the area you want to move to and have the motivation and confidence to haggle and discuss a price with an owner.
It will take effort, but you can really save yourself some money.
In my area, selling with a realtor can be good and bad. They have a bad reputation around here for not actually doing a lot for you. My neighbors realtor brought maybe 5 or 6 people or couples to his house over a 3 month period.
He dropped the realtor and sold the house himself within 2 weeks.
These aren't typical results of course, just anecdote. My point is, if you can find a person selling their home personally, you can haggle a lot more comfortably and you'll more than likely get a better price than a house using a realtor since there's no commission to pay. If nothing else, you can factor that into your haggling. Worked for me.
You do technically pay a realtor, it's just built into the cost of the home, their commission on the sale... This is why they can sometimes bring the price down quitw a bit, or you'll see them in a fancy car the next day...
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Asking your friends and family for a recommendation is the absolute best way to find one. And yes, you just call their office and say "I'm looking to buy a home. So-and-so suggested you."
I'm actually buying a condo right now, but I lucked out since my cousin in a realtor. The same recommendation tactic also works for getting a mortgage company and a lawyer. Try and find an explicitly real estate lawyer. Trial lawyers tend to have the "me vs. you" attitude, which you don't want. You're cooperating with the seller to agree to terms and a price for something you want and they want to sell.
Get a buyers agent. They are contractually bound to represent your best interests.
You can avoid a realtor and buy a FSBO and you can thus avoid all the commissions, but you really don't want the largest transaction in your life to date, taking out the largest debt you've ever taken, to be done without some sort of guidance.
Anyway, not using a realtor might save you a few thousand dollars, depending on the price of the house, since the seller might be willing to offer you a concession to avoid paying the realtor fee (if he/she isn't using a realtor himself. Then it wouldn't matter.)
So while the money technically comes from the buyer, the seller is really the one paying because that's where the total is deducted from.
As an example, if you buy a house for $200k, you would pay closing costs of, say, $3000, out of your own pocket. Then the bank would hand a check of $200k to the seller. They would likely deduct any remaining principal on their mortgage so it would be less, but whatever. Then the seller would pay 6%, or $12k, to the realtors, and they would split it based on the contract (which varies).
So the purchase price of the house stays the same. Closing costs are in addition to the purchase price. Realtor fees come out of the seller's side, which is why some people sell without an agent (all those "For Sale By Owner" signs are to avoid the realtor fee).
Of course, the complicated nature of it is why, as a buyer, you should have a buyer's agent. They don't cost you anything, they'll find houses for you and happily show you houses you find on your own, and you can ask them building questions, mortgage questions, and so on. Just remember that they're supposed to be working for you, so if you ask them for advice and it doesn't jive with what you expect, feel free to ask around or do research to see if they're telling you the whole story. If you're skeptical, drop 'em -- just say "we decided we're not really interested in buying right now, sorry" and find another agent.
Just general scope like how many bedrooms, older, newer, suburban or urban. It'll help the Realtor refine their search.
Has anyone here read freakonomics? Generally, the buyer will win in this situation. The realtor gets, lets say, 3% of the sale, and if the sale is 100 000 (for simplicity sake) they get 3000$. But if they were to tell it for say, 110 000$ (which is a HUGE difference for the buyer), they will make only 300$ more. Not so significant.
It is much easier for them to sell it for 100 000$ than 110 000$, and thus takes less time. The longer it takes the more money they are also potentially losing out on selling other homes, and advertising this first one.
Using a realtor can save you money.
edit: it also shows why selling with a realtor can be bad, you lose money from sale and then from payment.