Why You Should Use A Buyer's Agent
You have options when it comes to real estate agents. Traditionally, a real estate agent works for the seller. However, these days you can obtain what is referred to as a buyer’s agent or a buyer’s broker. Getting your own agent is a good idea because when you’re making such a large purchase, you want to have someone who has been through the process before representing you and putting your interests first—not the seller’s. Your goals will be different from the seller’s in many ways; most notably, you’ll want to get the lowest possible price on the home, while the seller will want to get the highest price possible. If you use the seller’s agent, you’re putting yourself at a disadvantage.
In some states, you can even get a buyer’s agent who offers a commission rebate. The standard commission for real estate agents is 6%, and a small but growing number of agents will split that commission with you as an incentive to get you to work with them. On a $300,000 home, a 6% commission (which is always paid by the seller) would be $18,000. Using a buyer’s agent who splits his or her commission with you means your share would be $9,000. That’s not exactly pocket change. You can put that money towards closing costs, renovation costs, decorating costs, or towards your first few months of mortgage payments. Zip Realty's agents offer a rebate of 20%.
Since you’ll be spending a lot of time with your agent and trusting this person with the intimate details of your finances, it’s a good idea to interview several agents before signing a contract with one. You want to work with someone whom you trust and who is dedicated to helping you find the best home for your needs, not the first home that will earn him or her a commission or the home that will generate the highest commission. You don’t want to work with someone who will waste your time dragging you to homes that are listed at $350,000 when the upper limit of your price range is $300,000, or someone who shows you homes that only have one bathroom when you must have two. A good agent should not pressure you into buying something that isn’t right for your wants and needs.
The HGTV show Property Virgins offers a great example of an ideal real estate agent. Some of their other shows do not, though-agents routinely show their clients homes that are outside of their price range, and the show acts like this is acceptable! Perhaps those episodes were filmed before the housing bubble burst. I think we've all seen what happens when people are pushed into homes they can't afford.
Related Posts:
Property Virgins
Understanding Closing Costs
Housing and Net Worth
Why I Decided Not to Buy . . . At Least For Now
What is a home inspection and do you really need one?
Consider Buying a Fixer-Upper
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