Archive for April, 2014

WHY BUY A HOME FROM A LISTING AGENT?

by: Maria Hass

There are many ways to find a home to purchase. The most popular way is through a buyer’s Realtor.

However, when purchasing a newly-built home, buyers typically rely on the builder’s Realtor to help them close the deal. It is rare to find this type of arrangement with resale homes. Usually, a buyer hires a buyer’s Realtor to show them resale properties and help them negotiate the best deal on the property they choose.

I recently came across a buyer who said he preferred to find a home himself. He drove around the area, called the number on the sign to see if the home was available, scheduled a showing to see the home and instructed the listing agent to write up the offer to buy the house.

This is certainly fine to do. But it is good to know what are you gaining and losing if you decide to purchase your home by yourself without a buyer’s Realtor.

Why do some buyers “Do it alone”?

Advantages:

1. Flexible Schedule – You are free to look at houses anytime, any day you want based on your own schedule. No having to coordinate with a Realtor.

2. No Pressure – You don’t feel obligated to purchase a home because you’re represented by a Realtor.

3.Commission Structure – If the buyer goes directly to the listing agent, the buyer is more likely to get the house. It is called “Commission Incentive.” The listing agent gets an additional commission of 2-3 percent for securing an able buyer. However, the listing agent’s liability goes up because he has a fiduciary duty to both parties. In multiple offer situations, under the National Association of Realtors (NAR) Code of Ethics, the listing agent MUST present ALL offers to the seller and the seller decides which of those offers is best to accept. If a listing agent fails to submit ALL offers, it is a violation of fiduciary responsibilities, subject to suspension or other appropriate sanctions.

Disadvantages:

1. No Buyer’s Representation – The listing agent becomes a dual representative and is supposed to conduct the deal in a neutral and fair manner. The buyer is to determine a price for the home based on his own comparables. However, online market values of homes such as Zillow.com and Trulia.com are NOT accurate. The figures are based on automatic computations, without visiting each house. Online home values don’t consider lot size, amenities such as fireplaces, upgrades, views, noise level, construction, type of architecture, marketability, competition, and so on.

2. Negotiation – The buyer will have to negotiate the best deal all alone. In most cases, an experienced and knowledgeable Realtor can save you more money in negotiations than you’ll spend on having their competent representation. Good Realtors know what to ask or say, how to ask and when to ask.

3. Emotional Attachment – The buyer may pay more for the house if he shows too much excitement about getting the house. A good Realtor will be able to mask this emotion and negotiate a better deal than if the buyer were to do it himself.

4. Limited Homes – The inventory of homes is limited to what you can visit. Realtors pay to have access to MLS, which provides up-to-the-minute inventory updates.

5. Fast Market – In a fast-moving market, it will be difficult for a buyer not using a Realtor to find a home. Most homes are taken by buyers with Realtors who have access to the latest inventory.

Before looking to purchase your next home, consider this information carefully. It just might help you secure a great home at a better price and eliminate frustration that comes with “doing it alone.”

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April 16, 2014 at 11:53 am Leave a comment


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