An emerging online tactic has some home buyers believing that they can figure out how to protect themselves from being taken advantage of during the home buying process by acting as their own ad hoc real estate agents. That is fine if the home buyers are licensed real estate agents and have had years of experience in assisting buyers; but, for the rest of us, that is a heavy load to carry during what can already be a stressful (good stress is still stress) adventure albeit exciting. So, the question naturally arises: “Do I need to use a real estate agent to work with me if I can go directly to the builder and negotiate my own deal on my behalf?” The short and long answers are “Yes!”
Yes! Get Yourself A Real Estate Agent. A word about real estate agents: They’re great. I recommend that all home buyers use an agent when they purchase or sell a home. Period. While the internet is a great tool and can help you get a ton of information, a real estate agent is a valuable asset when you’re going over contracts and gathering data for you while you’re getting your research together and even setting meetings with builders. A builder will take you more seriously if you’re working with an agent because the overwhelming majority of homes they sell (eight out of ten) will have an agent assisting the buyer on the deal. Most agents will appear with you at the closing table and answer any questions you have, and they have a way of making buyers feel secure as they move through this process.
The Monetary Benefits of Having A Real Estate Agent. There are also some monetary benefits to working with an agent. First, builders are reluctant to alienate agents with hard negotiating tactics or price gouging because they know that one bad experience with an agent could cost them an additional 8 to 10 sales in the next year. Agents talk to each other, and the last thing a builder can do is get a bad reputation. Second, the agent field is getting extremely competitive, and many agents will cut great deals with you to represent you. Some will sell your home for free if you let them represent you when you buy a home. Some will only charge you 1% and return the additional 2% to you. Some will work for 3%, but return all builder cash or additional commission to you. All will be bound to tell you what the builder is paying them. Find out what kind of deal they’ll offer you to represent them on a sale. Some agents won’t offer anything, but many will work for a reduced commission or will offer to return back any additional commission or bonus the builder is offering. Not all states allow agents to return or reduce commissions, but most (40) do. Working with an agent is no different from working with any other freelance vendor. Everything’s negotiable and remember, a little number like 1% or 2% may not sound like much, but on a $350,000 home every 1% you save on commission is $3,500 in your pocket or off the price of the home. If a builder is offering 5% commission, which many are doing these days, and your agent says they’ll do the deal for 2%, on that same home you’d be saving over $17,000 and that’s a lot of money. Find an agent you like and make your best deal with them. You can interview several before you pick the one you’ll eventually hire.
Real Estate Agents Work For You. If you secure a real estate agent, they are ethically bound to represent you and help you find the right home for you at the price you can afford. Even though the seller pays the real estate agent’s fee, the agent is there to help YOU find the home that you need within your budget. They will not talk you into fancy upgrades you may not be able to afford or talk you into buying into a community or school district that just doesn’t work for you or your family.
The agent fee is usually already built into the price and profit of the home and research shows that there is not much difference between the final price of the home regardless if the buyer has an agent or not.
So, get yourself a licensed, reputable real estate agent. You will have a seasoned expert to help you avoid making rushed decisions. Your home is your sanctuary and you should be able to take the time you need to make an informed-decision on the house that will become your home!