Profile picture for johndeere11

Why do I need a realtor?

Here is my question I am looking to buy a home and wondering why I would want a realtor to represent me in the buying process? Why wouldn't you want too go straight through the selling agent? The the sites I have looked at say it is such a great idea to have one and it doesnt cost me anything but I think it does. Say you want a house listed at $200,000 and offer $194,000 but then my agent gets 3% of the sale price (6,000 roughly) from the seller and the the sellers agent gets 3% of the sale price ($6,000 roughly) leaving the seller net of $182,000. But if I go through the sellers agent they basicall get thier 3% ($6000 roughly) and so the sellers net is $188,000 making it more appealing too accept my offer right? Besides realtor only need too take 60 hours of classes pass a test and they are liscenced. So if anybody can tell me why i need one or have any experience with buying a home without representation I would love an email or a reply on here or some good sites I should look at let me know!
  • January 11 2010 - Woodbury
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Answers (15)

If you go through the seller's agent, most likely, they will get to keep the entire commission. They have a contract with the seller to which you are not a party.

If your reasoning in not needing an agent is that the requirements of licensing are too lenient, then you fall into the category of person who "doesn't know what they don't know," and there is no way to get you up to speed in just a few paragraphs.

Your local large bookstore will have many shelves of books on real estate, it may be worthwhile to browse a few.
  • January 12 2010
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Profile picture for navydooood
It doesnt cost you any money and it helps you a lot! so why not?
  • January 12 2010
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Konstant:
Exactly. But the whole picture is a not easily sketched. The devil is in the details. Some of the greatest beneficiaries, benefit out of blind faith in the system. But blind faith in the system, also results in some of the most heinous abuses.

I guess the short answer, to the headline question is; because, to most people, time is money. And a good Agent will save you some of one, or the other, and probably, some of both.
  • January 12 2010
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Hamp:

I didn't mean to suggest it would be easy. In fact one of the, if not the biggest, reasons to have your own agent is the amount of time a buyer will save working with one rather than trying to work with a dozen or more agents.

My original comment was meant to dispell some of the other comments written as some sort of gospel.(see the fourth answer/response) I simply tried to present another thought and wish that more agents would present the full picture.
  • January 12 2010
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With all due to respect to jkonstant, this is meant to be thought provoking, on the op's behalf, and on the behalf of any observers, not necessarily argument provoking.

How would a Buyer, or johndeere11, find all the listings that have variable commission arrangements. I believe he would have to find an  Agent, to seek them out, thus thwarting his ability to capitalize on the existence, of the not so common, variable listing arrangement. He is going to have to enlist an Agent somehow. Then, if enlisted agent doesn't have a suitable listing for the buyer, that also has the variable commission structure. The Buyer can't save any commision, unless he starts over with a second listing agent, and goes through all of their listings they can double dip him on, etc.....He will get customer treatment all along, unless he is willing to commit to an agent. Once he commits he has ended the benefit, unless he buys one of his agents listings. The variable commission structure ruse, is very clever in this way.
  • January 12 2010
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Come on everybody. Why no mention of the increasing use of  "variable commission" where the listing agent/broker gets less if they bring the buyer. Commonly the 6% commission might be reduced to 4% making it very possible to save the buyer money while the agent/broker earn more themselves.

Although the listing agreement is between the agent/broker and the seller with commission terms spelled out, very often they will reduce it to make the deal if it is in their best financial interest. You may have to ask or bring it up so they know your thinking. Keep in mind that many if not most agents need permission from their broker which may or may not be given. The seller won't care as long as their bottom line is protected.

There are many reasons to have your own agent. The idea that you will not get a better deal if you don't have your own agent is simply not true. You may, you may not.

There are many good reasons to have your own agent.
  • January 12 2010
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Actually I have a cousin who purchased a home out of state and used a RE Lawyer. She did OK.
  • January 11 2010
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The payout to the buyers agent is atypically between 2.7 percent and 3 percent. In foreclosures and short sales the buyers agent frequently is paid 2.5 percent. Remember that the agent shares their commission with their broker, so it's not all profit. 
  • January 11 2010
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  • January 11 2010
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Profile picture for bagnn
Hi, so if you like 6 homes, you will go to 6 Realtors?
I believe it will be easier to work with one than with 6.

Also, in today's market there are many Short Sales, wouldn't you like to know ahead before you make a call?

Are you saying that one home is all you need to make a decision?

I am assuming you are pre approved, if not, go ahead, get pre approved.

Sometimes, listing agents have agreements on Same representation on a contract, but not very commun.

I think you should care about you than about the sellers.

Buy!

Benito.
  • January 11 2010
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Profile picture for johndeere11
So how much of the 6% would the buyers agent get?  If it is say 2 or 3% could the seller agent (company) say too the seller will take only 4% commission if you want too sell the house?
  • January 11 2010
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There are a number of reasons why you should work with a Realtor.  Here are a couple.  The seller has agreed to pay 6% to the listing agent to sell the house.  If you as a buyer were to go directly to the listing agent and buy the house, the listing agent will be representing both sides of the transaction and will get paid the 6%.  There is no savings for you and no added incentive for the sellers to accept your offer.

The listing agent's primary responsibility is to sell the house for the seller. As a buyer you won't have anyone acting exclusively on your behalf.  You will be at a disadvantage.  I could site a number of other reasons but I think these two alone point out why you should work with a Realtor to buy a house.

  • January 11 2010
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The seller has signed an agreement that states the total commission (6%) or whatever was negotiated. A Realtor has to do more than the original test, and education, we are required to complete 15 hours of continuing education every year. A buyers agent is going to work for you and not the seller in most cases, this is a huge advantage to you. You can certainly buy a home using the sellers agent, but you may be better off with a buyers agent.
  • January 11 2010
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The listing agent has signed a contract with the seller stating they will receive X percent of the sale price for selling their home. Say the contract is for 6 percent. If you rely on the listing agent as your representation there is nothing legally preventing the listing agent from keeping the entire 6 percent commission - as opposed to splitting it with a buyers agent.

Minnesota law requires that an agent that is representing both parties must inform both buyer and seller that they are representing both sides in a 'dual agency' agreement. If the seller declines  to participate in dual agency, that agent would be unable to represent you.

If listing agent does represent you, they will need to excuse themselves from participating in any strategies or negotiations for both sides as they have information that could materially affect the outcome for both sides.

Short answer: get yourself your own agent.
  • January 11 2010
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Chances are, in your scenario, the Seller's agent, would get 6%. You would get dual agent help, or no help at all, if you, or the Seller, refused to participate in dual agency. Seller's agents call it doubling up, getting both sides, double dipping. They love when it happens. You pass on a potential service, that could benefit you greatly, that is included in the price, and they benefit.

Stand by for furor.

Buy a FSBO!
  • January 11 2010
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