Profile picture for jimrowe0

Why do I need a realtor?

Combining today's online tools with the ability to obtain mortage loans online, leads me to believe a realtor has little value.  If you have access a home inspector and real estate lawyer, why couldn't you navigate the home buying process alone?
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January 31 2012 - Northeast Raleigh
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Answers (85)

Profile picture for sunnyview
"If I as a seller didn't have to pay my Realtor, I would be willing to take less (the amount of the commission) for the home. "

I value a good agent's services too, but you make a good point. 
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March 02 2012
Profile picture for splintergrain
I am not nor have I ever been a Realtor.  I have used them in the past, and will continue to do so.  I do not have the time to become an expert myself, so I value their services.  With an investment as large as a home, I want to be sure my butt is covered! 

I do have a problem with the "as a buyer, it is no cost to you" line.  I don't know who you think you are kidding.  It does cost the buyer, as the seller has to take into account the commission when negotiating the purchase price.  If I as a seller didn't have to pay my Realtor, I would be willing to take less (the amount of the commission) for the home.

As a buyer, you WILL pay for the Realtor, but it is worth it! 
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March 01 2012
You are correct that with the internet nowadays you can do a lot of the home research and mortgage research online.  A realtor though is not a "home finder."  A good real estate is going to bring you a wealth of knowledge including house information, area information, mortgage options, as well as guide you through the entire home buying process.  Where a good real estate agent earns his/her commission is their negotiation skills.  Bottom line, if an agent can save you 20K on the total price of the home you wish to purchase, would you mind putting 1000 of that in their pocket.  Of course not.  On the flip side, if you are working with an agent who you dont feel is offering you all the services that I have described, maybe it's time to interview and see what other agents have to offer.
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March 01 2012
You are right.

Except...if you have never bought a home before, or have only bought one or two in your life, or don't have time to search for properties and set up showings, or understand building issues, or know every conceivable neighborhood that may possibly work for you, or if you want to be chauffeured around like royalty for a day.

Ask any do it yourselfer how their first deck building project went, or tiling job, or brake job, or window replacement job, and inevitably most will tell you they made a lot of mistakes. But if you ask them after their fourth or fifth time they are probably doing a decent job, albeit not perfect.

Considering how important a home purchase is, and how few most people actually make in their life, is it worth the one or two mistakes you are likely to make, cause they happen to 'newbies' all the time.

Finally, as a previous poster or two mentioned, the system is such that most sellers use realtors to sell their property so the commission is already negotiated with the seller's agent. If you don't use a buyer's agent, the seller's agent keeps the whole thing. They are most likely lying if they say you are getting a better price without a buyer's agent.

Might as well use what's already paid for.
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March 01 2012
I have a different view on real estate agents. The reason so many people feel they can do it themselves is because there are way too many part ime agents who do not take the time or sell enough homes to be good agents. The real estate commission in every state should make it mandatory for new agents to only  work full time and have no other employment taht results in more than say 20 hours a week. I have too many times have had to deal with agents who, while they may have had their license for a few years, still only have 1 or 2 transactions a year and I'm left to walk them through the process. I generally don't mind except for the agents who think just because they have a license they know it all.
Just a rant, take care
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February 29 2012
Instead of saying that a buyer's agent doesn't cost anything so you should use one, people should say, you are paying for a buyer's agent in most circumstances whether you use one or not, so you may as well have the benefit of one.

The owner of the home has already negotiated how much commission will be paid. If you use a buyer's agent he/she will be paid from that amount. If you don't use a buyer's agent, the seller's agent will keep all of the commission. So you might as well have the benefit of SOMEBODY in your corner!

You are paying for it....
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February 29 2012
Just wanted to throw my 6% in (lol) there is NO set commission. Never, not allowed. It is a Sherman Antitrust Act that strongly underlines that. Saying that because I noticed one of the responses state 6%..
Here's a link to help anyone. Commissions are negotiable.
http://en.wikipedia.org/wiki/Sherman_Antitrust_Act 
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February 29 2012
The right realtor can bring value to the selling and buying of a home. To most, this is a significant transaction that should be handle with care and consideration
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February 24 2012
Profile picture for jrtpapa
About the fact that the buyer does not pay realtor commission. In fact, when you buy, you will be an OWNER. That means that one day you (or your beneficiaries) will SELL. That means that you WILL pay a commission. You are just postponing it. You pay 0% comission when you buy and 6% when you sell. That averages to 3% each time.
It's similar to the idea that people with health insurance go to the doctor who orders an unnecessary MRI. They figure, sure, I'm not paying. But in fact, you are, implicitly, like all the rest of us. It's just not an immediate cost.
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February 24 2012
I totally agree with Steven's post. It doesn't cost you anything to have a buyer's agent, so why would you choose to go unrepresented? Also, a seasoned agent has completed hundreds of real estate transactions and most homeowners go through less than 10 in their lifetimes. Our experience gives us the ability to see issues that might come up and try to head them off before they arise. Also, I hate to say it, but sometimes personalities don't make the transaction easier. A buyer's agent will buffer you from that, so someone's lack of people skills won't inhibit your purchase. Again, it doesn't cost you anything to hire a buyer's agent, but it might cost you a lot if you don't.
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February 22 2012
The seller usually pays the agent's commission. Therefore, you get the benefit of their knowledge of the procedure without having to come out of pocket for their services. As a buyer, you will have to deal with the listing agent unless you find a for-sale-by-owner. In this case, the listing agent represents the seller. Therefore, he/she is looking to get the best deal for their client. Being unrepresented, you stand the chance of paying higher prices. Choosing a buyer's agent who is a member of the local MLS will save tons of time viewing homes due to the "showing instructions" for each property that is only available to agents. There are many reasons to find a good agent to assist you in the home buying process. A real estate transaction can be a very stressful situation. It is very beneficial to have someone on hand to handle the stressful parts especially if the service is at no cost to you.
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February 04 2012
Jim, sounds like your decision is made. I wish you the best of luck and I hope it works out for you. I'm hoping when you see comments from Realtors like myself you realize we personally have nothing to gain whichever you decide but we work hard and have pride in the service we provide and don't like when our value is minimized without really having a clear picture of all that we do.
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February 04 2012
Profile picture for Caveat Emptor
you can't buy a home online, well, you can, but that would make you an idiot.

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February 04 2012
Well, Jim's decided that an agent has little value, so nothing I say is going to dissuade him. Chances are, it will only strengthen his resolve. And the fact is - you can go it alone; you can take a guidebook with you to a major European capital, too - I've had better luck hiring guides when I get there.
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February 04 2012
Well, I think that was the point of the original post... why don't you give a couple samples of what might be missed if someone isn't paying attention?
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February 04 2012
Boy, do I have stories to tell, too.

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February 03 2012
When a neighbor of mine moved in a number of years ago, the agent never bothered to mention the utility contracts, nor assist with the process of getting accounts in the new owner's name.  The prior owner had notified the water, power, and gas companies, and trash service to discontinue service on the date of close of escrow.  So everything got locked out early on a Friday, and the new owner moved in Friday night with no water, gas, nor electricity.  And no ability to call any of these companies until Monday.  Not to mention, no telephone.  (People have cell phones now to address that issue).

So I ran them an extension cord, which they used an adapter to plug it into an exterior receptacle to back feed enough power for them to power a few lights and needed appliances, and I ran them a garden hose which they connected to their hose bib with one of the connection hoses for their washing machine, which got them through the weekend.

If they had an agent paying attention to details, the contracts for the utilities would have been in place a couple weeks earlier, with the start date the close of escrow.  The agent may have even picked up the required forms, assisted with filling them out, and make sure they were turned in promptly.  Often it can just be done by telephone, but if people don't have existing accounts, the utility companies sometimes need more documentation, or sometimes prepayment for a "turn on" service.

Another neighbor bought from their landlord when they had previously been renting.  They found that the partial illegal garage conversion and building addition without permit prevented them from getting an occupancy permit from the city for months.  They had to get plans prepared and submitted to the city, as well as get some walls and plumbing removed from the garage, before they could get the required occupancy permit.

It is the little things that cause the most frustration when people aren't aware of potential issues.  But even an agent with 17 years of experience may not have helped, depending on the details.
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February 03 2012
Profile picture for blub blub blub
There is so much more to buying/selling a house than just making an offer or getting access to it. There's setbacks, building codes, utility easements, radon mitigation, inspections, contract understanding/deadlines, loan approval, tax prorations the list goes on.

The agent should have knowledge of all these areas.  He/she should be following the transaction throughout the process to make sure the loan is going through, deadlines are met, issues are addressed before closing, etc,

There are so many issues that come up that the novice buyer/seller wouldn't know about.  An experienced agent has been through the process before and can look for things to come up that may be out of the norm or not customary in all areas.

This is why some agents only specialize in one area, Rules, codes, etc. can be quite different from town to town.  What's customary in one area may not apply the next town over.  Each town has different law/rules regarding the transferring of property.

A real estate agent is there if you want to use their service.  If you don't, that's fine, then don't.

But please don't belittle their usefulness if you have never bought or sold on your own.  You may be in for a little surprise.
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February 03 2012
Jim, I think you're making an assumption that the listing agent (97% chance in our area) will be willing to share their commission with you and be willing to gift you some cash.  I assume that is after you have had to ask them show you the house on their time... Keep in mind that many listing agents like myself have buyers agents that work for them that if taking the time to show you the house will expect be compensated.  I think you're assuming you will have access to forms designated for use by Realtors and members of the Bar Association.  Over the past 2 months we have been experiencing multiple offer situations on homes that are priced well (making it a real deal because priced right not because they haggled over commission).  Without an agent how do you plan to find gain access to homes?  Just yesterday I closed on a home that never hit the market because the investor selling knew I had a buyer looking in that area and price range and contacted me before the home was on MLS and it never hit MLS or Zillow.  I am not sure what your price range is but as another poster mentioned your time has to be worth something.  With over 100 hours of classes and over $1000 and background checks just to get your license and even more to join the Realtor Association and gain access to the MLS you are starting to really eat away at your "cash in your pocket" savings and adding some major liabilities.  However, you seem set that this is the best idea for you so as I said before... best wishes!
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February 03 2012
"So, you're in a profession where nine-year olds can perform as well as your worst practitioners . . . but people's lives depend on it." -

That's the nature of government and "business" for you.  You don't "get what you pay for".  Which is why quality work always sells itself, and why government agencies are required to check some of the work.  But the government is not liable for not catching the errors.
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February 02 2012
Well, redside, you bring up an interesting dilemma for the real estate professional, which is - will we be appreciated for making the job look easy?

Many of us, when we start to hit our stride in this business, look for ways to make it easy on our clients, to buffer the stress and make the process of home buyer or home selling as enjoyable as possible.

But more than a few times, I've heard people say out loud, "My agent hardly did anything." May-be. But at least sometimes, maybe not.

Anyway. The same goes for you as for Jim - really, we don't care if you want to buy without us, we really really really really don't. But I will tell you that it's not professional courtesy that makes us use agents when we buy out of area - a coffee card is courteous, too - and some of us use agents on our own transactions.
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February 02 2012
So, you're in a profession where nine-year olds can perform as well as your worst practitioners . . . but people's lives depend on it.

Oh-kay . . .
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February 02 2012
Profile picture for redsidem3
Here's my thoughts. Say you find a property, and it's exactly what you are looking for, and know the area, sale prices, etc. AND dont need any other advice etc.... Then why wouldn't you want to just write an offer yourself. It may be beneficial if you know what you are doing. And could save you some cash. With all the online tools nowadays and websites to browse for hours, why wouldn't you? I've flipped houses in the past, and have even  thought to myself how little of what the realtor actually did.
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February 02 2012
Absolutely!  But a typical amateur will take about 25 times as long, and will have more difficulty with the error checking.  Not to mention, there is a state licensing issue for several state required forms and other details.

But then I've seen the work of many licensed professionals in my field with 30+ years experience that could have been done better by a 4th grader.  It helps if one can read for details, and if they know a little bit about complex numbers.

Not to mention, people could die if I make mistakes that aren't caught.  I don't think that happens very often for Real Estate agents.
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February 02 2012
Really? Is that true in your line of work?
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February 02 2012
A dedicated though knowledgeable amateur that loves what they are doing and puts in the time is often better then many "professionals" that are only in it for the money.

It would be better than choosing someone that already intentionally disqualified themselves from representing you by their constant disagreements making it clear they are more likely to do what they want then what the client wants, and that they intentionally will annoy you to death with off topic discussions that have nothing to do with the stated objective.

If someone was really professional, they would make it clear what services they would provide that might not be provided by others and specifics of why what they offer would be a benefit to you.

Besides, just because a Realtor is willing to spend $175 to hear Eddie Van Halen, doesn't mean that someone else has any desire to hear him, nor that someone should allow the agent a sufficient commission from your personal cash to buy 30 Van Halen tickets.

Yes, experience counts for something, but experience isn't everything.
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February 02 2012
Well, it's like 160 hours of education in NC to get past the "provisional" broker's license . . . at some point, you have to value your time when assessing the value of obtaining a license.

Putting Jim aside for the moment, because as I said, life is short - if you're doing this because you think you would be as good at it as any other licensee . . . maybe you want to rethink that. Do you want to measure yourself against the worst licensee? Is it at least reasonable to think that when you're starting out on your first transaction, you might not know as much as someone who has done, oh, five or ten or twenty or fifty or two thousand transactions?

Really, how often do you hire a rank beginner? Do you pay him what you'd pay a seasoned pro? Well, if you're taking on the job to earn the pay of a seasoned pro, you're essentially hiring the newest and greenest agent/broker around and paying them (yourself) what you'd pay a seasoned pro.

Again - Jim just wants to do it, and that's a different thing. I play guitar, even though I'm never going to be Eddie Van Halen. (I also don't charge people $175 a ticket to hear me play, either).
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February 02 2012
"...which will require extensive schooling and 1000's of dollars." -

It appears this is intentional exaggeration. Typically, the requirements are
1) A High School Diploma or GED
2) Approximately 120 to 140 hours of "training"  (Small Fee).
3) A simple 1/2 day "test".  (Small fee)
4) a sponsoring broker
5) Annual errors/omissions insurance
6) Annual MLS membership fee.
7) Broker commission split.
8) Purchase of lock boxes, and lockbox access devise.
9) Most people have cars, computers, printers, and phones already, but they are business expenses.
10) If listing houses, some yard signs.

Of course, if someone really wanted to represent themself, they would probably want their broker license and not just an agent license.  So a bit more study and a second test, and a little more cost.

It still totals less than one year's errors and omissions insurance for most other licensed professions.  Even if it was $3k, that is still less than the sales commission for one typical transaction.
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February 02 2012
Well, they have to join the club. Real estate agents do not automatically become Realtors® when they get their license - they have to join and subscribe to the Code of Ethics.

Jim, go for it. Life is short, live it to the fullest. 
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February 02 2012
Profile picture for blub blub blub
If you have to research, educate yourself and take real estate classes to better understand the process, then isn't that becoming a realtor?
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February 02 2012
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