Buying a home is complicated, expensive and time-consuming. Most buyers and sellers welcome help from a real estate agent to walk them through the process, handle the paperwork and fight any battles that may arise.
Since the commission for the buyer’s agent is typically paid by the seller, “it’s penny-wise and pound-foolish for a buyer not to use an agent,” Rubida said.
But in an age of Redfin, Zestimates and online contracts, isn’t all the information you need on the Internet? Seriously, why use an agent?
Time, for one thing.
“While people are at work, we’re working: coordinating with lenders, title companies, insurance companies, surveyors, home inspectors, etc. Those things take an exorbitant amount of time,” said Mark Middendorf, also a Long & Foster agent.
As real estate has become more complicated, the value of using an agent has grown.
“The hard part is not finding the property, it’s getting through the transaction without a major financial, emotional or procedural error,” Rubida said.
“There are 101 things that can go wrong in a real estate transaction, and it’s your agent’s job to fix them,” said Middendorf. “People are so lawsuit-happy these days. Your agent is the person who protects you through the whole transaction.”
Experience and ability vary among agents. How do you find the best one for you?
Talk to friends. Ask whether they would recommend their agent and why. Specific examples help you to know the agent’s strengths. Some agents love working with first-time buyers. Others connect especially well with those prioritizing good schools or military relocations. An agent who is ideal for some people may not be best for you.
Interview agents. Meet with your top choices in your home, at the real estate office or a coffee shop. Buying a home is such a personal decision that the better you and your agent know each other, the better she can help you find the exact home you want. “Sadly, some buyers’ interviews consist of basically one question: How much of a rebate will I get if I use your services? Ouch. Really bad idea,” Rubida said. Ask how many years of full-time experience she has, why she chose real estate as a career and what are her three strongest attributes when representing a client.
Pay attention to credentials. Check the agent’s website or business card for his or her license. Search your state’s website for licensing or professional and occupational regulation.
A top-selling agent is not necessarily the best agent for you. An agent with an impressive sales record might be quick at finalizing transactions. If you are in a hurry and need to get into a home fast, he may be perfect for you. However, he may not be the agent who is willing to tour 35 houses until you find the perfect fit or patiently hold your hand while you stress about the home inspection.
Keep your options open. Do not feel pressured to sign an exclusivity agreement. If you are struggling to decide between different areas — say, Bethesda and Rosslyn — tour properties with agents who specialize in each location. But once you find one with whom you are comfortable, stick with that agent.
Location matters. Good agents tend to have a territory of expertise. Ideally you want an agent who knows more about the homes than what’s written on the listing — and maybe even some of the neighbors. Which house in your favored neighborhood might come up for sale soon? Has the condominium association been contemplating a special assessment? This is the kind of helpful information a well-connected agent has.
Talk with your agent. The relationship with your real estate agent has a profound impact on the transaction. From identifying and viewing properties to timely completion of the paperwork and occupancy of your new home, there are countless details. You need to communicate easily, often and successfully with this person.
Get smart. Learn about neighborhoods. Research the local real estate market and know what to expect in timing. If one neighborhood is more expensive than an adjacent area, don’t assume that it’s a fluke. Similar homes a few blocks apart may be priced differently because there is a top-rated school in the more expensive neighborhood, or because of upcoming plans for public transportation or other development. These are things your agent should be able to tell you.
Some home buyers want to go it alone. Rather than have real estate agents represent them, they hire real estate lawyers. Except in states where it is mandated by law, most real estate transactions do not require the presence of lawyers. But certain buyers can benefit from going this route.
A real estate agent has a financial incentive to see the deal go through. Most reputable agents will not let this consideration interfere with the advice they give you. A lawyer has no such incentive. He is paid regardless.
The buyer’s agent typically makes 3 percent of the home’s sale price. The seller usually pays the commissions for the buyer and the seller, but that cost is factored into the sale price. The seller may be willing to lower the price if you offer to pay a lawyer to represent you in the transaction. You will be out the cost of the lawyer, but the seller won’t pay two commissions.
Lawyers charge between $200 to $500 per hour. Some may agree to handle the transaction for a flat fee. Say a lawyer charges you a flat fee of $2,500 to represent you in the purchase of a $600,000 house. The buyer’s agent commission on the sale would be $18,000. If you can persuade the seller to reduce the price by $18,000, you have saved more than $15,000.
Follow the same advice for hiring a lawyer as you would a real estate agent: Talk to friends, interview several lawyers, and pay attention to credentials.