The flier at the link below was drafted to address this very concern. It does not include the research recently done by Consumer Reports which indicated that buyers represented by their own agent paid on average about $5,000 less than those who were not represented by their own agent. Given that, I would recommend having your own agent do more research based on your specific needs and then make the initial contact should the process reach that point.
Need down payment assistance? Read the blog at http://www.GeorgiaFirstTimeHomeBuyer.Blogspot.com.
REALTORÂ® / HUD-Certified Affordable Housing Counselor - Keller Williams Realty Atlanta Partners
Let's talk about facts. Buyers do not pay the commissions. The real estate commissions are deducted from the sellers proceeds. If the seller does not higher an agent to market their home and represent them through the transaction then the seller nets more money.
It works like this:
The listing agent has a contract with the seller for a certain amount of commission. As part of the agents marketing plan the agent placed the home in the multiple listing service (MLS) and offers a portion of that commission to a buyers agent. That listing agent gets the full commission if a buyer comes without an agent and they share a portion if the buyer has an agent. Make sense?
A homes value is determined by what properties are selling for which includes for sale by owners, foreclosures, short sales, and owner occupied properties. A homes value is not determined by how much money the seller is paying in commissions and I can assure you commission these day are across the board... there is no norm. Considering that most for sale by owners fail to sell their own homes because they do not have the marketing skill, exposure, or pricing strategies that agents have. More than 80% of for sale by owners list there homes with an agent because they eventually see the value in paying an agent from their proceeds to sell their home. And most for sale by owners have to reduce their price to list so I ask you if it sounds like the buyer is paying the commission? Their home is not worth more because they hired an agent so I ask you if it sounds accurate what Mr. Beringer states that you are paying the commissions? A home is worth what market can bare. And now more than ever an agents role has become more important.
I have a client who used me to sell his home. He was already under contract to buy a new home when we met. He used a buddy who is cutting him back a large portion of his commission. His buddy has done nothing for him because he is barely making anything... you pay for what you get. He wanted a portion of the commission that he was not paying and he is getting nothing in return. He has now hired me to help him through a bad situation. You will find that there are agents who will work for free... but I am not sure about the quality of the work. Commissions are negotiable!
I am a big believer that you need representation just as the seller has representation more so in this market than ever before! There are no cons to using an agent but you need to interview and choose one that best suits your needs, desires, and personality. An agent that is working full-time and producing in this market.
You can go to the listing agent directly but you have to understand that the listing agent is representing the seller and the sellers interest and the sellers bottom line. They are not, will not, and cannot educate you on the comparables. I can assure you that you do not have access to the information that Realtors have access to for truly determining value. The con to going straight to the listing agent is that your best interest are not represented or fought for... and I can assure you as a home buyer will need assistance through the process and you are better to have represented assistance watching your back versus the listing agent who cares about getting it to closing for their seller.
Buyers agency came about from all the lawsuits that resulted from transactions because buyers interests were not being cared for by the listing agents. Listing agents make you feel warm and cozy. They are cordial and they are smiling big because they know they are getting a bigger paycheck because you don't have an agent.
I have never seen a buyer not having an agent benefit the buyer. It benefits the seller and the sellers agent. If anything the sellers agent reduces their commission a little to net the seller more and the sellers agent nets more. At the closing table do you want to see a seller and a sellers agent that is just tinkled pink that you did not have representation and counting their money all the way to the bank or do you want to have the peace of mind that you got the very best deal because you had a tough negotiator fighting for you and your interests?
Lastly, I leave you with this. Flat fee companies and discount brokers which are the brokers that give away their commission to buyers or list properties for next to nothing are sucking wind in this market. Even in the hot markets, there market share does not even show up on reports in my state which is your state. If they were so great don't you think that their clients would be screaming from the roof tops? Why is it do you think that these companies are not taking over the real estate industry?
Best of Luck with your decision and the bottom line is do what you feel is best for u
I would always want to have someone representing me if the other party has someone representing them (especially if they are going to pay my representative and it costs me nothing!) Accredited Buyer's Representatives are trained to assist the Buyer with contracts and negotiations. If you would like, I can refer you to someone qualified in your market to contact you and discuss Buyer's Agency.
You don't pay anything for legal representation and if you don't use a buyer's agent you will not be represented. The listing agent LEGALLY represents the seller only - and all of their concerns. There are a 1000 and 1 reasons to use a buyer's agent....educated yourself: http://www.hrmiller.com/buy-your-next-home.asp
Know as well that we're certified appraisers, we're in the data and all over Atlanta all day every day! Interview and research your agent - but get one!
Hank Miller, SRA, ABR
Associate Broker & Certified Appraiser
Prudential GA Realty
EXAMPLE: would you use same attorney if you were plantiff and suing a defendant
If you hire a GOOD agent this will be the pros and cons:
PRO: Expert Negotiator will be able to prove to you that they will get a better discount than you can.
PRO: You won't have to figure out the timelines and paperwork involved
PRO: You'll have an expert facilitator and coordinator - again assuming they do this FULL TIME.
PRO: They won't cost you anything
PRO: They may have contacts (I have a concierge service) to assist you throughout the process.
CON: Your selfish nature (speaking in general here) will be upset that someone seemingly got paid for doing nothing.
The fact of the matter is this, You don't need an agent to find a home, you need an agent to get the best deal on the home.
If you go in alone this is what I think about that:
CON: The other agent makes double to negotiate AGAINST you (I hope it's one of my listings!)
CON: The timetables are not tricky, but one day could mean the difference from being able to walk away vs. losing your earnest money.
... and for some humor.
PRO: Some loser real estate agent won't get paid.
CON: Some loser real estate agent will get paid twice as much.
In most cases the seller is planning on paying both a Realtor to represent them (the listing agent) and a Realtor to represent the buyer (the buyer's agent or sometimes called "the selling agent").
As a buyer you normally do not pay for professional representation, and especially for such an important purchase I recommend interviewing a couple of Realtors and selecting the one you think will provide you with the best representation. I encourage you to do your homework. You have some great responses in this thread. I recommend talking to a couple of them and if you like what you hear, set up an interview.
Redfin isn't viable here nor are many of the discount broker models. They do OK in a strong self driven market - only problem is that we're about 5 years away. In the meantime, the majority of those folks thinking that discounters and shopping only for price is the way to go will either wind up with full service brokers after wasting time and effort or on the steps...that is almost guaranteed. And Patrick - I say that as an appraiser with twenty years in the biz, not as a broker as I agree that there are many that still need to go. The fact remains however that we do this all day every day, you do it rarely. I might get lucky and land a jet once or twice, but invariably I'm going to crater it. Go get'm Patrick!
And my clients that I am currently working with and have worked with in the past would also "refute" your statements. I actually helped a client today negotiate between lenders... and I can assure you that he will be closing at a lower rate and with lower closing cost than anyone else. And he actually sent me an email singing my praises and thanking me for saving him and his wife so much money because even all the books he read about buying a home could not have accomplished what I accomplished for him.
And Leslie, even Clark Howard is a Realtor advocate!
Keller Williams Realty Atlanta Partners
There are many legal reason why using a buyers agent is a plus for you. In addition buyers agents are skilled negotiators who know how to get you the best deal.
The seller pays for the buyers agent commission so why not use this service? Otherwise the listing agent just gets paid both sides of the commission.
I work in the duluth area and would be happy to represent you with your purchase. I would be happy to provide you with some references of recent clients I have worked with who will reassure you of my services.
ERA Sunrise Realty
If you choose not to use a buyers agent, which as stated below does not cost you anything, I would still recommend a real estate attorney to review all contracts before you sign anything. An attorney will charge you directly for their services. Bottom line, you've got to be your own advocate.