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For most people the two most expensive purchases they will make is a house and a car. Both are very intimidating purchases. Try to think back to when you bought your most recent car. You probably looked on the internet for awhile trying to familiarize yourself with the products available to you. After awhile you decide you want to go ahead and drive some cars. You get to the lot, excited, everyone loves that new car smell. As you are looking around at the vehicles on the lot, you get that feeling that you are being stalked. Right about then, you hear the voice of a stranger, "She's a beauty isn't she?". Right about then you realize how vulnerable you are. You have been approached by a car salesman. You are about to make a huge purchase, you are basically uninformed on the product, you don't know all the tricks and tactics of sales, and are certainly not trained in negotiating.
This scenario is not that unlike house buying. You are about to make a large, quite possibly the largest, purchase of your life. There is a lot of information to take in, many different areas to consider, and a lot of negotiating to do. The big exception is that you have the opportunity to hire a buyer's agent to assist you. You can think of a buyer's agent as bringing your dad or good friend who knows a lot about cars with you to the car lot. A buyer's agent has good knowledge of what homes are available in the area. When you get into a home they know what is important to look for in the home. Most importantly, they are emotionally separated from the transaction.
What does that mean? I think that this is one of the most important reasons to hire a realtor®. We call it third party negotiating. Remember that new car smell I referenced earlier? Realtors® are immune to that. We are not emotionally attached to the home. A good realtor® can look at the house for what it is, a house with four walls and a roof designed to protect you from the elements. We don't look at at it with emotion. By taking emotion out of the equation we are better equipped to look at the purchase analytically. Is this the right house for you? Are you making the right offer on this house? You don't want to overpay but you also don't want to insult the owner. Can we ask for the seller to pay for your closing costs? Yes, this house is beautiful but is it in the right part of town for you? What school zone is it in? There are a lot of factors to take into account. It is overwhelming. A lot more factors than buying a car. When you have fallen in love with the house you are likely to overlook important factors in favor of other sexier features. I have had clients fall in love with a bonus room even though the house is not in the school zone they wanted for their children. Priorities can easily get out of whack. After you move in and that "new house smell" has faded you will be glad that you had a buyer's agent there to make sure you made the right decisions for the right reasons.
Now that you know just some of the value a buyer's agent brings to the table, you might be surprised to know how a buyer's agent is paid. Generally speaking, the buyer of the home doesn't have to pay a dime for the buyer's agent. The seller's agent shares a predetermined portion of their commission with the buyer's agent. This amount is fully disclosed to both parties.
One comment I hear often is, "I wanted to save money so I called the listing agent directly". Another name for the listing agent is seller's agent. This term is more accurate because it clarifies the relationship of this person - "agent for the seller". They are representing the best interests of the seller. This doesn't mean they are dishonest, they are just doing their job. In fact, the simple fact that they are a REALTOR® means that they abide by the REALTORS® code of ethics. Part of the code says that we have to be honest with all parties. Yes, the seller's agent will be honest and truthful but they will be actively negotiating against you. How is someone saving money going directly to the selling agent?
Next time you or someone you know is talking about buying a house, keep these thoughts in mind. Your friend will appreciate you for this simple bit of advice to offer. Instead of buying a home blindly take advantage of the resources available to you, hire a REALTOR® to represent your interest. This applies to selling your home too, but that is saved for a different post.
In the meantime, I think that I am going to look into REALTORS® for car buying. What would they be called? CARTORS® or maybe AUTO-MA-TORS®?
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.