1. If I don't have an agent, the listing agent will advocate more for the seller to take my offer because they will receive the full commission. They have motivation to like me!
FALSE: An agent has to present all offers to the seller. The seller will choose which is best for THEM, usually the one with the most money. The agent has to disclose that they would get all of the 6-7% commission by taking the offer that they helped write for the unrepresented buyer. Also, the listing agent can tell the seller all that they know or find out about you!
2. Buyer representation has to be paid for out of my own pocket.
FALSE: Being a “do-it-yourselfer” in home buying will not save you ANY money, even if the seller is a “do-it-yourselfer”! If you find a FSBO (For Sale By Owner) with an agent, the agent can usually get the seller to pay them. The FSBO price is taken from comparables which include the agent’s commissions. Buyer’s agents in other cases, get paid by the listing agent, who is paid by the seller out of their proceeds. Would you go into a lawsuit without a lawyer? Especially if they were free?
3. If I come without an agent to new construction, I can negotiate free options since I’m saving the builder a buyer’s commission!
FALSE: The builder “owns” you because his advertising dollars brought you through his door. They pay representatives to hold their models “open” daily for just that purpose, to get unsuspecting “walk-ins.” For a $200,000 home, they are indeed saving around $6,000 by not having to pay a buyer’s agent. They will still charge you for any and every upgrade you want, nothing is FREE in new construction, and negotiating the base price is nearly nonexistent.
4. I’m resourceful and can look out for myself, so I don’t need a real estate agent. I know exactly what I’m looking for.
FALSE: See myth 1, 2, & 3. It’s true, real estate is not rocket science, but unfortunately, if you’re not a professional, or rather a professional with experience to know how the market works, you lack the agent perspective and objectivity. For example: Perspective 1: You think by the seller “giving” you all the appliances in exchange for money (full price) or preferred closing date, it’s a bargain. WRONG! Almost 95% of the time, all appliances come with, it’s almost become a “standard” in the metro area. Perspective 2: If you’re an FSBO, and receive an offer that’s 97% of your list price in the first 30 days, we’d have to tell you to take it, that it’s a good offer. In most price ranges, historically, that’s what sellers have been getting. Instead you turn it down because you don’t have statistics available that tell you it was a good offer and no one to help you analyze the market. Perspective 3: Condition can affect price, motivations, and desire. For example: A house in perfect condition will go the quickest, be priced the highest, and the seller will be less willing to fix something after the inspection. On the flip side: the house you decide to write on is in tougher condition and the price reflects that. Your inspection comes back filled with “to-do’s” and repairs. Your inclination is to ask the seller to fix a long list of things. It’s unlikely the seller would be willing to fix anything because they priced the house accordingly, and most of the repairs you are asking them to fix were “visible” at the time of showing. Inspections are for hazardous, expensive and/or items not visible to the naked eye.
5. Real estate agents are always representing the seller or worse, their own pocketbooks.
FALSE: If you are new to the area, you might not realize that our board of REALTORS® was one of the early adopters of Buyer Representation. What that means is that when you want to buy a house, you find an experienced agent to help you. Every house listed for sale by any other real estate agent or company is available to your agent to show you. You give no money to your agent to represent you. They get approximately half of the listing agent’s commission.
The aforementioned perspectives are just the beginning! Our long-term experience gives us the REALITY of the market and how things work. We will use our knowledge to your advantage, giving you power!
If you would like more information about how things work, we’d be delighted to tell you more. Give us a call!