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« Back:
Get
the bank's offer
« »
Next: Get
the Disclosure
» Benefits of using a realtor Once
you've been pre-qualified can finally start looking
at houses. Yay! Now you get to pick
a real estate agent (aka "realtor"). A
realtor who works for the buyer (you) is called the
buyer's agent. Usually there's no downside
to using a realtor, because their fees are paid by
the seller, not you. Realtors The second important thing your realtor can do for you is to give you a professional opinion about how much a given house is really worth. This can help you avoid paying too much for a house. But note that the realtor has a conflict of interest: the realtor's fee (paid by the seller) is typically 3% of the sale price, so the more you pay for the house, the more the realtor makes! HomeGain can help you find a realtor.
Realtors don't always offer a benefitThe realtor's ability to search MLS for you is less of an advantage than it used to be, since in most areas it's now easy to find homes for sale on the Internet. For example:
If you can find a home on your own then you don't need a realtor to help you find houses. And you can still get an opinion of how much a house is worth by hiring a realtor to perform Competitive Market Analysis (CMA) of the property, which usually costs around $75. The market analysis will compare the house to other similar houses in the neighborhood which have sold recently, and their sales prices. You need a professional opinion of value to make sure you don't pay too much for the house. Most realtors will offer to prepare a CMA for free in hopes of getting you as a client, so if all you want is the CMA you should make it clear that you're not interested in having them represent you, and that you prefer to just pay their fee. An alternative to getting a CMA from a realtor is hiring an appraiser to provide you with an estimate of value. The appraisal will be much more detailed and probably more accurate than a realtor's market analysis, but it will cost more, too ($400 and up). Then again, if you do decide to buy the house you'll have to hire an appraiser anyway at that point because the bank won't give you a loan without an appraisal, whether you use a realtor or not. In a pinch there are websites will give you a free estimate of how much a given house is worth, using a combination of recent sales data and property appraisal records, but they're not terribly accurate. They're good to use to get a rough ballpark idea before you buy a CMA or appraisal, but they're no substitute for the real thing. Do not base your offer on a free web-based estimate of value! Anyway, here are the free sites for fun:
Advantages of not using a realtorOkay, so we've seen that a realtor isn't always necessary. But is there any advantage to not using a realtor? Possibly. Remember that your realtor is paid by the seller, who pays 3% of the purchase price of the house. If you find the house yourself then the seller won't have to pay that 3% commission, and you might be able to convince the seller to lower the price by 1, 2, or even the full 3%. Most realtors also won't tell you about houses that are For Sale By Owner (FSBO). If a private individual is selling his/her house without using a realtor, then the house won't be listed in MLS, since only realtors can enter houses into MLS. Owners often choose to sell by themselves because then they won't have to pay the 3% commission to their own realtor. (A seller typically pays 3% to her own realtor and 3% to yours.) A FSBO seller might still pay the 3% commission to the buyer's realtor, in order to get realtors to tell their buyers about the property. But if they don't, you won't hear about that house from your realtor, since they can't make any money from the sale if you buy it. So the potential advantages of not using a realtor are the possibility negotiating a lower price with the seller, since the seller won't have to pay a commission to the buyer's realtor, and the ability to find FSBO's. But these advantages exist only if you take advantage of them. If you don't actually try to negotiate a lower price (or you're not good at it), or make no effort to find FSBO's in the first place, then you're not getting the benefits of not using a realtor. And remember, it will still be up to you to look for houses in MLS (if available to you) and to a professional estimate of value for each house you're interested in.
Should I use a realtor or not?Only you can answer that question for yourself. Above is everything you need to know to make your decision. Let's summarize it again here though.
If you decide to use a realtor, then HomeGain can help you find a realtor. Whether or not you use a realtor, all the papers for the sale are handled by and signed at the office of a title company, which makes sure (among other things) that the home is really the seller's to sell, and that there aren't any outstanding claims against the property. If you want further protection, you can hire an attorney to check the paperwork, though most people don't opt for this. I've never done it.
Researching cities and neighborhoodsThere are lots of sites that provide detailed info about different cities and neighborhoods within those cities. I'm not going to attempt any kind of exhaustive list here, but here's one to help you get started. |
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Back: Get
the bank's
offer
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Next: Get
the
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» |
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Last Update: July 2009
If you liked this site then you might like some of my other sites:
How to Find Cheap Airfare
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