Is it necessary for a first time buyer to hire a real estate broker?

I already have access to MLS- do i really need a broker? Granted, there is a lot of confusing paperwork but cant i have a real estate friend to look it over for me. And doesnt it seem like a selling broker would be more willinbg to work with someone who doesnt have a buying broker since they get to keep the whole fee?

Thanks- Andrew

You're correct, there is a lot of paperwork involved in buying a home. And because you used "confusing" leads me to believe you do need a Realtor to assist you. It should not cost you any money to enlist the services of a Realtor. Most of the time, a Buyers Agent will split the commission with the Listing Broker. The Listing Broker does represent the seller and their loyalty lies with them. Why not have someone represent you? It's free!!

(EDITED!!! TRACY IS RECOMMENDING THAT YOUR AGENT DO SOMETHING THAT IS AGAINST THE LAW! the laws state that commissions are only payable to BROKERS. when buyers take something from the commission, if the bank learns of it, you will not close. nobody, no real estate attorney or any licensee that wants to keep his license, will have anything to do with it).

1. of course you do not HAVE to get a broker, buyer, or seller, but see below about that.

2. how do you have access to the mls? you mean you have the current mls? it is proprietary software that brokers and agents spend their commission payments to use, not the general public/unlicensed salespeople!

that would mean that the agent that allow you to go into that database under his number and password stands to be fined heavily and/or kicked out of the board. tsk tsk, but it's up to him i guess.

3. if your "friend" is the same one that gave you his password and access to his agent id in the mls, then i doubt he knows much about the wording in contracts...

4. of COURSE a listing (seller's) broker is generally more willing to "double bubble" the sale on your (the buyer's) and on his (the seller's) ends! why is that???

because, he will get double the amount he would normally get! but is that fair and right under the fiduciary responsibilities of Agency? No.

now then, ask yourself this:

who is selling? who is buying? the seller is selling. YOU are buying. so why then would you be so crazy as to allow the seller's agent/broker to represent YOUR interests? why, so that HE can get more money? what does that do for YOU?

no, get a buyer agent/broker. just because you do does not mean you have to pay one cent to her. she can still very, very reputably and adequately represent YOUR interests as the buyer and make a portion of (let's pretend) the total $10,000 paid by the seller to the seller's broker at closing. she would do it like this:

she helps you find the house and understand the documents and give you financing advice. she has you make an offer to buy the house you want.

let us pretend that you wish to offer $200,000 on a house listed for $250,000...but, that you will go up to a maximum of $225,000. you tell her that. she, because she is obligated as your agent to represent YOU, cannot tell the seller or the seller's agent that you will raise your offer! now THAT is in YOUR best interests, not if you hire the seller's agent! ok, so the ball bounces back and forth until eventually you do offer and get a contract for $221,000. the seller is happy. you are happy. you go to the closing.

the sale is closed. from the seller's proceeds, $10,000 (our example) is paid out to the seller's broker. the agent that does all the legwork for the seller's broker brings $10,000 to the office. the seller's broker has already made a written agreement to her salespeople to pay them, usually, 50% of the amount that comes into her office.

so then, she, the seller's broker under terms of the mls, pays one half of the $10 grand to the BUYER'S broker.

the buyer's broker also has a written agreement to (usually) pay 50% of what he gets in his office to his licensee, your agent. so then:

the seller's broker gets $2,500

the agent for the seller's broker gets 50% of $5,000 that the seller's broker gets, which is $2,500

the buyer's broker gets one half of the total paid by the seller, i.e., one half of $10,000 = $5,000

the agent for you, the buyer, gets 50% of that amount, so then she gets $2,500 and then:

everyone is happy.

A BUYER SHOULD ALWAYS, ALWAYS, ALWAYS have a buyer broker, but it is not necessary or even so common for you to pay her. she will handle all that confusing paperwork for you.

I would get a broker

HOW DO YOU HAVE ACCESS TO THE MLS?? Whomever gave you access faces a significant fine - let them know!

As you have a friend in real estate, why not let him be your buyer's agent? Why would you go solo?? Regarding the seller's agent's willingness to work with you, in today's market, he'll be more than happy to have your offer come in through your buyer's agent.

Yes! First, it's free legal advice for you so why wouldn't you do it? Second, the seller's agent could always represent you too and still keep the whole commission and that way you'd have representation. You NEED someone to explain all this crazy stuff to you, otherwise what happens if you buy a house that falls apart in three months? Would you have the faintest idea what to do first, what your legal recourse would be?

And your agent can also help you negotiate a better price for the house since most people are uncomfortable negotiating directly with the seller.

Again, it's free! The seller pays your agent's commission but their loyalty is to YOU.

You as the buyer don't pay the realtor anyway. The seller does. So, yes I really do think it is necessary to go through a realtor. They help immensly. I loved mine and I couldn't have done it without her. They have the inside know.

I don't know what state you are in so I'm not certain on how things work there. I live in WV and used to sell real estate. If you sign up with a real estate broker, he/she will be your buyer's agent. That means he/she works for you. Otherwise the broker works for the seller. If you sign with the same company that has the house listed then they are a dual agent and work for both of you. What this means is, if you have a buyer's agent working for you then he/she will keep your information confidential. If he/she happens to find out anything about how much the seller is willing to take, etc. then he/she would tell you that since he/she is working for you. If you do not have a buyer's agent and you make an offer but mention you would pay more then the agent would tell the seller that since he/she is working for the seller. If it's a dual agent then they wouldn't disclose either of your information to the other. Most selling brokers want to sell their clients' houses and are willing to work with buyer's agents. If you have a real estate friend then why don't you sign up with him/her? Also, if you work with one agent then that agent will show you all of the houses you want to see and you aren't stuck calling a bunch of different companies. You will be more protected if you sign with a broker as your buyer's agent. Hope this helps.

It's great that you have access to the MLS. You know more of what is out there. Yes, I would work with a buying agent because it doesn't cost you, it cost the seller. And you don't have to fiddle with the paperwork. As for the broker that has the lisiting, if you feel it is a conflict of interest to work in a dual transaction find a realtor that you feel comfortable with.

It is not necessary, but you need someone to help protect you. If your friend is going to look over the papers for you, why not let them represent you? The selling broker is still going to get the best deal for their client, that is their responsibility as the seller's agent.

Do this, I did. I learned it from a book. Look for a real esate agent, and split the comission with them. Right now, things are slow and they NEED work. Call a bunch of them, and ask who will give you 1% of their commision, and whoever does, go with them. I did it all on 3 of my houses, 1st house I got $500, 2nd I got $3500, and the 3rd house I got $5000.

Enter Your Message or Comment

User Name:
User Email:
Post a comment:

Archive: Forum -Forum -Finance - Links - 1 - 2 - RSS - All RSS Feeds
The Causes and the Results. 0.024
Copyright (c) 2011 Financial Crisis Tuesday, May 29, 2012 - Terms of use - Privacy Policy