A question was asked on Trulia earlier today that stated a desire to not use a buyer agent so as to save 3%. Now, aside from the mistaken presumption that all buyer agents are paid 3%, the questioner inadvertently brings up a point that all purchasers should understand:
You don’t bring a knife to a gunfight.
My answer began as follows:
The notion that you are spending an additional 3% if you use a buyer agent is inaccurate. The listing agent already has a contractual commission arrangement with the seller, and they will not cut it in almost all cases just to make the deal work for you. Moreover, you are not represented in the largest transaction of your life. A good buyer agent will save you more than 3%.
Some people think themselves as skilled and savvy enough to deal with the seller’s advocate without assistance. Most of them are sadly mistaken. They’ll get Uncle Lou or someone they don’t know out of the yellow pages to do their home inspection. They’ll hire the cheapest lawyer. The transaction can get stalled at the 11th hour because they didn’t know that there was no Certificate of Occupancy for the finished basement or extra bathroom. They lock their rate too early and end up paying an expensive extension fee (this is especially sad when the fee is unnecessary- if rates have gone down they’ll benefit from the common worst-case-scenario policy from a prudent rate float). They get to closing and find out the property taxes are $2000 higher than advertised. They get left out in the cold a week before closing by a sham Internet mortgage deal. The list goes on, and I’ve seen it all.
Skills alone won’t make MLS data and comparable sales materialize. Negotiating on a home is unlike any other transaction. If you treat it like a car, PC or ebay you are tempting fate. There may be some lame listing agents, no doubt. But I know agents that, if given the chance to sell their own listing to an unrepresented buyer, will smack them about the head and face & call them Shirley and have the buyer think they just got a foot rub. It has nothing to do with deceit. It has everything to do with knowing the things at the deep end of the pool. This is the biggest transaction of your life and there is no need for machismo. USE A PROFESSIONAL with references, a track record, and local knowledge.
Now, I haven’t shared the question with you yet. It was as follows:
Can someone send me the details on how to buy a home without hiring a buyers agent? a format of offer letter
Folks, if this is your starting point you need a buyer agent. This guy won’t save 3%.
J. Philip Faranda is the Broker and Owner of J. Philip Real Estate, LLC in Briarcliff Manor, NY. He is a Top 10 Producer for closed single family transactions out of almost 7000 licensees in the Westchester-Putnam MLS in both 2007 and 2008. You can log onto the company Home Page at www.jphilip.com
You can search the MLS like an agent and find your dream home before other buyers for FREE confidentially & at no obligationat http://jphilip.listingbook.com.
J. Philip Faranda ranks among New York’s premier short sale REALTORS specializing in short sales in Westchester, Rockland, Putnam & Dutchess Counties. www.NYShortSaleTeam.com. Read Phil’s short sale blog at http://NewYorkShortSaleBlog.wordpress.com.
J. Philip Serves Briarcliff Manor, Ossining, Croton on Hudson, Pleasantville, Sleepy Hollow, White Plains, Yonkers, Peekskill, Cortlandt, Tarrytown, Yorktown, Montrose, Hawthorne, Thornwood, Valhalla, Hartsdale & all of Westchester County, New York.