Unrepresented Home Buying? Buyer Beware

By: David Bouthot

"When most homeowners wish to sell their property, one of the first things they do is to secure a real estate agent. However, when many people who set out to purchase a home often start to do so by themselves, without representation. Many buyers go online to look for great deals, or visit open houses themselves, without applying for a buyer's agent first. Unfortunately, this approach can cost home buyers a great deal of money and can lead to house buying disasters that take buyers years to recover from -- both financially and emotionally.

It is true that buyers are becoming more Internet savvy and more money smart. Many get estimate values of homes from web sites such as Zillow, or spend their time looking at County Assessor websites to find the assessed value of properties, as determined by the local taxing authority. However, this information, while valuable, will often not provide a buyer with the information they need to make a truly smart purchase. Many buyers, for example, do not realize the high rate of errors and mistakes that occur on these web sites.

Many buyers assume that they can save 3% immediately by negotiating the 5% to 7% selling commission that is often built into the list price of a property.

However, many buyers quickly realize that developers will often not negotiate much with an unrepresented buyer, even if they had actually planned on paying additional money for a commission. The same is true of many sellers -- they are not always willing to negotiate with a buyer who is unrepresented, even if they were planning on negotiating with a buyer's agent. In many cases, where a homebuyer is using an agent in order to sell the property, that agent may accept a lower commission than was originally agreed upon. In this case, the unrepresented buyer does not get any sort of discount. The seller simply pays less commission to the listing agent, and the price remains the same.

For all these reasons, getting a buyer's agent is simply a necessity in today's real estate market. A good buyer's agent can have access to accurate and detailed information about the market value of the property. A good buyer's agent will also have the well-developed negotiation skills that can get a buyer an actual discount on a property. This negotiating skill alone is often enough to pay for the price of a buyer's agent in the first place. A buyer's agent is also often able to complete extensive research on the MLS. For example, a good buyer's agent will use this database to compare recently sold properties with the property that a buyer is interested in buying. This can help the agent determine whether the price compares favorably to current market conditions. More importantly, an experienced buyer's agent is also invaluable in helping a buyer negotiate the entire buying process. From helping to locate a good lender, to helping in the inspection and assessment process, to helping the buyer determine what their needs are, a buyer's agent can take a buyer from initial desire to buy a home right down to negotiating the contract. Simply put, having a professional, experienced buyer's agent on your side ensures a good house buying experience."

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