The Listing Agent’s Job
The Listing Agent works for the Seller, and promotes the Seller’s interests — like getting the highest possible price. If you’re a Buyer, I assume you want to pay as little as possible. So, if you see a listing you like on Zillow, Trulia or Realtor.com, you should know what you’re getting into when you push the “Contact Agent” or “Request Info” button — it will usually take you to the Listing Agent, who would be more than happy to share his or her sales pitch. Of course every Agent owes you honesty and respect, but the Listing Agent’s loyalty belongs to their client, the Seller. Most Realtors, including me, work sometimes for Buyers and sometimes for Sellers. Just as the Seller needs a Listing Agent to represent them, so a Buyer needs their own advocate, the Buyer’s Agent.
Get Your Agent For Free!
The first really cool thing about getting your very own Buyer’s Agent is that he or she usually doesn’t cost you a dime! So what’s the catch? Well, here’s how it works: The Listing Agreement between the Seller and the Listing Broker specifies the commission the Seller will pay to the Broker. It also authorizes the Listing Broker to share a specified portion of that commission with the Buyer’s Broker. If the Buyer has no agent, then the Listing Broker and Agent pocket the whole commission — only in rare cases does the commission shrink. So, under most circumstances, the Buyer’s Agent is paid out of the commission paid by the Seller. Since that commission is almost always a fixed amount or a fixed percentage of the sales price, there is no additional cost to the Buyer if he or she hires an agent. This might not be true in the unusual situation where you end up buying a home from a Seller who doesn’t have an agent, but that just gives you additional leverage in price negotiations.
At this point you might be thinking, “It’s nice to know an agent probably won’t cost me. But I need to know more about why I need them at all. I’m not afraid of the Listing Agent. After all, I deal with sales people on my own when I’m buying everything else.” My short answer is: “Buying a home is a lot more complicated than buying anything else.”
When you buy a car, the second most expensive purchase for most folks, you deal with a salesperson and a sales manager. When you buy a house, there are at least ten (often as many as twenty) different professionals involved in your personal transaction! My point is that you need an experienced ally to help you deal with each and every one of them.
If you’re not a seasoned real estate investor, I recommend that you continue reading.
Finding the Right House
I admit you can get a lot of helpful information about houses in Richmond from a huge database housed on computer servers in California. But there’s no way that can replace experience on the ground. If you’ve ever visited a home you found on Zillow, there’s a good chance you’ve seen some big differences from what you expected based on some carefully staged photographs and online data. You might even have exclaimed: “So that’s why they didn’t include a picture of the upstairs bathroom!”, “What a nice view of a busy highway!”, “Those wide-angle lenses sure make the rooms look bigger, don’t they!” A good Buyer’s Agent is familiar with all the tricks of the trade, and looks through those online listings with a more critical eye than most consumers. Equally important are their knowledge of neighborhoods, nearby amenities and the current housing inventory. An agent can help you efficiently narrow down the options.
Agents spend a lot of time looking at houses. We develop a pretty critical eye for spotting potential defects or problems waiting to happen that most consumers might miss. It helps to have a partner whose job is to look for problems. It can be heartbreaking and frustrating, as well as expensive, to go through most of the home purchase process, only to discover at inspection time that there are issues that force you to back out.
Each house you consider has a list price as well as an automated value estimate on a website like Zillow. Those automated estimates are simply not accurate enough to guide you in price negotiations. According to Zillow’s November, 2017 update, a Zestimate®️ in Virginia is within 10% plus or minus of the selling price 81% of the time. In other words, about 8 times out of 10, a home that sells for $300,000 will have an automated estimate somewhere between $270,000 and $330,000. 2 times out of 10, it’s off by even more! That’s not much help in negotiations!
On the other hand, a Buyer’s Agent has access to data on recent sales and current prices of comparable homes, the current inventory and demand, current trends in days on market, and experience using this information in price negotiations. That’s an ally who can save you money!
You can do your own research to find a decent mortgage price. But it’s hard to know in advance if your mortgage broker is going to come through on schedule. If your likelihood of qualifying for an acceptable financing package is at all in question, then you really want some guidance on choosing a vendor. Otherwise you may go through the agonies of an extensive application process only to be denied financing when your pending offer has run out of time. A Buyer’s Agent from a good real estate brokerage is well positioned to offer guidance to avoid this problem.
Your agent can advise you on the selection of a thorough and reliable home inspector, who will identify defects and maintenance issues that you want the seller to correct before closing. Many inspection issues are subject to negotiation, while other costly repairs may result in the seller releasing you from the contract without penalty. There’s a surprising amount of leeway for judgment and negotiation, and having a skillful agent from a good brokerage on your side can be critical in determining whether you let too many problems slide or walk away when the deal really might have been salvaged.
Your Buyer’s Agent performs a host of other so-called “ministerial tasks” in helping you proceed from your initial dream to a satisfying closing on a suitable home. But hopefully you get my point that his or her commission is a sound investment — especially since the seller pays, whether or not you take advantage of it.
Invitation To A Test Drive
Maybe you’ve found a house or two online that might interest you. Or maybe you’d like some guidance about neighborhoods and the current market, along with some house recommendations. If so, give me a call and we can chat. I’d be happy to go visit a house or two to try out our working relationship. I’ll get to learn more about what you like, and you’ll get to see how I can add value. If you are interested, I can set up a custom search based on your criteria that will give you email updates as new listings hit the market during the busy Spring season.
Reach out when you’re ready to move forward with the search for your new home!
Martin Ahrens 804-658-7718 firstname.lastname@example.org