Using a Real Estate Broker When Buying a Home
Looking for and buying a home is a significant life experience and can be very daunting. This is true even if it is not your first home purchase. It is a fairly common practice for most home buyers to use a real estate broker or agency to find and buy a home. However, it should not be an automatic decision to do so for all buyers.
If the market has many homes for sale, with lots of for sale signs and a healthy amount of for sale ads in publications, then the need to use a broker lessens. This is particularly true if you have the time and inclination to make the initial phone calls to the sellers yourself and know how to get around the neighborhoods in question. Also, if you have access to a significant online real estate for sale portal that is searchable, then again you as the buyer have less dependency on a broker.
The situation is different if you are looking to buy a home in an area that you are unfamiliar with and need knowledgeable information about important issues such as schools, shopping, transportation, builders, taxes and the like. Here, a real estate broker can be very helpful in guiding you.
Another situation where using a real estate broker is when you have to sell an existing home in order to buy a new one. Unless you have buyers of your existing home already lined up, it can be very helpful to have one brokerage helping to sell your current home as well as locating a new one.
A major consideration in this area is of course money. The common conception (actually a misconception) is that a real estate broker is “free” to the buyer as in most cases the seller of the home pays the broker’s commission. This is technically correct, but not really true. The seller knows he has to pay a commission out of his sales price. This influences what he’ll agree to sell the property for. Therefore, if the home involved is not listed with a broker and you use a broker, it will cost the seller and thus you as a buyer more money. This is why if you can find the right home on your own that is for sale direct by owner, you should definitely do so.
If you decide to use a real estate broker to buy a home, you should be aware of some things. First, be aware that in most cases that the broker legally is “working for” the seller, even if it is a separate broker from the one with the listing. This is because, as discussed earlier, the seller has to pay the commission. However, most states put a legal requirement on brokers disclosure to potential buyers of significant information, such as the home is in a flood zone or needs a new roof. The best advice here is to ask a lot of questions to the broker as this will put more responsibility on him.
Also, you should use a broker that can really help you. Try to get a particular agent that is truly an “expert” in a particular area or neighborhood. Using someone with a lot of experience or better yet is a resident of that area themselves is also a good idea. Of course, getting positive references regarding the broker is also a very wise idea. Lastly, whether using a real estate broker or not, always remember and practice “caveat emptor” – let the buyer beware.