Frustrated buyers are searching for a better way to land their dream home! Some are asking the question, "Do I really need a real estate agent?"

My three year old son is going through a Mr. Independent phase.

"I can do it myself!"

As any parent would do, I encourage him to find his way even when it means he will have to learn from his mistakes. However, there are certain situations where I have to step in.

Yesterday, he was hungry and wanted a snack. He decided that instead of doing the obvious (asking mommy to help him), he was going to be resourceful and figure it out on his own! He got a step stool, pushed it against the counter, climbed on the counter, opened the cabinet, and got himself a granola bar. He then fumbled his way back to the floor. He was so proud of himself for grabbing that granola bar, but now he realized that he had no idea how to open it. That's when all the screaming and kicking ensued! I explained that if he had simply asked me for help to start, the whole situation would have been much easier and wouldn't have ended so dramatically!

The Independent Buyer

With frustrated buyers battling the current sellers market, I've been hearing more and more comments wondering if there is an option OTHER than using a real estate agent to find and win their dream home.

I get it! The inventory is low throughout many regions in the U.S. and there is no shortage of buyers! This makes for quite a challenge when buyers have to compete for the few homes available. I keep hearing the same recurring story... buyers are making full price (sometimes over asking) offers only to lose out over and over again.

When a buyer gets frustrated, they look around to see what they can do differently. Some are placing the blame on their agent.

I'm not going to sit here and tell you that every agent is amazing, because that of course would be a bold statement! I have crossed paths with agents who probably could use a few more classes, however I do honestly feel that the strong agents far outweigh the weak ones.

If you have concerns about your agent, then your question should be "Is there another agent who would better understand me and my needs?" instead of "Maybe I should just ditch the agent idea and do this on my own!"

I'm not going to get into all that an agent does from the moment you hire them to that moment you are rewarded with your new keys because it is far too exhaustive for one post. I do cover many of these topics in other posts, so feel free to browse my other subjects for clarity on the home buying process. I also have an ebook "Home Buying Made Simple" coming soon, so make sure to follow my Facebook Page for that announcement!

Here are my top 5 reasons why you need a real estate agent when buying a home.

1. GUIDANCE - Your agent is educated and experienced in the home buying process. They will advise you from beginning to end with every little question that you have to ensure you fully understand this important investment. They will also direct you to resources for questions outside of their expertise such as for legal, financial, or construction matters. 

2. MLS ACCESS - This is pretty important! Not every property hosts open houses! In a fast moving market, the best homes can go under contract in the first 24 hours of listing! Having an agent set you up with a search connected directly to the mls gives you a step up (or at least equal playing field) on your competition. Having an agent will also give you the ability to tour the property faster. You need a licensed agent to schedule a property showing.

3. PERSONAL ADVOCATE - When you sign an buyer agency contract, the agent owes you a fiduciary responsibility.  This means that they agree to advise and act in your best interest.  This is so important when it's time to determine the appropriate market value for a home, when negotiating price, and especially when negotiating any material defects discovered during inspections. You need someone familiar with the process and who knows when/how much to push.

4. MARKET KNOWLEDGE - Remember, real estate agent's make a living off of knowing market trends. Most agents concentrate on and become experts in specific areas. They will study the trends with housing inventory, home prices, demand from buyers, impacts from taxes, mortgage rates, etc. They know when it is a sellers market and when it is a buyers market, which is critical when determining your game plan! Your agent can guide you on how aggressive you may need to be or if there may be room to negotiate. For example, in a sellers market, you often have to act fast and strong if you want to be in contention for a great house. 

5. PAPERWORK - You walked into an open house and said... "This Is The One!! Who needs an agent?! I found this gem all on my own!" But now what? How are you going to write up that offer? Who is going to explain all the sections of that lengthy contract you need to complete? How can you expect to compete when you don't know which documents you need to submit and how to correctly complete them?

A seller needs to feel confident in an offer before they agree to take their house off the market. That is hard to do if an unrepresented buyer submits an offer with missing, incomplete, or incorrect paperwork. 

Understand that it doesn't work as simply as you see on HGTV! I choose this house! Here's my verbal offer! Where do I sign! Let's move in and live happily ever after! This is NOT how it works in the real world.

Someone will have to complete and process all of that paperwork! It will either be an agent you choose, or it will be the sellers agent. If you work with the sellers agent, both you and the seller will need to sign a contract with them, which allows them to act a a dual agent. The seller may not want to do that because now their agent can no longer advise them. A dual agent can only facilitate the transaction and cannot guide either party. If the seller does not agree to dual agency, then you will have to find an agent anyway!

Will a seller favor my offer if they think they won't have to pay a buyers commission?

I know of a handful of people over the past few years who decided they felt they would have a stronger offer by not having representation. First, if a listing agent were to sway a sellers decision because they know they could receive a higher commission with an unrepresented buyer, they would be in breech of the REALTOR code of ethics and could lose their license. 

Secondly, most individuals end up reaching out to an agent or lawyer anyway because the paperwork and process is unfamiliar to them!

"Which inspections should I elect?" "What is the mortgage contingency?" "If I waive a certain contingency, will my offer be stronger?" "What are my risks?" "What other documents do I need to submit with my offer?" "What should I do if they counter offer?" "Am I paying too much for this house?"  

IN SUMMARY

There are some situations, where there may be an exception.

1. If you are making a cash offer and have a real estate lawyer who is helping you process the paperwork (although inspections can still be difficult to negotiate).

2. If you are purchasing a For Sale By Owner home and have a real estate lawyer to help you with the paperwork (although inspections can still be difficult to negotiate).

3. If you have a family member/friend who is an agent who is willing to advise you pro bono along the way AND you have a lawyer who is helping you process the paperwork (AND again... the inspections can still be difficult to negotiate!).

If you don't feel confident with your agent, then interview somebody else. There are many great agents out there!

I strongly advise that you don't try to purchase a house unrepresented! You may leave yourself vulnerable and risk either overpaying for a property or accepting terms that are not in your best interest.

Have thoughts or questions? Feel free to leave a comment below or contact me