The Homebuyer-Multiple Realtor Paradox
Many People think that they will get the best deal by not making any commitments to a Realtor. They think that they will dangle a carrot in front of many Realtors and say that the one who finds the “best deal” will get their busisness. This doesn't work because it is such a shaky proposition that a Realtor will invest minimal, if any, work in the caller. Worse for the homebuyer, each agent they call is automatically working for the sellers, which means that they are contracturally bound to get the best deal for them, not for you, and will tell you about their own listings that they are trying to sell for the highest price. Agents tell their clients about “good deals”, not customers. You are a client if the realtor works for you and you are a customer if the realtor works for the other party, and that is the paradox: you might think that calling around to multiple agents who don't work for you will bear the most fruit, whereas the reality is that working with one agent who is your buyer representative will result in making a friend who will look out for you.
That agent will keep his ears open, make the most of your time by calling around to houses for you, know the condition of the individual houses and subdivisions to save you the time of not viewing unsuitable homes, arrange with the owners for showings, do research on values, notice things that experience has taught them, and suggest people who have done a good job for previous clients such as mortgage officers, inspectors, insurance agents, closing agents, appraisers, surveyors, and contractors. That agent will also negotiate the best price using techniques they have learned in the course of working in real estate, as well as write the offer on the houses you want to buy to eliminate unneeded fees, get the seller to pay for the remainder, know what they can ask for and get, and maximize your flexibility instead of keeping you locked in. How does any of this affect the home buyer? It means that there is a band about 5 percent above and below the list price where negotiations take place over price, fees, and terms. If it is written the buyer’s way, the buyer will save up to 10% of the price of the house. If it’s written the seller’s way, the buyer will pay up to 10% more.
Can you buy a house without a buyer representative? Of course…BUT you will probably pay around 10% more. Is this what you want? That’s $10,000 more on a “$100,000” house! So you don’t “need” your own Realtor, but it will be expensive for you without one! Considering that your buyer rep costs nothing extra (the seller pays agents the same whether they represent the seller OR buyer), why WOULDN’T you want your own agent? So, the paradox is that having ONE agent of your own will get you a better deal than calling A HUNDRED agents who are someone else's. © 2006 Jon Kresh.
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