Let Me Explain
If you’re in the market to buy real estate now or in the near future, you probably have a lot of questions. You may be wondering how you will ever find the perfect home or investment property, how you’re going to pay for it, and how much you’re going to have to pay in fees and commissions. All are valid quandaries. However, you may not realize that the beauty of the current business model is that as a buyer, you don’t have to pay your Realtor a dime! That’s right — zero, nada, free-99.
It is customary in this U.S. for the seller of real estate to pay the full commission to sell the property which includes the listing (offering for sale) and selling (making an offer for purchase) sides of the transaction. This means as a buyer, you can have a top-producing real estate agent to do countless hours of research, inquisition, negotiation and presentation of offers on your behalf for literally zero out-of-pocket cost to you.
What Does This Mean?
Well there’s a catch. Just because this service is freely available in the marketplace doesn’t mean that you can just fall into the lap of a top agent. I’ve witnessed many buyers spend countless hours with agents that don’t fully understand their needs and therefore do not deliver the highest level of service. As with many professions, the top 20% do 80% of the business, and do it well. As a buyer, there are things you can do to get in a position to act, which in turn will get you the best service from a top agent in your area. It’s a two-way street and both parties must perform to reap the reward they each desire.
First thing is first, make a plan. An agent can be very helpful if you have never purchased real property before. There are many nuances to consider including but not limited to:
- Comparable Sales and Market Trends
- Clean Chain of Title
- Seller Disclosures
- Inspections and Appraisal
- Schools and Community Info
- Property Taxes and Special Assesments
And the list goes on…
A top agent will not only be able to advise you on these matters, but will also have a team of other professionals at their fingertips for a seemingly endless list of appurtenances. It is a good idea to scroll the free sites like Zillow, Redfin, etc. But when you’re REALLY read to buy within the next 90 days, it pays (or should I say saves) to have good representation on your side.
If you currently own a home but are considering an upgrade, downsizing, or moving to a different state – a top agent is imperative. Unless you have the cash to purchase or can qualify for a second mortgage, you’ll be both selling and buying at the same damn time! This can be a tricky predicament especially if you have children and are exchanging your primary residence. You will likely be making a contingent offer on your purchase. Important thing to consider are :
- When would you like to make the transition?
- Do you have somewhere to live in the interim?
- Are you prepared to negotiate up or down depending on how things progress?
There are many moving parts in these transactions. I highly recommend interviewing agents prior to listing and ask them point blank if they have experience with contingent offers and sales. These tend to be the most complicated retail transactions.
This type of purchase gets into the realm of off-market deals, flips, income properties and beyond. If you want to get into real estate investing there are many nuances and variables to consider. The most important is knowing exactly what you are looking for and how you want to acquire the asset. A top agent will know of the best deals as soon as they hit the market or even before they are available to the public. Important key items to consider are :
- Income property for steady income stream or flip for quick gain
- Initial investment and how financing will be utilized
- Costs associated with purchase, rehab, and sale
- Neighborhood trends and surrounding market factors
To Wrap Up
By working with a top agent, you can save not only money but your most valuable asset, your time and peace of mind. Keep this in mind when choosing who to work with since all agents are not created the same. Seek and ye shall find!
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