Do I need to use a REALTOR to buy a home?

November 30, 2018

There is a lot of information out there about buying a home, whether it is buying your first home, buying your step up home, or buying your forever home.  Each of these purchases work exactly the same, and a common question that comes across my desk all the time is, “Do I need to use a REALTOR to buy a home?”

The simple answer is no. 

The complex answer is you should, and here’s why:  A REALTOR is a specialist.  They help their clients buy and sell homes each and every day, so they are experts in the process and the legalities of buying a home.  Here are a few of the many things a REALTOR will be able to do for you:

A REALTOR works on your behalf for FREE!

The best part about using a buyer’s agent is that they cost you nothing.  Their services are paid for by the listing agent, who splits their commission with the buyer’s agent for bringing a buyer to their listing.  The listing agent and the seller make a deal when they decide to put the house on the market.  Part of the deal is how much commission will be, which is typically 6%, and how much that the listing agent will pay to a buyer’s agent, which is typically 3%. 

A huge myth is that if you go it alone, the listing agent will be able to do all of the paperwork for you, and they will be able to help you through the process.  In turn for doing this, the listing agent will take a reduction in commission and give it back to the buyer, thus making it a good way to save money.

In reality, what happens is that the listing agent will not help you negotiate. They work for the seller, so their job is to negotiate in the seller’s best interest, which is getting the most money for their home.  This includes when it is time to negotiate any repairs, deal with contingencies, and every other step of the process.  Your interests are not the listing agent’s interests because they do not work for you.  Period.

A REALTOR will be able to search the MLS for you

The MLS stands for Multiple Listing Service.  This is the place where all of the listing agents list their clients’ homes for sale.  Through the MLS, agents have access to thousands of homes for sale.  It is the most reliable service that you can use to find a home.  Once your REALTOR knows the specifics of what you are looking for, they will be able to act as a second or third set of eyes.  REALTORS have seen a lot of the homes that are on the market in person, so they will also be able to point ones out that may not look so great in the pictures.  

A good agent will also be able to set you up with automatic searches that will ping you via email or text as soon as a new home hits the market.  This is an invaluable tool to use, especially when there is a lot of competition in your price range, which is very common for first time home buyers. This allows you to get a jump on the competition (other buyers).

A REALTOR can set up multiple showings 

When you use a REALTOR, they will set up showing tours for you to go look at homes that you are interested in.  They have the ability to quickly get in touch with other agents’ showing services, and set up your home tour so that you can go see 6-8 homes in just a few hours.  If you are running ahead or behind, your REALTOR will easily be able to adjust the schedule on the fly, saving you tons of down time on your showing tour.

Your REALTOR will also help you keep track of the homes that you have seen and will have instant access to disclosures and back door information that the general public does not have.

If you call listing agents to set up showings on their properties, you are usually at the liberty of their schedule, and may not receive a call back for the next day or two, if you get a call back at all.  Unfortunately, that is a very common occurrence.

A REALTOR will help guide you through the legal contracts involved with purchasing a home

The purchase contract in the state of Texas is 9 pages long and there are multiple addenda and disclosures that go along with this.  Typically, a contract package is anywhere from 22-30 total pages over multiple documents.  Your REALTOR knows which addenda and disclosures are required, which ones should be used to protect your interests, and they know the ins and outs of the contract.  

The contract you sign is a legal document that binds you to the agreement to purchase the home.   Since it is a legal contract, either party can sue the other party for damages if a portion of the contract is not carried out correctly or if a deadline is not met.  This is serious stuff and your best bet is to use a professional.

Your initial offer is made using these contracts and addenda, and is signed by the buyer.  It is best to know what each part means and what each deadline looks like so that you don’t get into a mess of trouble during the transaction.

A REALTOR will help negotiate your offer and make sure you are utilizing seller concessions that are customary for the area

A listing agent’s favorite person to run into when showing one of their listings is the buyer that comes along and says, “I don’t need an agent.  I’ve bought and sold 4 houses and I know exactly what to do.”  Obviously as a first time home buyer, you will not be able to say this, but a lot of us have experience negotiating prices of cars or bartering at a flea market.  How is this any different?

When you use an agent, you take all of the emotion out of the negotiation process.  An agent can tell the other agent, “this is what the buyer is willing to do” and the other agent has no idea that just a minute ago the buyer was jumping for joy and willing to go $10,000 higher than what the seller came back with.  REALTORS deal with people on a daily basis, and they learn to read people and situations, even when it is just over the phone.  Direct contact with the person that you are negotiating with, especially when they are a professional, is always a bad idea…even if you have nerves of steel and an incredible poker face.

Another thing that you just don’t know unless you do this every day is what is customary in the area.   This could be the amount of the option fee, the amount of earnest money, time line to closing, length of the option period, contingencies that are built into the contract, etc.  Is it typical for the seller to pay buyers’ closing costs in the current market conditions in the area that the home is in, or is it typical for a seller to offer a home warranty, and how much should they contribute to it?  These are things that you can only know if you are selling houses on a daily basis, and they are also things that change with the market.  If you do this wrong, you may be leaving money on the table, or paying for things that the seller should pay for.

A REALTOR knows the buying process inside and out

And this is important!  Once your offer is accepted and you have an executed contract, your realtor gets busy working with the escrow officers at the title company to open up the title search, making sure your option fee and earnest money checks go to the right place, helping you set up inspections, negotiating repairs with the seller, making sure your loan is getting started and progressing, helping schedule the appraisal, working with the title company to make sure that you have a clear title, ordering your survey, making sure that the seller has satisfactorily completed all repairs, setting up your final walkthrough, and so much more.  It’s a very involved process that usually happens in 30 days or less.  It is important to have someone working for you that will help you with every step along the way so that you can go on with your day to day while your house deal closes on time.

Based on their previous experience in selling homes, your REALTOR will also be able to anticipate any issues that may arise, thus saving you time and money.

Your REALTOR will be there with you at closing

Closing time is fun for everyone involved.  By the time you get to the closing table, your REALTOR will have worked through every bit of paperwork with you, the title company, and the lender to make sure that all of the documents are correct and that all of the terms of the contract have been met.  As you sign the closing documents, your REALTOR will be there to answer any questions that you have and will be able to scan parts of the paperwork for any last minute changes that may have taken place as the title company and lender go back and forth.

There is a lot of paperwork to sign at closing, so come ready!  The moral support of your REALTOR may sound like it’s not a big deal, but you will greatly appreciate it as you are signing your way through a stack of paperwork.

A REALTOR is there for you

In conclusion, your REALTOR is there to serve you and your best interests.  The services of a buyer’s agent are free to the buyer, so it doesn’t make sense to go it alone.  REALTORS are people persons and relationship builders, and most are a joy to work with. 

As always, if you have any questions, visit our contact page to shoot us an email, text, or even give us a call!

About the author 

Jack Allen


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