Yesterday’s blog post identified one solution for buyers which we’ll call the Gunslinger Special – where you wait patiently for the perfect home and when it hits the market, call JtR and give it everything you got.
What are the other options?
First, let’s note that you will get credit for any seller contribution to the buyer-agent fee. On my 2% Gunslinger Special, I’m going to try to get the seller to pay all of it, and sellers who are offering 2.5% means you get the 0.5% extra paid towards your closing costs. The form you will sign states this clearly, and it will apply to any agent you hire.
But it will be smart to expect to pay all the fee, and if the seller happens to pay some or all of it, then yippee. Why? Because the hot buys – the houses you want to buy – will probably have multiple offers. You don’t want to lose out because you insisted that the seller pay some of your agent fee. Eventually, there won’t be any seller contributions any more, it is just how fast we get there.
Option B – You are early in your search, and you’ve already experienced the pesky open-house agents hounding you to sign an exclusive-representation agreement. But the idea doesn’t sound too bad because you know you need to hire an agent to see homes for sale that aren’t open houses, and you wouldn’t mind the extra help.
Their fees will vary wildly. Any agent who is charging 1% or less is only looking to open a few doors and have a $500 transaction coordinator manage the paperwork for you. Those who charge more will razzle-dazzle you with their list of 10,000 Things I Do For You.
Have them show you one house as a trial before signing. If they say anything about a “dream home” or only identify the name of the rooms when touring the house (“here’s the kitchen”), know that you can do much better when hiring an agent.
You will end up making a decision based on your gut feeling, but no matter who you hire, check their Zillow profile. Punch their name and the word Zillow into Google search, and it will pop right up. Here’s mine:
If the agent works on a team, read through the reviews to find their sales and see what their buyers had to say. Being the “Neighborhood Expert” isn’t nearly as important as having a solid and recent history of closing sales with buyers.
When you go to sign their form, choose the option that you can cancel any time.
Option C – Go direct to the listing agent. Don’t do this just to get a piece of the commission by reducing the price or having them pay your closing costs – it’s doubtful either will happen. Go direct to the listing agent only if you are absolutely desperate to buy this home. It’s likely that you’ll still have to pay well over list and get little or no help, but hey, you should get the house!
You will still have to hire them as your agent to buy the house, and it is inevitable that every listing agent will have you sign this form to say you are unrepresented, and they don’t owe you anything. It will make you think about getting good help on your side, but once you engage with them, it will be too late. They will hold it against you and sell the house to anyone else just tp teach you a lesson.
All of these options are terrible, and I apologize on behalf of the real estate industrial complex for screwing up this lawsuit so bad that it makes home-buying more difficult. Trying to buy a house is difficult enough!
If you want to avoid this misery, buy a house before August!
Nothing against ‘dream homes’. They start at $10,000,000 around here.
I’m with you Jim re: buying a home in the coming wild west market. As for dream homes…
…in the mid to late 90’s my dream home would’ve been oceanfront in Carlsbad. Fortunately I couldn’t afford it. Those pictures of zillion dollar homes tumbling into the ocean do give one pause!