How Realtors Help
Why You Don’t Want to Buy a Home without a Realtor
In a time when for sale by owner homes are becoming more popular many people are asking themselves why do they need to use a Realtor? Although on the surface it may look like a good idea, there are many reasons why you should not attempt to buy real estate without a professional by your side.
Here are some key points to consider:
When a home is listed for sale through a real estate brokerage the seller is obligated to disclose any defects about the home that would deter a person from buying the home. The Real Estate Agent is also obligated to disclose this same information to prospective buyers.
If a home is not listed for sale with a real estate brokerage and is being sold by the owner himself, these rules do not apply. A seller is not obligated to disclose any information about the home. If he is not obligated to do so, then why would he?
It is in your best interest that you deal with properties that are listed for sale through a brokerage. Otherwise there is no recourse for problems that may arise.
Real Estate Agents have insurance to cover unforeseen problems that may occur in the process of buying a home. Insurance is mandatory for Realtor’s to trade in real estate.
Realtor’s are members of real estate boards (OREA, CREA, and TREB) and are held to a high level of professionalism. They must abide by their code of ethics and look out for their client’s best interests at all times.
Homes owners do not and are not held to any standard what so ever. There is no course of action that can be taken when a problem arises when there are not Real Estate Agents involved.
Once you find the home of your dreams you will have to negotiate a price, closing date, and the conditions of the sale. If these terms can’t be agreed upon then there is no deal. A Realtor is trained in the art of negotiations and often acts as a mediator between the buyer and seller. When emotions run high it is very difficult to come to an agreement even when the issues seem small. Have a professional do the negotiating. It is what they are trained to do.
The market value of a home is determined by examining comparable homes that have recently sold in the same neighborhood. Don’t be confused by thinking that a home’s asking price is reflective of the market value because sometimes that is simply not the case.
Only real estate professionals have access to home’s sold prices. A realtor will search the database of homes that have recently sold to determine what the actual market value of a home is. A realtor will make sure that you never over pay for the home of your dreams.
Market value also always includes the agent’s commission so why would you pay the same price for a home that is being sold without agents? To be fair, a buyer that purchases a home from a for sale by owner should pay 5% less than what other comparable homes have sold for in the same area. It only makes sense.
But how would anyone know that information without a real estate agent?
In a typical transaction the deposit is held in the real estate brokerage’s trust account until closing. This trust account is a separate account from the business’ everyday account and is used only to hold buyers deposits.
Should anything happen to the brokerage, (ie. Bankruptcy, being sued, etc.) the deposit cannot be touched.
Should your transaction fall apart and one of the parties decide that they don’t want to close, your deposit is being held in a neutral setting. In this situation, a mutual release form would need to be signed by both the buyer and seller in order to release the deposit from the trust account.
Sellers do not have real estate trust accounts. Do you trust the seller to hold your money for you?
- Free Buyer Representation
In a real estate transaction, the seller pays the commission to the listing agent who is representing themselves as well as to the buyers’ agent who is responsible to look out for the buyers’ best interest and negotiate on their behalf.
If representation is free why would you want to waive that right?