Top Home Mortgage News

Many people have come under the illusion that it is required that a buyer has a real estate agent in order to purchase a property; however, for most people that are not well versed on real estate and the real estate market, then this is true; although, if you have an extremely good understanding of the process, then you may want to consider making an offer without a buyer’s agent.

Myths about not using a Buyer’s Agent

Myth 1: Buyer’s Agents are Free for Home Buyer’s

The most common myth is that a buyer’s agent is free to use. This is not the case because the buyer’s agent is paid 2.5% from the sale of the property. The seller’s agent pays the buyer’s agent the 2.5%. With most properties in many areas reaching prices of $350,000 on average, this could mean an additional cost of close to $9,000.

Myth 2: Buyer’s Agents have the Your Best Interests in mind

In theory, a buyer’s real estate agent should work to get the best possible deal for the buyer; however, the way that the current compensation structure is setup, the buyer’s agent has no motivation to get the best possible deal for the buyer. Instead, the buyer’s agent has two objectives. These objectives are to get you to buy the most expensive house possible, and to get you to buy a house as quickly as possible.
Most people, when shopping for a property, would like to get the lowest possible price on the property; however, the buyer’s compensation is based on 2.5% of the price of the sale of the house. Why would any buyer’s agent want to negotiate a good price for you, if they know they will loose money?
The second major problem is for the buyer’s agent to close quickly. This means that the buyer’s agent wants to get the buyer to close on the first property that they see. If the buyer’s cannot decide on a property or if the buyer’s offers keep getting refused, then this will cause the buyer’s agent to do more and more work. The buyer’s agent does not make money unless a property is sold, so the buyer’s agent will try to convince the buyer to overbid or to close quickly on a property so that they can make there commission. The buyer’s agent will put undue pressure on the buyer to make a bad offer and close quickly.

Myth 3: Real Estate Agents are Better Negotiators than You

A buyer’s agent has no reason to be motivated to get you a better price; however, the buyer’s agent will want to get you the highest price possible for two reasons. The first reason is that they will make more commission on the sale of this property. Secondly, the property values of houses in the area will go up causing the price of future sales to go up as well.

Myth 4: Buyer’s Real Estate Agents have Better Access to More Properties

A buyer’s agent will actually provide you with less listings then if you were to search yourself. This is because buyer’s agents will specifically find properties that pay the most commission. They will bring you to properties that do not fit your criteria; however, the properties will fit the real estate agents criteria for making money. For example, they will not bring you to private sale properties or low commission properties; instead, they will find the highest priced, highest commissioned properties to bring you to.
By not having a buyer’s agent, it allows you to look at all properties, and it allows you to make an offer without pressure.

Save your Mortgage from the Bank. Simply Mortgages can Help!

Welcome back!

Related posts:

1. How to Hire a Discount Real Estate Agent to get the Most Value When looking to sell your existing property, you may live...
2. A Real Estate Agent’s response to a Buyer’s Questions Your email:  A savvy home buyer recently provided me with...
3. 10 Steps to Buying a House without a Buyer’s Real Estate Agent Never sign anything with a real estate agent unless you...