That is the question. Somewhat regularly I will come across a home buyer who is about to sign a contract or already has who is “just working it out directly with the seller”. After all, they are all grown-ups and can manage themselves. People buy and sell properties all the time without the use of a Realtor. You know, it saves everybody a bunch of money by not paying someone to do nothing more than just push paper.
(Insert sound of record scratching here.)
Before I go any further, let me explain that this isn’t just some pro-Realtor propaganda. I’m a fan of using good professionals for a lot of different things.
“Hey, I’m having chest pains. Let’s go ask that lady standing over there on the street corner if she can fix it.”
“You need a loan? Talk to Guido. His number isn’t listed and you can’t find him, but he’ll find you. I’ll put the word out on the street.”
“Brakes not working on your car? I know a guy. He’s really good at training dogs to do tricks. I bet he could figure out your brakes.”
I know. I’m being a little snarky here. But seriously. You are making the largest single purchase you might ever make by taking on a large amount of debt. You are becoming liable for something that could turn into one cash-burning issue after another. Aside from the house, you might be inheriting any liens that previous owners have earned. Buying a home in and of itself isn’t dealing with a heart attack, but if things go south, you might end up with one.
If they are doing their job as they should (I’m sorry to say that isn’t always the case) a professional Realtor will:
- Make sure the seller completes the required disclosures so you have a better idea of what you are buying in to.
- Make sure a good contract is used that will protect BOTH the seller and you, the buyer, if things aren’t what they should be.
- Provide you with the fair market value of the home to make sure you aren’t getting ripped off before you pay for any other services that are part of the process.
- Be your connection to mediation after closing if you find the seller wasn’t quite (or even close to) accurate with their disclosures.
Yes, your Realtor will expect to get paid. And now… the rest of that story. Around here, the seller actually provides the compensation for the buyers’ agent the vast majority of the time, even though that agent may work solely on behalf of the buyer. Even if you don’t use a Realtor, do you really think the seller is going to take less than the house is worth because they didn’t have to share it? Maybe. Probably not. It’s not really saving you anything.
Yes, these situations can and do work out just fine if you don’t have any professionals involved in the process. However, real life local examples I’ve heard of just recently are:
- Buyers’ signed a contract that obligated them to buy the house no matter what, even if it fell in on itself.
- Buyers ended up with major repair costs months after closing. The issues had been long coming, but the sellers just didn’t bother to tell them because “it wasn’t actually broken yet”.
- Sellers’ ‘custom’ purchase contract provided no contingencies based on any inspections the buyers did (meaning they could get an inspection, but had no right to negotiate based on what was found).
All of these are generally non-issues when you are working with a professional like a Realtor. Or a professional lender (an actual person, not an automated online lender robot). Or a professional inspector. Or…. Or…. Or…..
I think you get my point.
So how do you know if they are a “professional”? Ask around. Ask people you know and trust. Ask people that genuinely want you to succeed. Who would they work with if they were buying a home?
If you aren’t quite sure about the whole process, get educated. The Center for Financial Resources has a free Homebuyer Express class that is perfect for anyone anywhere in the buying process. You can find our class dates on our calendar. If you aren’t in Sioux Falls, you can attend class by video conference. You can also call us at 605-330-2700. Yes, we are professionals too when it comes to home buyer education.
Whatever you end up buying, just use a professional.
written by Breck Miller
images courtesy freedigitalphotos.net