Do I still need my realtor?

32 Replies

Good morning,

Earlier this year I decided that I wanted to buy my first place. I met with a family friend who is a realtor and he started to show us homes. For one reason or another, we didn't go with any of the homes he showed us. I have since discovered Redfin and I love that I can browse homes at my own convenience without feeling like I'm wasting my realtors time.  I have already booked a few showings.

Although my realtor has put in some work for me (showing homes, meeting in person) now it seems that I'm doing all the research myself.  

What should I expect from a realtor not that I have been educating myself via BP?

Do I still need a REI? Or should I just use a Redfin agent?

Thanks 

MP

@Markus Powell


Who is showing you the properties? It's usually a Realtor. 

My agents understand that we are no longer the gatekeepers of the information, and most of our clients are just like you.  They prefer to do their research for homes online.  The value my agents provide is now in taking great care of them through the entire process.  You can do all the research you want, but nothing trumps real world experience.  Our buyer agent team beats the market 8 out of 10 times on negotiations and guides the client through the entire process.  There are a ton of moving parts, and a local expert is invaluable.  

The big question should be which agent is going to provide you the most value and look out for you?

@Markus Powell

As a BUYER, why would you NOT want a realtor on your side? Real estate commissions are paid by the SELLER, so as a buyer, the only reason to dump an agent is if they are a hinderance or a liability. What @Zach Sikes said is correct - agents in the internet-age are focused on negotiating, coordinating, and monitoring all the elements that Redfin can't help with, while providing customer service and expertise (hopefully) that lessens the stress of such a big transaction

As a buyer I would 100% use a realtor - the seller pays for this. As a first time buyer I would 200% use a realtor.

There are many potential issues that you might not be able to see for yourself that a good realtor will point out.

Is there low income housing just around the block? Is there some in development?
Is the foundation cracked?
Are those spots on the ceiling indicative of mold from a roof leak?
Are there radon or other environmental issues in that area?
Is there an area a couple blocks away that would actually appreciate much better for some reason?
Is there a chance that area gets rezoned and now you're in the 8th best elementary school instead of #1?

Just some random examples but the point is free advice from an expert is not something I'd pass up as a buyer.

Sell side is a separate matter (would still use a realtor but negotiate down the commission).

Echoing what those above me said, that is kind of how it is supposed to work.  An agent will never be able to pour over the list of potential properties for you to find that one nugget simply due to time constraints.  If they have 10 clients, their time will be divided among the ten but yours isn't.

I just locked in a deal for an investor client today.  They found it from the sources I sent to them and I negotiated them a 12% discount off purchase price.  I think I earned my $295 broker admin fee on this one.

If you agent doesn't own or understand investment properties you have another problem on your hands IMO.

@Markus Powell Set up the showings through your family friend realtor.  The seller pays the commissions anyway so no realtor get's paid unless you buy a deal.  This way the showings are targeted and things that you actually want to look at.  Otherwise you will be giving both sides of the commission to the listing agent.  Which is not terrible either.  This can get you some leverage on the sale price too.  You have a couple of different options here.  Best of luck to you.

Markus, I’m not just replying because I’m a Realtor, but I had a similar question as yours when I started as a real estate agent, asking my broker if there was even a job outlook for this profession or would technology take it over. He’s been in the business for 32 years, and to this day he says it is very important to have that person-to-person interaction, especially when buying a home. For most people buying a house is a persons biggest purchase in their lifetime, having a professional with that transaction is very important.

Hi @Markus Powell

RedFin agents are still agents. So you still have an agent, well several of them really. If you broke up the purchase process into 150 possible decision trees. Then you broke them up into those steps. 30 of them require a license, the rest do not. So you start a file down the process using off shore labor. Once a decision tree is met it goes to the next resource. Once one happens that requires an agent they assign an agent to that task. The agent performs that task and is done. It goes back to someone in a help desk to push it to another step, who sends it to another person. This continues until an agent is needed to perform a task. Then an agent (most likely a different one) steps in and performs that task and throws it back to the desk who continues down the process.

So you still have someone at certain points performing specific tasks, but no real agent looking out for your interest through the transaction. When you call/email for help expect a new person each time, who is not familiar with your specific deal. So you can save money and only you can decide if having one is right for you or you are willing to take the "offshore tech support" role in your purchase. For some it is well worth it, for others not.

Good luck whichever way you decide!

The question is : do you value the expertise in negotiation, valuation of the homes and the ability to know what isclosures and repairs to ask for and when?  

I bought my first house without and agent and didn't has for a termite inspection which i didn't realize until way later that asking for that up front could has saved me thousands...

@Markus Powell  Keep using your agent if you feel like he is a knowledgeable, qualified one. Redfin agents work on salary, which attracts agents who wouldn't make it based on commission, or as I like to call it, a direct reflection of the quality/value you provide. When buying a house, you want expert guidance, not someone unqualified.

Many many transactions occur because there is a relationship between the two agents on each side of the deal. A redfin agent will not have those relationships, so you put yourself at a disadvantage in competitive situations.  

Yes use your agent.  I thought you were going to say -  "this is my 18th deal.  I know how exactly what I'm looking for and how to value the property.  I also know the whole process cold.  I found the deal completely on my own.  It is off-market."

If that's the case, go for it.  If not and the agent you've been working with hasn't been incompetent or unethical, stick with him.  Especially if it's a family friend!

I think what Russel Brazil said needs to be restated, using a Redfin agent will put you at a major disadvantage in a competitive situation with multiple offers. A major disadvantage.

Thank you, BP!!! 

I'm so glad I have found this community. It seems that staying with my/ a realtor may be my best option. 

I had a meeting with my realtor yesterday decussing my RE goals.  Durring this meeting I told him my RE stragity currently is to find a place and pay what my curren rent is (withm20% down) in a simmalr place. He said he may have some off market deals but so far all of the places that he shows me I have allready found on Redfin. Or are out of my price range and need rehab.

I came out of the meetiing feeling that I have a better chance of finding my place then he does. I dont think he gets my stragity.

I what to start reaching out to other realtors who have more expericne with investors.

How commeted should I be with a realtor?

thanks 

MP

Even if you find the property, you should use your "family friend" to represent you in the transaction. They will get paid by the seller, not you. You get their services and experience for free.

Originally posted by @Markus Powell :

Thank you, BP!!! 

I'm so glad I have found this community. It seems that staying with my/ a realtor may be my best option. 

I had a meeting with my realtor yesterday decussing my RE goals.  Durring this meeting I told him my RE stragity currently is to find a place and pay what my curren rent is (withm20% down) in a simmalr place. He said he may have some off market deals but so far all of the places that he shows me I have allready found on Redfin. Or are out of my price range and need rehab.

I came out of the meetiing feeling that I have a better chance of finding my place then he does. I dont think he gets my stragity.

I what to start reaching out to other realtors who have more expericne with investors.

How commeted should I be with a realtor?

thanks 

MP

 Personally I would contact the realtor who listed each of the different properties that you want to take a look at

After 35 years of purchasing houses I have found that using one realtor will cost me money just about each and every time

Think about it the agent who listed the property will get double commission if they also sell the property

You cut way down on the back-and-forth between you and the buyer

you also many many many times get inside information  when you speak with the agent who listed the property,  that you never will get if you use an agent who did not list the property 

@Michael Plante by using the listing agent, the buyer has no representation. That is fine for an experienced buyer, but most people have only a few transactions to their name. The listing agent is also violating the fiduciary trust of his client by giving you "inside information" so I wouldn't trust them to do right by me as a customer.

Originally posted by @Anthony Dooley :

@Michael Plante by using the listing agent, the buyer has no representation. That is fine for an experienced buyer, but most people have only a few transactions to their name. The listing agent is also violating the fiduciary trust of his client by giving you "inside information" so I wouldn't trust them to do right by me as a customer.

 I have had my real estate license in NY, NC and FL

Have flipped, rented and sold with owner financing in all three 

I stand by what I have stated above 

@Markus Powell the fact that you don't know why you need an agent is exactly why you need an agent. I am saying this for your own good - you don't know what you don't know.

Maybe the agent you have isn't a good fit but rather than have no agent, just find a better one. 

As far as finding properties yourself, yes most buyers will search and find properties they want. Gone are the days of the agent with a listing book picking houses for you. The point is that a realtor does much more than find houses on the internet. 

I am not a real estate agent, but I have done about 20 transactions through agents.

You should use the agent. Practically no cost to you & you will have someone representing you.

@Michael Plante that is great for you, but do you really think that is good advice for the person asking the question? It would make sense that as a licensee with your experience, you would not benefit from having a buyer's agent. The whole point here is to give advice to people with less experience.

Originally posted by @Anthony Dooley :

@Michael Plante that is great for you, but do you really think that is good advice for the person asking the question? It would make sense that as a licensee with your experience, you would not benefit from having a buyer's agent. The whole point here is to give advice to people with less experience.

 Yes I do as I did my first deal like that when I was 20 years old

Then I screwed up and for years stopped contacting the listings by agent because I listened to agents telling me I should go with one agent 

I would say conservative estimate I lost my self over $200,000 by not contacting the listing agent

Originally posted by @Russell Brazil :

Many many transactions occur because there is a relationship between the two agents on each side of the deal. A redfin agent will not have those relationships, so you put yourself at a disadvantage in competitive situations.  

This is a very important point - my first property would've never happened if my realtor wasn't friends with the other realtor. Asking price was $178k, the offers were me @ 181k financed @ 20% w/ all contingencies vs. full asking price cash offer - $178k. 

Both realtors recommended folks to the same mortgage loan officer as well so they knew when my loan officer "MB" said I was qualified that it wasn't going to fall through. If there was no relationship there would be no question, seller's realtor would recommend the $178k cash offer but "a loan from MB is as good as cash!" 

That property has since appreciated enough that I could sell for a >200% profit 2.5 years later.

MP,

Did you sign a buyer representation agreement with the realtor you were initially working with? If so you will owe that salesperson a commission regardless when you make the purchase. 

You say that you are doing all of the research yourself. Is this the fault of you or the realtor? 

An agent is there to serve your best interest and negotiate on your behalf putting your interests above their own. Serving you is of most importance to a great agent with a commission check being a bonus. 

Ive purchased three personal homes and one rental unit, so by no means am I an expert, but i will say that have found the use of real estate agents to be universally frustrating. Ive never bought in the same house twice and at this point have purchased in two states... so i cant say my experience was limited to area or state.

Basically i see it as 6% to open the door and keep the buyer and seller from actually negotiating.

Im hoping to find an agent that luves up to the picture that many of you paint, but thus far have not had that experience.