Just getting started. Do I honestly need a real estate agent?

Question

I'm just starting out.  I'm considering a local single family home to rent out as an investment.  Do I need a realtor to do this?  Why would I want to sign a buyers agreement and disclosures?

Mindy Jensen · Answer

@AQui Mizrahi, the way commissions are typically set up, the SELLER pays everything to their agent, and their agent splits it with the buyer's agent.

You should absolutely have an agent representing your interests in any transaction - especially if you're new to investing. This is an enormous purchase, and the Colorado Contract to Buy and Sell Real Estate is 17 pages long, small type, written completely in legalese. If you aren't fluent, you'll miss things.

Fred Heller · Answer

The bigger question is why wouldn't you want an agent? The listing agent is legally required to look out for the best interest of the seller. Don't you want someone on your side who is looking out for your best interest?

AQui Mizrahi · Answer

Wow you guys.  This is really helpful.  Thanks for the advice.  Doesn't a realtor take 3% of her 6% commission from ME though...

Curtis Bidwell · Answer

From your vantage point an agent can only help, because it is the seller paying the commission.  On homes I've bought w/o agents I generally assume they are asking retail.  First point of negotiation is removing 6% because they aren't using an agent - or in some cases splitting the cost so both see a benefit.

I'm buying one now w/o agent but both of us know what we're doing, I used a land consultant to negotiate (complex deal with easements, etc), we put the PSA in front of an attorney for review  and then opened escrow with title company.

The consultant cost a flat $3k (.08%).  This deal comes in at almost 10% below asking. But the biggest advantage to me is access to my property for development.

Mark Nolan · Answer

@AQui Mizrahi

Welcome to Bigger Pockets. It is great to see you hear.

Rachel H. · Answer

It really depends on your style and way of doing things. I went this route when I first started out but it didn't work out. Too much paperwork. I worked better just dealing with sellers directly. Everyone is different. The challenge is finding what works for you. Hope this helps!

Russell Brazil · Answer

There are two things I love that happen when I am the listing agent on a property I know will not be hot, thus hard to move. I love when an offer comes in from someone representing them self, or from a newer agent.  Ive already won the negotiation process when this happens. I am almost always going to talk the self representing buyer into a full price offer, and may talk to them into some other bad decisions on the offer. With the new agent, Im able to bully them to do what I want, since they need to close the deal in order to buy groceries.

Bill Gulley · Answer

Welcome to BP!

Agree with Fred and, if it's a listed property, it's really not costing you much in the sale price.

Question is, how well do you know real estate, valuations, can you pull comps? How's your real estate law? Ar you or your seller insured to cover any screw ups?

If you know what I know, you don't need a Realtor, if you don't, it would be a very good idea to use one.  Good luck :)

Just getting started. Do I honestly need a real estate agent?

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