As a buyer, do I need a realtor?

Question

I'm constantly reading about REI now and I'm still not at a knowledge level where I feel comfortable to jump in. I do, however have the savings and finances to start buying properties, especially because I tend to be frugal and budget aggressively with my personal finances. And this budgeting and frugality leads me to my question, which may seem naive so please bear with me:

As a buyer, what value an agent provide for me, and if you are an investor who is purchasing and using an agent, why do you use one?

Buying using an agent- even among investors- still seems to be the norm. Why do investors use an agent, and would it be recommended that I start my search with a real estate agent, especially considering:

• I keep up with local listings and have found several properties that over the last few months on my own that could make financial sense.
• As a negotiating strategy, I could match an existing offer on a property, but offer to do the deal without a buyer's agent/fee (saving the seller 3%). There are other negotiating strategies I could envision as well.
• I have started collecting data on what houses sell and for how much in my area, along with stats, to make sure I understand what properties are worth and how long they will take to sell, so I'm not sure there is a lot of value-add an agent can provide there either.

Russell Brazil · Answer

This is possible if there is a Variable Rate Commission on the property.  What that means is the seller and listing agent have entered into a contract with one another where they have agreed that the commission can change under certain circumstances, such as an unrepresented buyer coming with no agent. (The commission could vary for any number of reasons, this is simply one of them.) Variable rate commissions are legal, however that agreement is between the listing agent and seller, and that fact must be disclosed in the MLS.  Engaging in one while not disclosing it may subject the listing agent to an ethics violation.  It is one of the more common ethics violations I see agents in my market getting in trouble for.  You however as a member of the general public typically will not be able to see in the MLS what cooperating commission is being offered and if there is or there is not a variable rate commission.