Is an RE agent necessary for a first time buyer?

Question

Hey all,

My wife in I are looking for a multi-family property in Salt Lake County and we have been using a realtor. As we have gone through our search and mentioned it to our friends and family, all of them have discouraged using a realtor, because it ends up costing way more money than it should. Additionally, there is a huge fad going around Utah with Homie, which advertises that it has streamlined the process and lowered agent commissions.

Long story short, I'm having a hard time deciding if it is worth going at it alone vs. having an agent. We are first time buyers but have some book smarts due to schooling background and whatnot.

In your opinion, is getting an agent worth it? What are the pros and cons? Apologies in advance if I botched some terminology or seem really uneducated. We're first timers!

Thank you!

Russell Brazil · Answer

Are you paying your agent, or are they being paid out of the sellers proceeds? (Either can be true)

When I buy in markets that Im not licensed in, I still use an agent....and I happen to be in the top 1% of agents nationwide.  You simply dont know, what you dont know, until it goes wrong.

And when Im on the listing side, I love when a buyer has no agent.  Who do you think Id rather negotiate against....someone who has never negotiated anything in their life, or someone who negotiates for a living?

Jackson Pontsler · Answer

I'm not a realtor, I have used wholesalers and realtors to purchased my flips and rentals.  If you are looking on the MLS you will be using an agent unless you have a career like a lawyer where you can represent yourself otherwise the listing agent can argue they brought you in and will pocket both sides of the commission.  If you are looking at off market deals a realtor isn't necessary but it will be up to you to do your own due diligence carefully and not have someone to hold your hand through the process.

Overall you get what you pay for and once again if you are looking to purchase on the MLS you will be using a agent.  Fortunately you will not be paying them as they will be taking their commission from the seller (as stated 6% total 3% to each agent)

Does this clarify your question?

Cherie Orellana · Answer

I absolutely think having an agent is important. They have  experience, expertise, skills, knowledge and often have personal relationships with lenders and other agents that can give you a competitive edge. As a buyer you do not pay your agent and it will only benefit you overall. Buyers often have an emotional investment in properties and your agent can help you navigate more from a business standpoint as well and making the best decisions overall.  A seller has an agreement with the brokerage to pay a specified commission. In Utah it is typically 6% (3% listing agent commission / 3% buyer agent commission) this commission is again split with the listing or buyers agent brokerage. What many buyers do not understand is that with this agreement the seller is paying that amount regardless if the buyer comes in with an agent or not. The difference is that both sides of the commission or the full 6% in most cases would go to the listing agent as they would be representing both buyer and seller.

There are a few occasions that this can be advantageous. I myself being a real estate broker have made offers letting the listing agent represent both sides. However right now in this market there are typically multiple offers within 24 hours of a competitively priced property. They must present all offers and it typically would be most beneficial to have an agent with experience and negotiating skills to help you make the best decisions and help get your offer accepted. Not being limited to trying to do what’s best for the other side as well as the listing agent would be.

You also mentioned Homie. I can not express how often I hear people within and outside the industry complain about this new trend/ brokerage. They are extremely difficult to get a hold of, often miss price properties well below market value and cost sellers Far more in time and money than had they paid for a full service knowledgeable listing service in the first place.  I have heard multiple appraisers complain about the incorrect information listed on the mls as well. Mistakes like this cost sellers money!

If you are already working with an agent As you said and they are doing a good job for you I would hope that you would be loyal to them and have commitment as they have likely already worked hard helping you in your search for your property.

It is almost always best to have a Realtor Representing your best interests when buying or selling real estate.  There are of course occasional exceptions. Trying to list a home FSBO or when you are out looking for a property as a buyer are definitely not one of these few exceptions and you should definitely have knowledgeable representation.

Is an RE agent necessary for a first time buyer?

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