[quote=bsrsharma]Buyer’s agents are very helpful and essential for a first time buyer. For others, in a buyers market, if you feel the need for an agent, you are not ready to buy and you should do more homework. (I believe an agent, like any other human, puts his interests above a clients interest). Also, things work better, especially when buying REO, when you use the same agent (or an agent’s close friend) as the seller’s agent after you have done your homework . The empirical formula for getting really good REO deals seems to be Cash + listing agent with incentive![/quote]
Edit: In re-reading the below post, I must mention that I don’t think a buyer agent is always necessary. Just like any service, you can do it yourself (chef, mechanic). However, as with other services, learning a skill requires work and experience and doing it well is not generally easy at first.
My concerns with the quoted post by brsharma:
Buyer’s market:
This is defined super locally and not nationally (as the news media would imply). For example, it is very hard to get an offer accepted on a property listed below $200k in a desirable area. That’s because at those price points and in those areas, it is a seller’s market.
Not ready to buy:
While lots of people are not ready to buy, the act of asking for, or getting free professional consultation, negotiation, and assistance does not seem to be an indicator of unreadiness.
A large percentage of my buyers (most of my business) are people looking for a more experienced view (I do this every day and they do it about twice in their lives) and for help in formulating strategy and reconciling wants and needs.
Others are just too busy to deal with it themselves. Lots of professionals need someone who will help them work their purchase around their schedule and keep them from getting screwed.
Self-interest above client interest:
This is totally accurate. That’s why I don’t recommend ever using the listing agent as your buyer agent as well. Double-ending is legal but presents an inherent conflict of interest. Short sales are the only real exception (both sides are negotiating with the bank). Do you really think the bank or the seller give a shit if the buyer pays 10 or 15 percent over the market value? LOTS of people pay too much by doing this. Further, once the agent’s loyalty is split he really cant advocate for things like repairs or better inspections or disclosures.
Showing up with cash to a listing agent is the real estate equivalent of tattooing “sucker” on your forehead. It relies upon the honesty of a listing agent you have never met. Further it relies upon the idea that the agent will be honest with you and dishonest enough with their client to push you to the front of the list. There is basic gap in the logic here. I don’t recommend it as a strategy.
Doing your homework:
This is always a good idea. However, I think that a professional advocate for buyers will be better dialed in at getting you the best information.
Thats not always true. Recently I was brought into a deal as a consultant where the buyer agent had written an offer with NO LOAN CONTINGENCIES. In other words, if the buyer lost his job or the appraisal came in low or the bank went out of business, the seller kept the buyer’s ($10,000) deposit.
