Earlier this week, the national real estate brokerage Redfin made headlines as they’ve announced you can now buy a house without a buyer’s agent. Brilliant, you say? Did you know you can buy a home without a buyer’s agent right now without the help of Redfin or anyone else? There’s no requirement that you work with a buyer’s agent to buy a home for yourself. But, is that the right plan for you? I am 100% biased in favor of real estate agents, so you should take my advice with a grain of salt. However, I think buying a home unrepresented really makes no sense. Here are some of my thoughts on the issue.
- I understand that people want to save money. We all want to save money. The odd part about this particular situation is that you are asking that the seller save money by not paying a cooperating broker commission for finding the buyer. In essence the seller saves the money. And that’s a good thing right? Not if the buyer is paying for it. The next line would then be, “well, the seller can afford to ask for less on the sale since they don’t have to pay a buyer agent.” Do you really believe that? Let’s say your neighbor uses an agent and their house sells for $400,000. Your house is the exact same but you aren’t going to hire a real estate agent. Are you going to list it for less than $400,000? I’m pretty sure you aren’t.
- People have spent decades looking to get rid of real estate agents via technology, and it isn’t going to stop with ibuyers, instant offers, or anything else. People, in general, have a hard time paying others for their work. For example, when you take your car to have the oil change, you are convinced that the mechanic overcharges you. When you go to buy meat at the grocery store, it’s always too expensive. That logic holds up until we talk about what you make. Then, you are worth even MORE than what you make. This is human nature. Everyone else is always paid too much, but you are never paid enough. It’s what makes markets. We trade goods and services.
- Not using a buyer’s agent seems like a very bad idea. When I take first time homebuyers out, they are completely lost. There’s so much that goes into buying the right home; The home that fits the buyer’s style. This only happens when agents get to know their clients. And this is where I see the main issue with buyer’s agents in real estate. Sometimes clients will either not trust their agent, or the agent may not be that great. In these situations, I can certainly see why buyer’s would be hesitant to use a buyer’s agent. However, this has nothing to do with the seller, and the point of this whole idea is that the seller saves money by you not using an agent to represent yourself. They still have an agent! A professional working against you and your interests, how bad of an idea is that?
- I’m not worried. We’ve been through this before. If the market for real estate agents and real estate brokerages close due to technological changes, so be it. It may happen to taxi drivers. It may happen to truck drivers. Change is inevitable. I provide a service to buyers and sellers to real estate. If those people decide my services are no longer needed, it’s OK. I get it. To me, it’s no different than being fired or laid off. It’s unpleasant, but it happens. I choose to think positively. We can always choose to fill our minds with worry and negativity, but that’s just not what I’m interested in.