Ready to Buy a House?
When you buy a house it is generally the biggest purchase you will ever make. Some will buy many houses and others only the one. It’s a place to make memories and perhaps something you can gift to your children. On the other hand, you may buy many cars throughout your life. It’s a much smaller investment and less impactful to your overall life. So why apply the same principles of buying a car as you would when buying a house when one is far more important than the other?
How we Buy Cars
The thing about buying a car is that you shop around online looking for the best bang for your buck. You may travel to upwards of 5 dealers until you find the right one with a deal. By the way, if they are always giving out deals then how do they stay in business? The answer is that they aren’t. Generally, we show up ill equipped to understand current car values and against a person who may have sold 30 cars that month. They know the ins and outs. Meanwhile, you buy a car every 5 years. Sound fair? No, but the risk and costs aren’t so high as to make you go out and hire someone to represent you. You don’t mind explaining your situation 5 times to someone who at the end of the day only has a vested interest in themselves.
Real Estate Websites Enable Do It Yourself
Today, we are able to go on to a number of websites and search for the home of our dreams. We get a lot more info at our fingertips then we ever had in the past (though it’s debatable as to the quality of the data). We can reach out to each listing agent and schedule our own appointments. Sounds a lot like buying a car, doesn’t it? The difference is that the risk is much greater. A bad car will have you in a repair shop. Buying the wrong home will cost you many times more than that. But also, trying to use multiple agents to isn’t a good use of anyone’s time and you’ll spend more time traveling house to house than you ever will going to different dealers. Also, when you buy a car you won’t be tied to a particular salesman from 3 dealers ago. More on that to come.
Why Pick One Realtor?
You explain your situation once to someone who has a genuine interest in helping you find the perfect home. We use what learn about you and your situation to make sure that you get the most out of your time. For example, you may find that you can only use a certain loan type to buy a home (such as FHA), but what you may not know is where you can actually use the loan. Some condo buildings cannot allow for them.
An agent can keep you up to date on new listings that may in your interest. They can schedule multiple showings in a single day to maximize your time. Would you rather go out one day and see 6 homes that match your interest? Or schedule 6 individual showing across the week while hoping that your search on XYZ site was accurate? That’s not a fun way to buy a house.
Other things we do is learn about the seller’s situation. There can be many different reasons for selling, but sometimes they may be on a timeline. An agent can leverage this information during negotiations. Remember, this person has spent a lot time with you and wants you to succeed. Skills like these can help you buy a house easier and for less.
Most importantly, when you decide to DIY your home buying with multiple agents you may lose out on the ability to be represented. Remember, you’re contacting the seller’s agent. They are not there for your interest, but for the sellers. Why does the matter? There is a thing in real estate called, “Procuring Cause” and it is used to determine who is paid commission (half typically goes to the seller agent and half to the buyer agent). In Illinois it is perfectly legal for the seller’s agent to represent both the buyer and seller (called Dual Agency). Many agents do this very successfully and without issue, but I think it’s obvious what the issue is here. Are they able to remain neutral in negotiations when they were first hired to represent the seller? Once again, this conflict of interest is perfectly legal.
Ok, so what does procuring cause matter? Well, if the selling agent shows you the home without you being represented he/she can be the procuring cause and receive both sides of the commission. Maybe you want to be represented by someone else instead of the seller’s agent. I don’t know about you, but I don’t like to work for free. You may now be stuck with an agent that you don’t know, but also don’t trust.
One More thing on Procuring Cause
You may later decide that you liked a house shown to you by a Realtor a few weeks ago, but since then you met a Realtor that you really get along with and like more. The Realtor that originally showed it to you would be the “procuring cause” and you wouldn’t have much of a choice of who to work with (yes it can be done, but most agents steer clear of this situation). You are rolling the dice on who will be representing you on every home that you see.
Buy a House with Us
If you are in the market to buy a house we can help. Contact us to see if we are a fit for you.
You can learn more about procuring cause here.