Comments on: 5 Big Questions For New Home Buyers #3: How Do I Find A Good Agent?

By: Katie B.

Katie B. — Wed, 17 Jan 2007 23:21:59 +0000

Something I would recommend, even to first time buyers who are willing to do their research is using a service like Redfin in which you do the legwork, find the house, and then have Redfin take over for the offer, negotiations, etc. You receive two/thirds of the buyer’s agent commission back. I truly believe the realtor commission model needs to change per the Freakanomics argument. The market is starting to demand it’s change.

By: Trent

Trent — Wed, 17 Jan 2007 22:02:46 +0000

You’re right, Rich; I write this blog not just to enlighten and entertain others – I’m researching and learning this stuff as I go along, too. It helps me keep my eye on the ball.

By: Trent

Trent — Wed, 17 Jan 2007 22:01:43 +0000

Pete’s right, the cost of the agent does still exist. By saying that the seller pays for the agent’s fee, what I mean is that the buyer’s agent gets a cut out of the overall commission on the sale of the house. As a buyer, your agent DOES get money for placing you in a home and indirectly you are paying for it when you buy the house, as the agent’s commission is considered when the house’s asking price is set.

My point is that as a buyer, this cost is largely out of your hands, so in terms of having to worry about the commission when you’re trying to find any hidden costs that might sneak up on you, it’s not a major concern.

By: Rich

Rich — Wed, 17 Jan 2007 21:53:12 +0000

Pete,

That’s one of the great things about Trent…he doesn’t pretend to be a financial expert. He’s stated very clearly several times that he’s not.

I’m not disagreeing with you, I’m genuinely interested in how the costs are hidden. Can you elaborate or give an example.

Thanks Pete…

Rich

By: Pete D

Pete D — Wed, 17 Jan 2007 21:20:02 +0000

A buyer’s agent can be very useful if you’re a first-time buyer — a lot of hand-holding, taking you through the process, making sure you don’t muck up something big.

Otherwise a buyer’s agent is a waste of money, given the amount of info available to anyone these days.

As a financial expert, you ought to know that it’s misleading to think that “the seller will pay for the agent’s fee, so the cost for you for any agent will almost always be zero; cost isn’t really a consideration for you.”

The cost is hidden, but it’s still there.