Do-It-Yourself Home Buying? Three Ways it Can Cost You
Buying a home is one of the largest, most significant investments you will make in your lifetime. The decisions you make during the buying process are critical and will affect you long after the sale. There’s a lot at stake, but by relying on the experience of a real estate agent, you can eliminate much of the uncertainty and stress when buying a home. So, why do some buyers try to go it alone and buy without using an agent?
Unfortunately, some buyers mistakenly believe that they’ll be better off without a real estate agent when buying a home. Following are three common misconceptions that some buyers have about using an agent, and why giving into those misconceptions could potentially put their real estate investments at risk.
Misconception #1 “It will be easier and more convenient to have the agent who has the FOR SALE sign in the yard help me, rather than getting my own agent.”
The person who has the property listed (and who has placed the FOR SALE sign in the yard) is called a Listing Agent. The Listing Agent works for the seller and, by law, must act in the seller's best interest. Not yours. It’s the Listing Agent’s job to sell the home for as much money as possible and with terms that benefit the seller. Therefore, as a buyer, it typically isn’t advantageous to rely on the advice or counsel of the Listing Agent. Be leery of a Listing Agent who volunteers to represent both you and the seller. This is called Dual Agency - a complicated scenario requiring the Listing Agent’s loyalties to lie with both you and the seller simultaneously. Dual Agency is illegal in some states. An agent who represents buyers is called a Buyer’s Agent. It is the job of the Buyer’s Agent to help the buyer obtain his or her ideal home for the lowest price and best terms possible. A Buyer’s Agent works exclusively for you - the buyer - and has a legal fiduciary obligation to represent...