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Do You Really Need a Realtor? Print E-mail
(3 votes, average 4.67 out of 5)
House - Buying Real Estate
Written by The Frugal Nomad   
Thursday, 22 October 2009 15:29
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Do You Really Need a Realtor?
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As the prices of homes skyrocketed during the recent housing boom, many people questioned whether the value they got from a RealtorTM was really worth it. In high cost places like New York and California, real estate commissions were topping $50,000 for a few weeks worth of work. And with the sites like Ziprealty, Redfin, and Zillow, buyers increasingly were as aware of market conditions, inventory, and sales records as the brokers were. And it was the brokers who stuck with the chorus line of "Now its the time to buy" even as the market was peaking leaving millions of people underwater. Like mortgage brokers, there is a growing question whether real estate brokers are heading the way of travel agents.

 

The best way to determine if you need a realtor is to become a realtor – or at least take a real estate pre-licensing course that shouldn’t cost you more than a grand. Before I closed my very first transaction, I signed up for the Century 21 real estate course. Back then, in the pre-computer age, the course was a series of thirty hours of free lectures delivered by a seasoned broker. I went back for a refresher course a couple of years ago and it had been extended to sixty hours and most of it was made up of computer tutorials. The only time I had a live instructor was for the financing course. And it wasn’t free – I had to fork over a thousand bucks, definitely not cheap. Of course if you are really a fast learner, you can comb the web and probably find this for much less money.

If you’re only taking a course to get in shape for buying your first house, I strongly suggest that you not bother to take the licensing test. Once you’re a licensed agent – you have to notify your adversary of your qualifications and there are certain legal considerations that you just don’t want to hassle with. The point of taking the course is to get you to a level where you know at least as much as the average Real Estate agent, which isn’t that much. There are a couple “Bibles” out there if you are buying your first home. When I lived in California, I bought How to Buy a House in California which is put out by NOLO Press, its a real gem and the $20 or so is a pittance compared to the information you will gain. But if you know exactly which house you want and you are deadset on it, you can go with a service like Redfin and they will rebate you a portion of the buyer's commission. Unfortunately, they portion they share with you is a lot less 50% vs 70% before and if you are going after a short sale, no dice with Redfin.

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amp  - Are they hungry enough? |2009-10-20 13:36:11
I would have to use an agent - too much competition these days - but the question is ... is my agent hungry enough to do some work for me and sell my house or ... ... maybe they are trying to shed some excess weight (including my business)?
Omiewon  - As Much as It Pains Me, You Sometimes Need One |2009-09-18 12:08:40
We tried buying without a Realtor in California and it was a painful process. Not that you won't know every house on the market and know what you should pay for it. Not that at all, the killer is what happens when you go to buy it and there are other buyers. Without a "real" agent, you get treated like a second class citizen. Maybe in an extremely slow market this wouldn't matter, but the best places still have transactions moving.

On the sell side on land, I have had more like with people just finding my property than getting much movement with a broker. And on land, you can pay 7 - 10%. Ouch!
 
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