Pros and Cons of having a "buyers" Agent?
So I feel horrible right now because my wife and I just got off the phone with our Agent. We had to tell him that we wanted to terminate our contract with him. We've been looking at homes with him for about three weeks now but we decided to part way because his strategy was not in alignment with ours. We want to find a home where the seller will pay half or all of the closing costs and he keeps telling us that there is no way we are going to win a bidding war if we keep asking for the bank (because the homes we are bidding on are all bank owned REO homes) to pay the closing costs. He has also said to us numerous times that he does not think the banks will think to highly of us using my wife's CalPERS retirement savings account for the purchase of our home. Her CalPERS retirement account allows us to borrow money for our first purcahse and we have decided that we want to us it but he says it will prolong closing and make some banks shy away from us. So as you can see, his logic is totally different than what we want to do. Now my question is this - What advantages do we have in making an offer with the seller's (banks) agent without a middle man like a buyer's agent? Will they be more straight forward and tell us what and how much we have to offer to get the home? I've heard so many times that having a buyers agent will effect the commission that the seller's agent will make and thus make them shy away from a couple using a buyers agent as opposed to a couple making an offer straight to the seller's agent. Can someone shed some light on this? Thank you.
Public Comments
- a) Your agent was right about the closing costs. Banks do not generally negotiate much on REO properties because they are already taking such a huge hit on the deal. b) About CalPERS....once again he was right. When you have to borrow from a retirement account, that shows that you do not have the ability to properly save in order to buy the house. Raiding your retirement is a sign of desperation. If you are ONLY looking at REO properties, a buyers agent will be no help because the banks just don't budge on these...and why should they? They know that they can refuse your demands and conditions because someone else with no conditions will come along!
- I think you should get another buyer's agent, but make sure in your first phone conversation that this agent shares your philosophy and can help you reach your goals. I closed on my first residence last week, and my agent was a huge part of the reason that I got the place I wanted. He was able to connect me with the best possible lenders, he did all the work with the listing agent and the bank and really helped me focus on what I wanted and the best way to get it. Especially if you are a first-time buyer, I think you need an agent. As for the listing agent, if these are all bank-owned homes, the listing agent will entertain all reasonable offers, regardless of whether you have an agent or not. The bank requires them to do that, as far as I know. You must be in California, too, Can I ask if you are in the Bay Area? If so, I have a great company to recommend to you. If you are in the Sacramento area, my son recently bought a house up there and he has an agent that he has a lot of faith in. I would be happy to give you those referrals if you like. As far as borrowing from her retirement account, that type of thing did not seem to be an obstacle when I was buying. Good luck with everything!
- Actually if you do not have a buyers agent the selling agent would probably be asked to take less commission from the bank. We are used to having buyers agents as a selling agent. It is actually easier for the selling agent. When an agent does both sides it is always very delicate situation. We can be sued in a heart beat on dual sided sales. Without a buyer rep you have no one to look out for your best interests and trust me you need someone too. You may think it is easy but it is not. Also if there are multiple offers the bank will take the one that will close faster with no closing costs. The want easy. So it really is the fact that you are going after foreclosures which is making your Realtor tell you these things. He just does not want you to get your hopes up house after house and not get it. You should call your Realtor and apologize and ask him to take you back.
