Will go the extra Mile
My name is Mariano J Contreras
and after living here in FLorida, I decided to give back to the community and I decided to spend time helping individuals, couples and families in finding the perfect place to live, a place they can call Home.
Mi nombre es Mariano J Contreras
y despues de vivir aca en la soleada Florida, decidi ayudar a individuos, parejas y familias a encontrar el lugar perfecto para vivir, un lugar al que puedan llamar su Hogar.
The difference between agents, brokers, and realtors
The nuances between these terms isn't terribly important, and if you like you can skip this section. Whoever represents you or the seller, you can refer to them as "agents" and be safe. If you'd like to know the details, keep reading.
All real estate salespeople are agents. They're licensed to represent either buyers or sellers in property transactions. There are basically three flavors of agents:
Regular agents: They have no additional training or professional memberships.
Brokers: They generally have more education and training than regular agents. But they're still a kind of agent.
Realtors: These are agents who belong to a special professional association of agents.
A common mistake is to refer to all agents as Realtors, but actually it's the other way around: all Realtors are agents, but not all agents are Realtors.
Note that a broker can be an individual or a company. Often, an agent works for a broker.
When shopping for an agent, it's not important to look for one kind of agent over another. In theory brokers and realtors might have more skill than regular agents, but it really depends on the particular agent in question. If I were shopping for an agent, I wouldn't pay any attention to what flavor of agent they were. I would pay more attention to positive reviews on Yelp and other places.
How much do real estate agents charge?
Your agent's fee is paid by the seller. So it seems like your agent is "free" to you. In reality, if you don't use an agent, then there's no agent for the seller to pay, so you might be able to negotiate a reduction in the sales price by the amount that the buyer's agent would normally get. (More on that below.)
The seller's contract with her own agent specifies how much she'll pay that agent, usually 6% of the purchase price. The seller's agent then typically shares half of that with the buyer's agent. So, each agent usually receives 3%. (The agent might then have to pay 0.5% to 1% to their broker, if they're working under one.)
But the 6% fee paid to the seller's agent isn't set in stone. Some sellers get a discount agent who receives only a flat fee. Other sellers sell without using an agent at all. That's called FSBO—For Sale By Owner. Such sellers might or might not offer a commission to buyer's agents to bring qualified buyers to the table. And if such sellers don't offer a fee to buyer's agents, then buyer's agents aren't going to tell their clients about those houses.
Save 3% by being your own agent
You might expect that sellers' agents would automatically reduce their fee from 6% to 3% when there's no buyer's agent. You'd be wrong. Sellers' agents are usually happy to keep the whole 6% for themselves unless somebody starts asking for a reduction. And in fact, even if asked, many sellers agents won't agree to lower their commission when there's no buyer's agent, simply because they're not legally obligated to. So you actually have two hurdles to cross: You have to first get the seller to agree to reduce the sale price by 3% if they can get their agent to reduce their commission from 6% to 3%, and then the seller's agent has to agree to reduce the commission. So getting the 3% reduction isn't a slam dunk.
Still, it doesn't hurt to ask, and it very often works. Just point out to the seller that it won't cost them anything to lower the price if the commission is reduced, since the seller is going to be paying that 3% either way. And point out that the seller's agreement to your request is what gets you to sign a contract and buy the home, which is what the seller wants.
If you go this route, make sure to get this concession before you sign a contract. After you've signed a contract and don't have any outs, it's too late. The seller's agent has no obligation to part with the extra 3%, and if the contract has already been signed, they likely won't.
Benefits of using an agent
In the past, one of the main advantages of using an agent was that an agent could find potential homes for you by searchingMLS, a database of all houses for sale that are listed by other agents. But this is not the big advantage that it used to be, since in most areas you can now search MLS on the Internet yourself.
The next important thing your agent can do for you is to give you a professional opinion about how much a given house is really worth. This can help you avoid paying too much for a house. You might worry that the agent has a conflict of interest, since they typically get paid 3% of the sales price, and so the more you pay for the house, the more the agent makes. In reality this is not so much an issue, because inflating the price a lot would net an agent only a little extra commission. (For example, inflating the sale price by $10,000 would net the agent only $300 extra.)
Next, an agent can help you negotiate the price. In fact, they'll make a recommendation to you as to how much you should offer, and whatever price you agree to, the agent will then handle all the negotiations themselves, so you don't have to get your hands dirty.
Finally, an agent can guide you through the contract, and make sure you're not getting ripped off on closing costs.