Do I need a realtor?

Realtors
Unless you're planning to buy a brand new or custom-built home, chances are you will need a real estate agent or broker. Since the seller, usually pays the agent 5 percent to 7 percent of the purchase price, it makes sense to avail yourself of an agent's services. Agents are experts on real estate and can be enormously helpful to the buyer. A good broker has a wealth of knowledge about homes for sale and neighborhoods you might like.

Sometimes brokers will offer to help you find a mortgage lender and may even recommend a particular lender. Bear in mind that you are not obligated to follow such a recommendation. Rather, you should do your own comparison of mortgage providers and make sure you get the best service and prices.

Seller's Agent or Buyer's Agent?
While you're looking for a broker, keep in mind that there are two types: seller's agents and buyer's agents. In some states, agents are allowed to represent both a seller and a buyer of the same property, creating a possible conflict of interest. Unless an agent specifies otherwise, he or she was hired by the seller to find someone to buy the home. It is the job of the seller's agent to get the seller the highest price on the best terms.

When the agent represents the seller, it is their fiduciary duty not to give you, the buyer, certain information. Unless the seller specifies otherwise, the seller's agent will not tell you why the house is being sold. The seller's agent can't tell you of concessions the seller may be willing to make-including price reductions. Furthermore, they won't give the buyer information about the prices of comparable houses that could disadvantage the seller.

However, if you want someone to look out for your interests, consider using a buyer's agent. These agents work only for buyers. A buyer's agent can tell you how much similar homes in the area have sold for. If they have access to the information, a buyer's agent can reveal to you the reasons for selling the home and any potential concessions. Plus, a buyer's agent will tell you about property value trends in the neighborhood you desire.

The buyer pays the buyer's agent in one of three ways:

A flat fee,
An hourly rate
A percentage of the sales price.

However, you may save money in the long run, since buyer's agents work to get you the best possible deal.

The Right Agent for You
Whether you decide to work with a seller's or buyer's agent, you should choose your agent carefully. Your realtor should have at least two years of experience. There is high job turnover in the industry, and you'll want to work with someone who has had time to learn the ins and outs.

You should avoid part-time or recreational realtors. Only someone who works full-time as a real estate agent will have time to understand the changes and nuances of the business.

It's also important for your agent to have a familiarity with the areas and price range you're interested in . Ask friends, family and coworkers for recommendations. Check your local newspaper and yellow pages for listings. Before you hire anyone, interview at least three agents in person. This will help you find one who understands your needs and is willing to work with you until you're satisfied.

As you speak to prospective agents, keep in mind that they should be thorough, attentive, communicative and flexible. Ask if the agent is licensed (you can verify this with the state agency that regulates real estate) and if she belongs to the National Association of Realtors. For help finding a buyer's agent, contact the National Association of Exclusive Buyer Agents.

Go Hunting
Here's the fun part: with the help of your realtor, start house hunting. As you begin looking at homes, experts recommend compiling two wish lists: one of needs and the other of wants. This will help you compare homes. Consider the age of the homes you visit, along with any structural and cosmetic changes that have been made-or need to be made.

Real Estate FAQ's