Buying a house is an exciting time for most people. The idea of a new space, a better space, or better neighborhood, or even a new city is something to look forward to. Looking online at the various options is where most people start, and then later maybe they'll pop into a few open houses. The last thing on their mind is hiring someone to help them (in most cases). I thought it would be helpful to outline what Buyer Agency is and why it is valuable to have an agent with you as you go through this process. First, the NC Real Estate Commission wants you to read this brochure. But in a nutshell, having an agent means that you have someone on your side, an advocate, throughout the process. And to be clear, that agent is YOUR agent. Not the listing agent acting as a dual agent.
Market Knowledge
This point deserves an entire post of its own, but to condense things here, the main reason you want an agent on your side is for their knowledge of the market. This isn't just for learning the various neighborhoods. For those who already know where they want to live, the agent's knowledge of the market can help you write a competitive offer, possibly get into a house early (this is getting harder and harder), and can help you understand any possible obstacles to expect throughout the process. Buying an historic house downtown is totally different than a house in Cary or North Raleigh in terms of things to be aware of during the process. Working with someone who knows what is "normal" and what isn't for that neighborhood can be a big advantage.
Navigate the Process
The structure of the NC Offer to Purchase and Contract allows for a due diligence period whereby everything must be completed by a deadline. Your agent will act as a Project Manager and advise you on what needs to be done within that period, but also will coordinate with your lender and other 3rd parties to keep things on track. No two transactions are the same, and many times an unexpected item will no doubt show itself. An experienced agent will help you through these steps by helping you understand your options.
General Advice
Buying a house is an intimate undertaking. It's the biggest purchase in most people's lives and things can easily get emotional. An agent can be valuable boots on the ground while you're out of town and something pops up, or they can be someone to talk to when you can't decide which color to paint the living room. Agents do so much more than what is listed here, but hopefully at this point you understand that they are a guide in a very large transaction.
Then there's the question of compensation. In NC, it is generally accepted that the seller pays the listing agent, and the listing agent splits that fee with the buyer agent. That amount is pre-determined at the time of the listing before the home is put onto the market.
Compensation is worthy of a separate blog post as well, but if you are pondering the value of agent compared to the money, please do remember that risk plays a huge part. For example, the scope of a transaction is known going into a home purchase. The process is the same. But will the agent be writing 1 offer or 3? Will one deal fall through before the right house is found? Will the inspection be incredibly difficult or will it go smoothly? Will there be something unusual that prolongs the closing? Because people are involved, every transaction is unique. Even though an agent can predict many things about property, they cannot predict how a seller will respond to them and how the buyer and seller will come to terms. For that, and many other reasons, the risk is there, and the agent doesn't get paid until you buy a house. Or in some cases, not at all. An analogy I like to use is that of a graphic designer. When working with a new client on a website, for example, scope is defined including revisions and such, and the client accepts. But if the client simply wanted to have you "at will" for a week to work on the website, I imagine the fee would be much higher because you know the time, but you have no idea what is actually going to happen that week. This analogy only works in part b/c in real estate the time isn't even known, but hopefully you get the point.
There's so much more to this, but I hope that this post gives you many points to ponder as you engage in the home buying process. Please don't hesitate to contact me if you want to discuss any of this further.
Compensation is worthy of a separate blog post as well, but if you are pondering the value of agent compared to the money, please do remember that risk plays a huge part. For example, the scope of a transaction is known going into a home purchase. The process is the same. But will the agent be writing 1 offer or 3? Will one deal fall through before the right house is found? Will the inspection be incredibly difficult or will it go smoothly? Will there be something unusual that prolongs the closing? Because people are involved, every transaction is unique. Even though an agent can predict many things about property, they cannot predict how a seller will respond to them and how the buyer and seller will come to terms. For that, and many other reasons, the risk is there, and the agent doesn't get paid until you buy a house. Or in some cases, not at all. An analogy I like to use is that of a graphic designer. When working with a new client on a website, for example, scope is defined including revisions and such, and the client accepts. But if the client simply wanted to have you "at will" for a week to work on the website, I imagine the fee would be much higher because you know the time, but you have no idea what is actually going to happen that week. This analogy only works in part b/c in real estate the time isn't even known, but hopefully you get the point.
There's so much more to this, but I hope that this post gives you many points to ponder as you engage in the home buying process. Please don't hesitate to contact me if you want to discuss any of this further.
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