# First time buyer



## oob (Apr 4, 2011)

Do you guys it's necessary to have a buyer's rep/agent on one's first home purchase?
Obviously don't want to get taken advantage of and make sure I have all my bases covered, but is it feasible to be an informed buyer through research alone?

I know the agent gets payed out of the fee pool by the seller. 6%? Am I naive in thinking that it'd be relatively easy to convince the seller's agent to give up 2.5% of their fee if I don't use a buyer's agent?

On a related note, what are everyone's recommended readings?


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## none (Jan 15, 2013)

www.greaterfool.ca


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## Ag Driver (Dec 13, 2012)

To be a little more helpful than just providing a link with zero context.....

If your boss asked you to work for 50% less tomorrow, would you graciously accept because they asked politely? With that being said, I am inclined to think that not many are keen on relinquishing their commission due to one potential buyer coming in without an agent. 

When it comes to buying, I recommend an agent for a couple reason. 

1) It isn't going to cost you any more or less. 

2) You get access to the market BEFORE it hits MLS. This is approximately 48 hours prior to hitting MLS. This is important because these are where the good deals are. Once it hits the market, it is not uncommon for a house to sell ABOVE listing price. I bought my house a day before the general public could even see it was listed.

3) A good agent (IMO) will give you all of the information you ask for. i.e. The entire history of buy and sell prices of the home, the history of buy and sell prices in the vicinity, etc. They have a lot of information at their disposal .... whether or not they are allowed to provide you with such information, I don't care at that point. As a buyer, I want the upper hand and want as much information as possible about the house and the houses surrounding. Ethics at that point can take a seat at the back of the class. My agent was amazing and essentially provided me with every bit of information that was available to them. This kind of transparency means a lot to me and the trust bond becomes stronger.

Having said all of that, when it comes time to selling my house, I will first attempt to sell it privately. Agents are not required. All that is needed to buy and sell a house is a lawyer.


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## oob (Apr 4, 2011)

Ok maybe I'm not understanding it correctly, but the way I figured it worked was the following:

A: Seller and buyer both have agent representation. They split the commission pot.
B: Seller has representation but buyer doesn't, seller gets the entire pot.

If you don't have a buyer's agent and ask for something less than half the fees back, wouldn't they be indifferent or better off than scenario A?

All the other points are obviously very valid.


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## nobleea (Oct 11, 2013)

oob said:


> Ok maybe I'm not understanding it correctly, but the way I figured it worked was the following:
> 
> A: Seller and buyer both have agent representation. They split the commission pot.
> B: Seller has representation but buyer doesn't, seller gets the entire pot.
> ...


In theory yes. What normally happens is that the seller agent will say something like "the commission and compensation is something between me and my client and not your business" and then might give them $1000 rebate or something.

Remember, the buyer is the only one bringing cash to the table so you're paying the commissions, not the seller. The agents get their money before it even gets to the seller.
We didn't use a buyers agent on our first house. I don't really care what commission they worked out, only the bottom line price I paid.


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## OnlyMyOpinion (Sep 1, 2013)

oob said:


> Ok maybe I'm not understanding it correctly, but the way I figured it worked was the following:
> A: Seller and buyer both have agent representation. They split the commission pot.
> B: Seller has representation but buyer doesn't, seller gets the entire pot.
> If you don't have a buyer's agent and ask for something less than half the fees back, wouldn't they be indifferent or better off than scenario A?
> All the other points are obviously very valid.


Not to muddy the waters, but my 2 cents: Seller's agent gets ~2.5%, buyer's agent gets ~2.5%. The 5% is taken off the proceeds (i.e.seller pays the full commission).
If buyer has no agent then the seller only pays the ~2.5%, so they benefit not you. But for the reasons noted above, as a buyer especially, I would consider using an agent.
IMO the link provided is read by fools (as its name implies).


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## Cal (Jun 17, 2009)

I would want representation buying my first property. You can use the agent as both buying and selling agent, and they will reduce the %, but they just want a quick sale. Ultimately it is the seller who pays the commission.

To reply to "If you don't have a buyer's agent and ask for something less than half the fees back, wouldn't they be indifferent or better off than scenario A?"

Probably not in the sense that you would not have access to any market data, price history, contacts for home inspection/specialsts, etc...


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## dougboswell (Oct 25, 2010)

If the contracted commission is 5% on the listing agreement then the seller will pay 5% regardless of whether 1 or 2 agents are involved.

As a first time buyer I would not try it alone. You have no idea of the history of the house and past selling prices. You do not know if it is overpriced to begin with. I would not worry about that fee as you have no control over that. What I would be concerned with is getting the lowest possible price for the house. If you use the selling agent how hard do you think that he/she is going to try to convince the owner to take a lower price. Not much as they are working for the seller - to get the highest price for the seller. You need someone to work on your behalf and get you the lowest possible price. We moved from Toronto to another city. We had our agent who told us to offer $25000 less than the list price. Now this was 10 years ago and the house was listed for under $300000. Our agent spent a couple of hours with the owners and their agent and the owners actually took our offer which was a large savings for us. If we had gone with the listing agent he probably would have said to offer $5000 less. They would have taken that and would have been laughing all the way to the bank. We probably would have thought we had gotten a great deal.


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## carverman (Nov 8, 2010)

dougboswell said:


> As a first time buyer I would not try it alone. You have no idea of the history of the house and past selling prices. You do not know if it is overpriced to begin with. I would not worry about that fee as you have no control over that. What I would be concerned with is getting the lowest possible price for the house. If you use the selling agent how hard do you think that he/she is going to try to convince the owner to take a lower price. Not much as they are working for the seller - to get the highest price for the seller. You need someone to work on your behalf and get you the lowest possible price. We moved from Toronto to another city. We had our agent who told us to offer $25000 less than the list price. Now this was 10 years ago and the house was listed for under $300000. Our agent spent a couple of hours with the owners and their agent and the owners actually took our offer which was a large savings for us.* If we had gone with the listing agent he probably would have said to offer $5000 less.*


What you are saying is basically true, but in the end, it is the seller that offers the real estate for "their acceptable price"
and the interested buyer that buys it for their acceptable price...based on many factors..
such as condition, home inspection report and local area listings and what they sold for.

The agents are just there to deal with the legalities of the offer to purchase which is a binding contract (USUALLY),
unless there are exclusion clauses or conditions that cannot be met. 

However, you as a buyer cannot just go it alone blindly first time without some research on the property you are interested in and that takes some time. Your agent may not be that thorough or just to busy with
other listings and only does the basics of taking your offer and bring it back and trying to convince
you to buy, so they can earn their commission. Time to do your research on the property in question that you may not have, if there are other offers in the works...in some of those cases you only have about 48 hours to make up your mind. 

There is also the "confusion factor' of seeing too many properties for sale with your agent.
After seeing a 'few', you become less aware of key issues with each property and only
trying to decide on location, the inside space, and any other amenities the property has to offer.

As an example: If the property you have just purchased is on a flood plain or the storm sewers are inadequate and prone to overflow in torrential downpours, (the basement is known to flood in the past), or some other municipal issue...
such as backing onto commercial property frontage (a noisy factory/trucks at all hours of the night or next to a major mutilane highway), and any other serious issues that have not been disclosed by the seller,
that may lessen the enjoyment of your property.


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## Bowzer (Feb 25, 2015)

I just bought my first home a year ago, and would never have dreamed of doing it without an agent. As mentioned, your agent is being paid for by the seller, you aren't losing anything. I don't think you'd see a discount on the house, and you never know what a good buyer's agent could bring to the table as far as negotiation goes.

In my specific case, my agent navigated a tricky multiple bid situation which included bringing in a home inspector the very next day before the offer was even made official as the seller was not going to agree to an inspection in the offer and have the deal potentially fall apart later. He had people on call and made things happen. 

I also won the multiple bid. It was my first ever house offer. And considering where I live (Toronto) where people may LOSE 10 times or more in multiple bids, I was spared all that heart ache, and all for "no cost" to me.


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## dougboswell (Oct 25, 2010)

Carverman: In our case the real estate agent for us earned her commission. She along with the listing agent spent 2 hours convincing the sellers why our offer, at $25000 less, was a fair offer for them.

Most buyers of resales today to not look at multitude of properties. They go on the MLS and select homes that they might want to see, according to their criteria - price, size, location etc and then ask their agent to arrange a showing of 3 or 4 properties. 
Latent problems, those that cannot be seen by a person, need to be disclosed by a seller if these problems could influence a buyer to buy or not buy a problem. There have been court cases where a seller did not disclose these material facts. The buyers have taken them to court and won and have been awarded money. It is buyer beware if something is visible ie flat land with a river running by. It is up to the buyer to inquire about possible flooding.
If the buyer asks if the basement has ever flooded the seller is obligated to tell the truth. 

When we sold our house buyers asked how many cars could be legally parked here. My response was to tell them to go to the municipal offices and get an official answer.


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## marina628 (Dec 14, 2010)

I just sold a detached house in Oshawa over asking price and two days before we got multiple offers we got a low ball offer $34,000 under our asking price.Our agent would not even present it to us and told the other agent who was very new to look at the comps and shockingly enough that agent had no idea what houses were comparable ,he was pulling up town house prices or homes 65 years old with no garages .These guys ended up coming up $40,000+ but still lost the house but if they had given us the last offer first they would have gotten the house so my advise to buyer and seller is make sure you get agent with lots of experience.I have a feeling if this guy knew his agent cost him the house by advising him to low ball first he would be very upset.
The only thing about looking on MLS and again I speak from my own experience is many of the houses there are sold conditional already and many homes get sold before the photos even get loaded to MLS as agents share listings in their office and send them to their network of friends first.


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## marina628 (Dec 14, 2010)

dougboswell said:


> Carverman: In our case the real estate agent for us earned her commission. She along with the listing agent spent 2 hours convincing the sellers why our offer, at $25000 less, was a fair offer for them.
> 
> Most buyers of resales today to not look at multitude of properties. They go on the MLS and select homes that they might want to see, according to their criteria - price, size, location etc and then ask their agent to arrange a showing of 3 or 4 properties.
> Latent problems, those that cannot be seen by a person, need to be disclosed by a seller if these problems could influence a buyer to buy or not buy a problem. There have been court cases where a seller did not disclose these material facts. The buyers have taken them to court and won and have been awarded money. It is buyer beware if something is visible ie flat land with a river running by. It is up to the buyer to inquire about possible flooding.
> ...


I guess I am not normal then as I look at anywhere from 20+ homes before I ever bought lol


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## CharlesF.Donahue (Jan 7, 2015)

> Ok maybe I'm not understanding it correctly, but the way I figured it worked was the following:
> 
> A: Seller and buyer both have agent representation. They split the commission pot.
> B: Seller has representation but buyer doesn't, seller gets the entire pot.
> ...


I agree with you. The seller has representation power. He knows very well all such things. The interested buyer that buys properties for their acceptable price.


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## eliana.marya90 (Jun 10, 2015)

*Big challenge of buying a home for the first time...*

This is a big challenge of buying a home for the first time to all of us, whenever you are buying a home for a vary the first time you have to know about so many things like:

- What type of home best suits your needs?
- What specific features will your ideal home have? 
- How much home can you actually afford? 
- Who will help you find a home and guide you through the purchase? 


All these are major facts whenever you are buying a home for the first time, think about these then take any action and Consider your financing options... 

All the best...


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