Do I need a Realtor to buy a house?
You’re not legally required to work with a Realtor when you buy a house. But it usually makes sense to do so — especially if you’re a first-time buyer in the current market.
Your Realtor will help you craft the right offer to win in a competitive bidding war. And keep in mind that as a buyer, you won’t pay your Realtor out of pocket; the seller typically pays all agents involved in the sale.
If you’re still on the fence, learn more about what a real estate agent does and how yours can help you succeed in this historic housing market.
Benefits of having a Realtor or real estate agent in today’s market
Anyone who’s shopping for a home knows it’s a historically tough market.
Until recently, home buyers have enjoyed near-record-low interest rates. But today, they face a housing environment with rapidly increasing rates and scarce supply. Suppressed inventory levels in most parts of the country caused home prices to increase by nearly 20% between April 2021 and April 2022.
If you want to win a home in these conditions — and be sure you’re making a sound investment — a great Realtor can be your biggest asset.
Having a knowledgeable agent on your side, knowing exactly what to offer in a bidding war, and how to structure the offer, could be the difference in whether or not you win the home of your dreams.
How your agent works for you
Regardless of the market, buying a home is complicated. It involves expert negotiations and familiarity with contracts and extensive paperwork.
A good Realtor will have a thorough understanding of the market. This includes providing a comprehensive report known as a comparative market analysis (CMA) to help you understand market trends and determine what price to offer. CMAs will also provide you with the important “need to know” facts such as how long the home has been on the market and whether the price has gone up or down.
This information can be incredibly valuable when it comes to evaluating whether a home is a safe investment and worth the price you’ll pay for it in today’s market.
In addition, there are often small problems with initial negotiations and paperwork that, if unnoticed, can put your entire transaction in jeopardy. Your Realtor or real estate agent will work with you closely to ensure nothing falls through the cracks.
“I have seen many people try to go in without a Realtor and then later hire one as the negotiation process is so tedious and difficult to understand on their own,” says Jon Meyer, licensed loan officer and The Mortgage Reports loan expert.
Finally, your agent will help structure your offer so it’s attractive to sellers and competitive against other buyers. This is an indispensable skill — especially if you’re a first-time buyer who can’t pay in cash or make a huge down payment.
How Realtors can help first-time home buyers
Prior to even entering today’s volatile housing market, first-time home buyers tend to have more challenges.
Often, first-timers are younger, which can potentially mean lack of credit history and/or lower credit scores. In addition, younger buyers’ employment history is often shorter; their income may be lower than older, more established home buyers; and they’ve had less time to save for a down payment.
All of this leaves first-time buyers less competitive in bidding wars, less likely to secure a loan, and sometimes less appealing to sellers.
Fortunately, having the right real estate agent in your corner can make up for a lot of these challenges.
- Realtors bring in specific expertise. Not only do most first-timers not have this same level of expertise, they typically don’t know just how important it is to have in today’s market
- A good local Realtor is going to help you prepare an impressive offer, making any of those other first-time buyer shortcomings far less significant to sellers
- Good agents are going to know the areas in which you’re searching. Usually, they know your search area far better than you — it’s their job to know this
Let’s say you’ve been eyeing a particular neighborhood but it’s just outside your price range. Your Realtor is an expert at knowing the ins and outs of every local neighborhood. They are pros at being able to direct you toward a home in your price range that you may have overlooked, maybe even in that sought-after neighborhood you thought you couldn’t afford.
All these skills are indispensable not only to finding a home you love but to winning a bidding war, too.
Contact Valleywide Realty
For more home buying tips, or to speak with us about buying a home in the Central Valley, contact us today by calling (209) 831-9747 or click here.