Why do people hire a real estate agent when purchasing a home?
In tough times, most people are looking to cut costs any way they can. And in a home purchase, who to spend extra money for hiring a real estate agent when buying?
It's true that anyone can shop for a house. Just check the listings online, come for a viewing and sign the papers. So why would people spend their money for a real estate agent's help?
Here are the main reasons why my clients decided to hire an agent and didn't regret:
Home search first
Good deals do not stay on the market for long. In fact the rule "First come, first serve" works here more than anywhere esle. That's why I search for the homes for my clients first thing in the morning and then in the afternoon.
It does pay off. I often meet my happy clients when they walk their dog living in a nice house close to mine. They wanted a house in a particular area which offered very few listings. Even the reaching out to the potential home sellers didn't help. So when a new offer of a nice house for a very good price popped up at 9 pm, I knew - this is it! And we should be fast. So I agreed with the agent that we would come to the viewing before anyone else. I told to my clients to be ready to make the proposal right on the spot if they like it. Luckily on the viewing we dealt directly with the owner and she agreed to the offer right there. Fast deal for her - great deal for my clients.
Better safe than sorry
My main task when I am involved in the purchase transaction is to make it safe for my client. Sometimes the clients are so excited to buy their dream home that may not pay enough attention to potentially risky situations, like too large un-refundable deposit or request of the seller to send the money directly to his own account instead of an escrow account. In such cases I talk with my client to explain him the possible consequences. If the seller doesn't want to accept the proposed amendments to the terms of the transaction, I may recommend the client not to go ahead with this purchase.
The property may well fall into client's budget but is it the right market price for this particular real estate? I use various tools to valuate the market price of a property. Such an analysis helps either to negotiate a discount or proves that it's a good deal.
It's especially important for the clients who take mortgage - if the bank's valuation of the chosen property ends up to be lower than the listing price, bank would cut the mortgage amount. Normally we know about it after the client has already signed a reservation agreement and paid a reservation fee.
Usually it is a selling party who provides all the contracts. Such contracts can be simple or very detailed, but normally not well balanced towards the buying party. Various possible contingencies can show up in the contracts. My job is to know the buyer's situation and amend the contingencies accordingly as well as insert those protecting my client.
The most common missing parts are the penalties for the seller. Ensuring they are in the contract will help to cover potential expenses the buyer faces if the seller fails to finalise the transaction.
Another common problem are missing documents. For example, I would request a confirmation that the seller was not married at the moment of the property purchase if the property is owned by a single person. What if his wife has rights to the property and would claim them afterwards?
When reviewing documents I do not rely only on my experience, but I work closely with my legal adviser and the mortgage broker if a mortgage is involved. In some cases I may ask another specialist for assistance - it can be a technical specialist or a tax adviser.
Communication and follow up
The most time consuming thing in the transaction is to coordinate all the involved parties: buyer, seller, seller’s agent, mortgage specialist, lawyer, land registry office etc. All parties have their say into run of the transaction which should be reflected in the corresponding documents. It's my job to ensure that every agreement and commitment is met within deadlines by each party. After all, there are high penalties for failure of meeting a deadline, so the communication may become very intense. And all this is in Czech language!
Dealing with charged atmosphere
Buying and selling a home is a very emotional process for most people as there is much on the line. Not having an emotional involvement into the transaction allows me to be a diplomatic barier between parties. Several times I managed to save the transaction by calming down an angry or upset party who has got so emotional that wanted to quit the deal.
The real question is: Why wouldn’t you hire a real estate agent?
There are so many reasons why you still need a real estate agent to buy a home. While new technologies, websites, and apps can assist you with selecting a property, nothing replaces the value an experienced real estate agent brings to securing your most important financial investment.
Still, not all agents are equal — you need to hire an agent that has an experience with buying homes, which is not very common on Czech real estate market.
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