Does a buyer “need” a Realtor when buying a home? Sounds like a simple enough question; however, it’s not just a yes or no type of thing. Really, to make this as cut and dry as possible, it’s the equivalent of asking, “When riding a motorcycle, do I need to wear a helmet?
In Pennsylvania, there’s no law that requires you to wear a helmet; however, if you want to be properly protected, you’ll choose to. After all, it may not be your ability to negotiate turns and navigate the bike – it could be the one on the other side of this collision that you need to be protecting yourself from.
People often walk into open houses unaccompanied by a Realtor. This gets into a sort of sticky situation in what the selling agent will refer to as “procuring cause.” After all – in Pennsylvania, contrary to popular belief, the seller doesn’t pay a commission for the Buyer Agent to represent the Buyer – they pay for the act of bringing the buyer to the transaction – or what is called “Procuring Cause.” Just because you walked in unaccompanied doesn’t mean you’re on your own. Make sure you’re clear with the agent at the open house that you’re (1) working with an agent currently, or (2) you will be using an agent for the transaction. Most importantly, when you attend an open house, DO NOT SIGN ANYTHING. I would even encourage you to decline signing the “Consumer Notice.”
The first step in buying a home is often looking for one; however, I would argue that your best bet, to make sure you’re properly protected, is to look first for an agent. Understand that you don’t pay the commission – the Seller pays the commission. So, you’re actually hiring someone to work with you, advise you, and really, work FOR you… and all of this is free – to you. Now as a disclaimer, you may be charged a conveyancing fee by the brokerage you select – so take that into account. However, you don’t pay anything until settlement – and the amount it would cost you for an agent to look out for your best interest is typically $300 – $500.
One should also understand that nothing you say is confidential until you have a signed Buyer Agency agreement with the agent. I am uber-competitive, and I look at every buying opportunity for my clients as a win-loss proposition. It’s a good feeling to have an agent on your side that you can tell “I’ll pay up to $150k for this home,” and know that he/she will do everything they can to make sure you’ll pay less.
When considering a move, I would encourage you to do the following:
- Interview Realtors as soon as you think you may be interested in moving. It’s never to early to have a strategy and timeline.
- Identify the Realtor you’d like to work with, and sign a contract you’re comfortable with (typically 3-6 months). Make sure you’re given the option of terminating the agreement with no penalty should the pairing not be a good fit.
- Put your Realtor to work. Ask your Realtor to identify homes based on your interests and have them accompany you to showings.
- Always carry your Realtor’s card in the event you go past an open house you’d like to peak in.
- Don’t sign anything without reviewing with your Realtor.
So, in summary, to have a Realtor as a buyer is akin to having a wireless force-field around your head when motorcycling. You’ll get to feel the wind in your hair, while still having the protection you need.