This is a sponsored column written by Kevin J. Wood, a licensed Realtor© in the District of Columbia and surrounding area. For more information on buying or selling a property, feel free to contact Kevin at 202-297-9753 or email him.
I work with a lot of first time buyers, and many call me because a friend referred them. They know they’re supposed to use an agent, but often they don’t know why they need an agent. Or they have preconceptions about what their agent should or shouldn’t do for them. They usually have watched a lot of HGTV and are surprised they can see more than three places, and that the offer paperwork is not done on the hood of the car. So why use a real estate professional when searching for a property? And what exactly does the agent do for you?
First, buyers don’t pay their buyer’s agent anything. The way it works is that the seller pays the listing brokerage a commission, and the listing agent agrees to share part of that commission with the buyer’s brokerage. A good real estate agent does more than take buyers around to see properties and write up the offer paperwork. A buyer’s agent should be familiar with neighborhoods and what they offer, the various neighborhood amenities, what new developments are planned nearby, a bit of the history of the area, what materials are used in the house, etc.
An agent, while not a home inspector, will often point out obvious defects of a property that a buyer might not notice when touring a property. While buyers are focused on the kitchen and how nice, or not, it is, the agent is usually looking around for things like water stains on the ceiling, for signs of previous flooding in the basement or pointing out asbestos flooring tiles, for example. A full-time agent sees hundreds, if not thousands, of properties each year and is good at comparing properties’ pros and cons.
Once buyers have identified a property to put a bid on, their agent helps with determining the offer price, which contingencies to include or not include in the offer (financing, home inspection and appraisal contingencies, for example) and other ways to make a strong offer.
As soon as the offer is accepted (and in D.C. it sometimes takes multiple offers to secure a property to buy due to the competitiveness of the market), the agent ensures that a copy of the ratified contract and earnest money deposit gets to the title company.
The agent also works with the buyer to ensure the home inspection is scheduled, and attends the home inspection with the buyer. Usually the home inspection results in another round of negotiations regarding repairs and/or a credit for repairs, and the agent guides the buyer through the best strategy to get the desired results.
After the home inspection, the agent’s role is to stay on top of the various parties involved in the transaction to ensure that each party is doing what’s needed to get to closing. The agent remains in regular contact with the title company, the buyer’s lender and seller’s agent to make sure any hiccups in the process are smoothed out before they become disasters.
Occasionally, when listing a property, I come across a buyer who wants to make an offer on the listing but doesn’t have an agent. The buyer thinks that by not using an agent, they will get a discount amounting to half of the commission. What actually happens, however, is that the agent usually reduces the commission charged to the seller, or keeps the full commission.