Real estate agents enjoy high commissions on their sale – a cost that the seller is likely to shell out. On top of that, real estate lawyers often charge exorbitant fees for their services. You are probably wondering if it is possible to choose between a real estate agent or a real estate lawyer to assist you in buying a home without spending too much. If you want the best decision, read on.
What Does the Law Say?
Different laws cover real estate in each province. In most cases, the assistance of a real estate agent is not considered a legal requirement. However, a real estate agent is experienced enough to understand the law and other particulars, such as what needs to be included in a purchase contract. Some states, on the other hand, require that legal documents are only prepared by a real estate attorney. Only an attorney is allowed to do a title search, close the transaction, and perform similar services.
Why Hire a Real Estate Agent?
The house buying process tends to be complex. Having a real estate agent to help you in doing certain tasks makes the job easier. Managing documents alone require patience, familiarity with real estate laws, and completion of important steps during the transaction and approval process. Juggling other tasks as well can be fairly intimidating – finding and hiring inspectors, making negotiations to pay for repairs, and maintaining good relations with sellers, to name just a few.
Experienced agents generally do not have trouble managing different tasks simultaneously. Real estate agents also have a good network that consists of mortgage loan brokers, inspectors, and other professionals in the industry. Real estate agents also know the acceptable practices of a given geographical area.
Why Hiring a Seller’s Agent is Not Recommended
Any seller who wants to utilize the services of an agent but do not want that agent to dominate the process usually hires a real estate agent. In a lot of cases, a seller’s agent may be more aggressive in insisting that the seller allow him/her to represent both the seller and the real estate agent. This is called a ‘dual agency’ relationship. This relationship is often beneficial to the seller. However, there are unscrupulous agent’s sellers who may not have the seller’s best interests at heart. To be on the safe side, many sellers prefer not to work under a dual agency agreement.
Controlling the Process
The seller is the best person to decide about the type, size, location, and price of the home he/she wants to buy. A real estate agent can only look for a home on your behalf, but other things need to be done, such as browsing through the listings and going to open houses. Your agent may not completely understand what you need and want, and may not even bring you to FSBO or for sale by owner listings. If you’re going to perform your search for your dream home, click on ‘Beginning Your Home Search.’
Getting a real estate attorney or agent is all well and good, but it is important to know everything about the process of buying a home. You need to educate yourself regarding the market value of comparable homes in your area. Having enough knowledge about the most vital things will help you avoid high-pressure selling from aggressive agents who may insist that you bid for a house of their choice. This will also allow you to avoid unnecessary stress and misunderstanding that could cost you if you do not understand real estate.
Why Hire a Real Estate Attorney?
The average real estate transactions do not require the assistance of a real estate attorney in some states. However, transactions in real estate tend to be standardized, which means that the contents of a purchase contract in one state may be very similar to those in another state, with minor differences.
There is a catch, however. Real estate agents may not fully know how to handle everything, particularly when there are legal issues involved. To avoid this, it is prudent to seek the help of a real estate attorney. Good agents are knowledgeable about the processes of contracting and negotiating, but they may not be able to make the proper judgments in case there are legal questions.
You may, for example, have plans about what to do with a property but the existing tenant is living illegally on an in-law unit. If you want this tenant evicted so you can rent out the place, you will require the help of a lawyer. You may also have special arrangements you want to have in place and may require a special lease. These, along with other concerns, will need the expertise of a legal professional to ensure that the transaction abides by existing laws from start to finish.
If you want to know how to find and choose a real estate attorney, click on ‘How to Find an Excellent Lawyer.’
How Are Real Estate Agents Paid?
Real estate agents generally do not rely on a salary. They are paid on a commission. They get paid only after the whole process is completed. In some cases, they may not even receive anything should a buyer lose interest or fail to close the transaction. Typically, a seller pays a commission of around 5% of the sale price to the agent and/or seller’s agent. The commission rate could change, however. The seller, for example, might ask for a lower rate if the property carries a high price tag. In a probate sale, the commission is set by the court. In some cases, buyers’ agents may even offer the buyer a slice of the commission they receive at closing.
Commission arrangements also have variations. For example, there may be some buyers who would rather pay the commission to the agent they hire. They figure that doing so will encourage the agent to look out for the buyers’ best interests. In a few cases, however, the agent may prefer to perform small tasks and charge an hourly fee instead of a full commission. This will open an opportunity for you to request a reduction in the sales price. You could also turn to rebate and discount brokers who provide similar services (albeit limited and often online-based) at a 1% commission or slightly higher.