Filed Under (Real Estate) on 09-18-2012
Most Colorado home buyers hire a real estate broker to help them find and buy their home. Buyers rarely have to pay the broker’s commission, and they can take advantage of the broker’s expertise, experience, and legwork.
Still, with so much home information available on the Internet, a buyer may be tempted to go shopping without a broker. After all, if you work directly with a seller, you may be able to negotiate a deal that doesn’t involve paying real estate brokers their hefty fees.
Here’s a look at the pros and cons of hiring a real estate broker.
1) Providing information and education
More and more, information that used to be available only to real estate brokers is now available to the general public. Buyers can search county websites to learn about recently sold homes, and you can search the Multiple Listing Service (MLS) for information on for-sale homes.
However, a competent real estate broker should provide additional value. Good brokers can provide information about areas and neighborhoods, property values, financing, contracts, negotiations, real estate law and all other aspects of the transaction. They also have access to more complete MLS listing information than does the general public.
2) Scheduling showings
When it comes to viewing properties, real estate brokers have an advantage. There is a system in place that allows a licensed broker to schedule a property showing without the seller or seller’s agent being present. Without a broker, you would need to schedule visits around open houses and/or work directly with the Seller’s broker to see a home. Because Seller’s brokers are busy too, it might be difficult to see many properties in one day. If you have lots of time, this may not be a drawback.
3) Preparing legal documents
Real estate brokers have a limited license to practice law, which means they can prepare contracts for clients using the standard real estate forms created by the Colorado Real Estate Commission. They can also walk you through all the contract provisions.
Without the assistance of a broker, you may want to work with an attorney, on an hourly fee basis, for just this part of the transaction.
4) Negotiating on your behalf
Negotiations can be important at every step of the transaction, from the purchase price to concessions at closing to the actual date and time of possession. It is always valuable to have someone other than yourself negotiate on your behalf, because a third party can negotiate without emotion interfering
On the other hand, because brokers have a financial interest in the completion of the deal, a broker may encourage you to settle sooner than you might if you were representing yourself.
5) Advising on financing
An experienced real estate broker should be able to connect you to a good mortgage broker or lender. Some real estate brokers offer one-stop shopping by having a mortgage broker affiliated with their firm. If this is the case, you must be informed of the financial arrangement through a formal disclosure. Don’t be afraid to choose a different mortgage broker if you find you can get better financing elsewhere.