Is It Beneficial To Have A Real Estate Agent When Buying A Foreclosed Upon Home?
Friday, November 20th, 2009 at
6:29 pm
We are just beginning the home buying process. We have no home to sell (first time buyers) and were thinking of getting a real estate agent. However, I know we would have to sign one of those exclusivity contracts and, if we buy a foreclosed upon home, their comission would have to come from somewhere (us?).
If we are even considering buying a foreclosure, should we sign up with a real estate agent?
Tagged with: Agent • Beneficial • Buying • Estate • Foreclosed • Have • Home • Real • Upon • When
Filed under: Q & A
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A real estate agent has access to more listings than your average home buyer. When looking into bank owned foreclosures, this is especially true. I recommend that you contact an agent near you, and tell them your price range, they will email you some properties in your range.
you do not need an exclusivity agreement and seller pays commission.
you cannot look at home by yourself so you have to call an agent. At a minimum you have to call listing agent to let you in.
whomever shows you the home receives the “buy side” commission. if listing agent shows you home then they will get the buy side commission.
The commission could still come from the sellers (in this case the bank). Banks still pay closing costs and realtor fees. The realtor fees are incorporated into the purchase price of the home. So if you are seeing a home for $130K, the real purchase price is actually 122,200, they just added the 6% realtor commissions onto the purchase price.
In North Texas where I practice Real Estate (Dallas/Ft Worth) 100% of all banks list their homes with Real Estate agents. They have no desire to sell direct and will not talk with you if you call them direct to ask about a house.
So you can either deal direct with the sellers’s agent (whose job it is to get as good a deal for the seller as they can) or you can use a buyer’s agent to look out for your best interest.
The commission for your buyer’s agent would be paid out of the commission the bank is paying to their listing agent. You would be very foolish to do this without representation and the representation would not cost you anything.
Buying a foreclosure home is a great idea in times like this, because banks have more homes on their hands than ever before, and they are desperate to get rid of them. This desperation means that these homes are super cheap. However, finding them can be tricky. Many real estate websites will list foreclosures, some don’t. However, I would definitely recommend getting a real estate agent so that you can better negotiate with that bank. In most cases their commission would come from the person/bank actually selling the home (not the buyer).
Good luck with your home purchase!
You are advised to contract with a buyer agent real estate representative in your endeavor to purchase a foreclosed home. Understand that well over 95% of foreclosed homes are listed with real estate agencies for disposition by lenders. The lender involved will pay the commission involved in the sale. Do not use the listing agent for such a purchase, since that agent represents the seller (lender) involved with the property. A buyer agent will represent YOUR interests, and will share the commission offered with the listing agent.
You can find a certified buyer agent at the Real Estate Buyer Agent Council using the supplied URL.
I bought a home in foreclosure 3 months ago and you SHOULD ABSOLUTELY WORK WITH A REAL ESTATE AGENT. As a first time home buyer myself, there are many situations that come up and you need someone who is experienced to be working for you. And that is the key your real estate agent should be working for you!
I worked with 3 different realtors before we found someone that worked for us and we did not sign exclusivity contracts with any of the realtors. The only time you enter an agreement with your realtor is when you go to make an offer on a property.
The commission is paid for by the owner, in the case of a foreclosure, this is the bank.
But like I mentioned it is extremely important to have an agent. When we were buying our house, the bank that owned the property had certain rules that we had to abide by. For example they determined the closing date and for every day we went past that closing date, we would have to pay the bank $100 a day. Our realtor was on top of everyone, especially the mortgage broker, to make sure we closed on this date. Your mortgage is really where you will get held up in the process so having our realtor to deal with everyone and expedite the process is why we are now happy homeowners.
You should DEFINITELY find a realtor to be your buyer’s agent, especially since you are first-time buyers.
The realtor commissions are paid by the seller (whether it’s a bank or not), not by the buyer. You do not have to sign a contract; the seller signs a contract with the listing realtor.