Written by Tammie White, Principal Broker/Owner of Franklin Homes Realty LLC

Buying a Franklin TN Home Without a Buyer's AgentYou've finally decided to buy a house. With the advent of internet real estate portals like ZTR, you don't think you need a buyer's agent. After all, the information you're looking for can be found on one, if not all, of these websites. Why bother with a real estate agent? Doesn't it make sense to not use an agent and keep that money for yourself?

How Real Estate Commissions are Divided

When a seller decides to list his home, he contacts a real estate agent. For a fee, referred to as a commission, that real estate agent will market the seller's home. That commission, usually between 5 to 10% of the sales price, is agreed upon in the Exclusive Right to Sell Listing Agreement when the seller hires the listing brokerage. You see, the listing agreement is between the listing brokerage and the seller, not the agent and the seller. That's the first common mistake buyers make.

This listing agreement is a legally binding contract. All the terms of that agreement have been spelled out in that executed contract. The contract/listing agreement states that the listing brokerage will split the agreed upon commission with the selling brokerage (the brokerage that actually brings in a buyer). However, the agreement states that should an unrepresented buyer (that's you thinking you can manage without an agent) contacts the listing agent directly, the listing brokerage keeps the entire commission.

Rather than the buyer's agent (you didn't think you needed) getting a commission, the listing agent gets the selling brokerage's part of the commission. It's already spelled out in a legally binding contract. The seller already agreed to a specified commission rate. He legally pays that to the listing brokerage whether you have an agent or not. Buyers often think that fee can be re-negotiated. My question to you would be, why would any listing brokerage re-negotiate so they get a lower rate? They don't. They've already covered that at the time of listing.

How does that save you money as a buyer? It doesn't. As a matter of fact, it may cost you money. Remember, the listing agent works for the sellers. Anything you tell him can be shared with the seller. That doesn't sound like a good idea, does it?

Listing Agents are Skilled Negotiators

Home buyers share information that should be confidential and not shared with the seller's listing agent. That information costs them during the negotiation process. The other thing that buyers don't recognize is that they are going up against a skilled negotiator. I know what you're thinking. You've bought houses before, you know the process. Besides, you're a college graduate. Surely you don't need a real estate agent to advise you on how to buy a home.

Here's the deal, it may be true that you've bought two or three homes already in your lifetime but how many contracts have been negotiated by the listing agent? He may have negotiated 60 or 70 contracts just last year. And maybe hundreds of contracts in his years in the business. Your two or three home purchases aren't looking so good now, are they?

Now that you can see there's no monetary advantage to not having an agent, what other reasons do you have not to use an agent?

Online Home Values Aren't Accurate

Buying a Franklin TN Home Without a Buyer's AgentI commonly hear buyers say, there's nothing to be learned by using a buyer's agent. They can look up Zestimates and other information about recently sold homes. That may be true but the information contained there isn't always accurate. Let me give you an example why.

Zestimates are generally pulled from geographic information. It looks at homes sold within a radius, usually determined by miles. That's not how our local MLS determines values. Real estate agents are using sale comparisons within the actual neighborhood of the home, not a geographic radius.

For instance, let's take the neighborhoods of Carlisle and Founders Pointe. These neighborhoods are both on the west side of Franklin. They are adjacent to one another and zoned for the same schools. However, Carlisle homes are selling on average for $531,710 while Founders Pointe homes are selling on average for $355,125 during that same period.

A Zestimate of an address in Founders Pointe put the value as $415,512, much higher than the actual values of the homes within the neighborhood. In all likelihood it's pulling homes from the adjacent neighborhood of Carlisle to get that value. That's not how to determine a houses value. You must stay within the existing neighborhood to determine accurate value. You won't find national portals doing that.

What Have You Learned?

1. The commission is negotiated at the time of listing, not agreed upon between the sellers and the listing agent at the time an offer is received.

2. Listing agents are skilled negotiators. They may have negotiated hundreds of contracts in comparison to your two or three.

3. The house values you're using to help you gauge an offer price aren't accurate. Accurate information must be gleaned from the multiple listing service which you don't have access to.

The above information may not be new to you but I'm going to add one more thing that you probably haven't considered.

Franklin Housing Inventory is Extremely Low

Franklin has been in a seller's market for much of the last three years. The housing inventory is extremely low. Many homes come on the market and are sold in the first day. If you don't have an agent working to find the right home for you, you may miss out of a wonderful opportunity. A buyer's agent will keep a lookout for that perfect home. You don't have the time to do that on your own.

Besides, you'll find that it's not always easy to determine which brokerage actually holds the listing. The only way to find that information is to drive by the house. Who has the time to drive by every house that comes on the market and then contact the listing agent?

The truth is having a buyer's agent could save you money and time. And since their fee is paid by the listing brokerage, there's really no reason not to use one.

When you're ready to buy a Franklin TN home, contact Franklin Homes Realty. We know the market well and closely monitor homes coming onto the market, so you don't have to.

  

Tammie White, Franklin TN REALTOR®About Tammie White, Franklin TN REALTOR®

Tammie White is a REALTOR® and Principal Broker/Owner of Franklin Homes Realty LLC in Franklin TN. Tammie works with relocation buyers looking to purchase a home in Franklin and the surrounding Williamson County area. She understands the way buyers search for homes making her an invaluable asset to Franklin home sellers. Tammie's website, www.FranklinHomesRealty.com, has become the premiere search tool for buyers relocating to Franklin TN. She has been writing a real estate blog since 2009 and quoted in various publications including the LA Times, Skype.com, The Tennessean and Williamson Source.