My opinion on real estate agents is that, as a whole, they are about 25% as useful as they were before the internet came along. That is not to say the best agents are not 100% or even more valuable than they once were, but the simple truth is that people need less from their agents nowadays because buying or selling a home can involve a degree of self-service that wasn’t practical or possible in the past.
The last time I sold a home, my agent listed it on the MLS, did a couple of open houses and then let it sit. I ended up then hiring my friend to take over and he more or less did the same thing but took less commission. The condo eventually sold after 8 or 9 months but it was only because a buyer found it themselves, online, and decided to purchase it.
Similarly, the last time I bought a condo, I found the place off-market, via a friend, and negotiated the purchase myself — directly with the seller — and all my agent-friend did was charge us about $1500 to write up the contract. I ended up getting the condo for about $400,000 (substantially under market) and the seller got the equivalent of selling it for $425,000 if we had agents involved.
Since I like searching and negotiating for properties myself, I really only need a buyer’s agent for three things:
- Finding off-market properties because of their connections in the neighborhood.
- Driving me to properties that I find myself and letting me in.
- Writing up a purchase and sale agreement (99% of which is just a form letter).
Are any of those worth a full 3% commission? To me, #1 is, #2 may or may not be depending on if you end up seeing one place or 30 places, and #3 certainly isn’t.
That said, I am not up for signing an official buyer’s representation contract with an agent at this time. If an agent lets me into one property that I found by myself and I end up buying it, that agent should refund me all but a grand or two of the commission. If, however, he/she brings me an off-market property or ends up spending a lot of time on my account, go ahead and take the full commission. Unfortunately, typical real estate contracts do not accommodate this sort of arrangement so I’m staying contract-free for now. A real estate agent friend of mine has agreed to show me around any places I find as well as keep a lookout for off-market properties without officially engaging as my agent, so this is how we’re moving forward for now.
With regard to searching for properties yourself, it all comes down to one acronym: RSS.
Setting up a saved search on your local real estate site (I use Windermere) and consuming the results via RSS ensures that you find properties the minute they hit the Multiple Listing Service. RSS is so quick that often you’ll see a listing before photos of the property are even uploaded.
If you’re not up for RSS, at least choose to get your saved search results via e-mail. There’s no excuse for missing a single property when you use saved searches.