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You really should look at the mortgage/financing separate from the shopping/closing. If you can afford to pay cash, you don't need financing. If you drive through neighborhoods and find a FSBO you love at a price you like, you don't need a real estate agent. Not that either situation is very common, but they do happen.

I had my financing lined up through a mortgage broker before I started looking with a Realtor. I also narrowed down the areas I liked, and the must-have and deal-breaker home features, so the shopping wasn't a big hassle either. Some of that was having a good Realtor who emailed me new listings (and price reductions) 1-2x/week that were a fit on paper, and I applied my subjective filter, and then we'd look at the ones that passed.

It's true that closing is a hassle, but compared to maintaining a house...

Pre approved!

gigag04 wrote:Pre approved!

WHOOP!

tbrown wrote:If you drive through neighborhoods and find a FSBO you love at a price you like, you don't need a real estate agent.

Why not?

Frankly, you don't "need" a real estate agent for FSBOs, pre-foreclosures, post-foreclosures, REOs, short sales, new homes, or just run-of-the-mill, owner/seller MLS-listed resale homes. But in each case having a real estate agent (especially a Realtor) represent YOUR interests can be a good idea (after all, the other side usually has some professional representing their interests).

In the rare event you find a truly unrepresented FSBO and you don't use a Realtor, who is going to draw up the purchase contract? You can't use the TREC or TAR boilerplate contracts (see below - must be an agent/broker and/or Realtor to use them). Are you going to draft an agreement on a napkin? Or are you going to hire an attorney? And how much is that goin to cost? And will the attorney have a clue about the true market value of a property? And who hires/pays for the attorney? Or does each side hire an attorney and then pay by the hour while they bicker over the wording of the contract?

Don't get me wrong, as my previous posts indicate I have a lot of qualms about my profession and I'm not cheerleader for Realtors. There are a lot of lazy Realtors and a lot of snakes in the grass as with any sales-based profession. But the "need" for the service is obviously there if for no other reason than there are a lot of us out there providing these services to a lot of people. But more importantly, the service and expertise a good Realtor can provide are valuable and can help you get the best deal on a property.

That said, there are A LOT of problems with the industry that are only beginning to be addressed with recent changes in consumer protection, mandatory disclosures etc. And the industry has come a long way from the days of a few brokers cornering an entire market and ruling it like a little feifdom (still happens in small towns from what I understand). And even the basic master-apprentice nature of the broker-agent employment relationship is long overdue for some serious change. Many "brokers" are merely absentee owners of big conglomerations of poorly trained "agents", who aren't much more than indentured servants cast out to reel in as many clients as possible.

TREC contract disclaimer:

The form of this contract has been approved by the Texas Real Estate Commission. TREC forms are intended for use only by trained real
estate licensees. No representation is made as to the legal validity or adequacy of any provision in any specific transactions. It is not
intended for complex transactions.

And TAR contracts are actually copywritten and include this disclaimer (from residential lease contract):

If an active REALTOR® member of the Texas Association of REALTORS® or an active
member of the State Bar of Texas does not negotiate this lease as a party or for one of the parties,
either as a party’s broker or attorney, this lease is voidable at will by Tenant.

Bought my first home back in 1996 in Grapevine (and still living there, love it!). I used a realtor for a few days until it was painfully obvious to me that she was NOT listening to what I wanted...so I went driving around on my own. Found a place that was a little higher than what I wanted to spend but it was For Sale By Owner. I get the info, set up appointment, viewed the house, loved it! Did a little talking/negotiating, they were getting ready to go to a realtor, so I knocked 6% or so off the ask and made that my offer (which ended up being what I wanted to spend), they accepted, got it inspected, etc., and then bought it/closed about a month later. It was easy, OTHER than feeling like I was under-the-microscope/latex-glove-treatment by the mortgage company....and this was back in 1996! I'm sure there are fine realtors out there (such as austinrealtor), but it worked better "going solo" for me.

The TREC contract is PERFECTLY LEGAL for ANYONE to use, and simple.
"Intended for use by" is not a prohibition for anyone else.

Buying your first house it would be wise to involve a Realtor. There's lots to learn.
After that, it's up to you.... We used a Realtor for our first home in TX (not our first ever, but TX is bizarre).
Bought our current home FSBO with no Realtors involved on either side.
Transaction was smooth. Even had to negotiate a new price when the appraisal came back with a much smaller square footage than was advertised (we knew it would and had written that as a condition in our offer).

Each situation is unique.

18% interest. Holy cow. I think I just vomited in my mouth a little bit--Things sure were different in the "old days." I refused pay more than 6 % on a car loan, so I just paid cash. I hate interest.

I've bought several pieces of property with no RE agent involved, and would have bought a house that way. I asked the title company if a RE agent was required,, and they said "We can handle it all, and we have an attorney in-house for the legal stuff".

Nothing against RE agents, and I have friends that do that, but I've never had one do what I could not have done myself, usually better.
As a seller, All I ever got was a listing on the MLS.
As a buyer, I was shown a lot of crappy houses that did not meet my clear criteria.
I'm sure I did not get the right agent. I just expect them to earn their commission.

AR, appreciate your candor on the subject.

RoyGBiv wrote:The TREC contract is PERFECTLY LEGAL for ANYONE to use, and simple.
"Intended for use by" is not a prohibition for anyone else.

Roy, you're correct and I realize my original post on the subject was a bit too broad. The TAR forms are definitely Realtor-only forms, as they are copywritten and specifically provide "null and void" clauses if used by non-Realtors. As you say, the TREC forms can be used by Texans who are not licensed real estate agents, but it is NOT recommended. The most important reason why is the numerous loopholes, deadlines, and other "gotchas" buried within the text of the documents. A Realtor instructor once told me there are no fewer than 17 different loopholes buried in the standard 8-page 1-4 Family Residential purchase contract. But if you don't know what you're looking at, they're easy to miss. Most Realtors don't even realize half of them are there (heck, many Realtors don't even notice the plain and obvious clauses highlighted in bold type with words such as "time is of the essence with this paragraph" ).

But I digress. Certainly is very possible for someone to purchase a home in Texas without a real estate agent or Realtor representing either side. My wife and I bought our first home with representation (and got a crummy deal) and bought our second home without representation (though I was 75% of the way through TREC licensing certification when we signed closing papers - so I knew a bit more than first time around) and we got an OK, but not great, deal on second house. Now with the recession, we're stuck in house #2 for the forseeable future.

It is a confusing and complicated process and I do believe it's helpful to have someone to walk you through it. I've even helped a former RE agent buy a house who was highly impressed with the $500 I saved them on HOA transfer fees by knowing the tricks of the trade and the art of negotiation.

In a nutshell, a GOOD Realtor is worth every penny they earn in most transactions and is MUCH CHEAPER than hiring a lawyer to represent you and only you (not merely relying on the info from a title company lawyer who doesn't actually represent YOUR interests). That said, a subpar Realtor is a drag on the entire transaction and a complete waste of money.

IMHO, one way to fix the problem is to limit the number of agents who can work under a single broker's license and make the BROKER do actual real estate work (instead of just earning commission splits for fronting the cash for E&O insurance and an office and/or web site). To truly earn the commission - which if you'll notice is always payable to the BROKER, not the agent - the client should get the expertise and effort of BOTH the broker and the agent. Then you'd - hopefully - have more competent and thorough representation. As it stands now, I'd guess 99% of residential real estate clients never meet their broker or speak to them and may not even know the person's name (unless it's the same as the company name). They only meet the apprentice ... er, I mean .. agent.

Rex, thanks - appreciate your input as well.

If all you got from RE agents was an MLS listing and shown a few houses that don't work for you, then I wouldn't want another agent either. The agents you've had sound like the first and only agent my wife and I ever used (and the inspiration for me to NOT be a lazy good-for-nuthin' Realtor).

Now for my two cents. Over the years I have purchased six homes. I still own two [acutally I own two mortgages]. I have always begrudged having to pay commission to realtors. Nothing against them personally. To me they are a "necessary evil" [not a personal attack] just like you sometimes have to hire and pay a lawyer.

My advice is to find a competent and ethical realtor to handle your purchase and sale. Realtors are trained and licensed and they do the job every day and know the pitfalls of buying and selling a home or property. They also have good contacts for lenders, inspectors, repair and upgrades. Usually a house is the biggest purchase that most people make and by having a good realtor you can avoid potential problems that could cost you a lot of heartache and money.

WildBill wrote:Now for my two cents. Over the years I have purchased six homes. I still own two [acutally I own two mortgages]. I have always begrudged having to pay commission to realtors. Nothing against them personally. To me they are a "necessary evil" [not a personal attack] just like you sometimes have to hire and pay a lawyer.

My advice is to find a competent and ethical realtor to handle your purchase and sale. Realtors are trained and licensed and they do the job every day and know the pitfalls of buying and selling a home or property. They also have good contacts for lenders, inspectors, repair and upgrades. Usually a house is the biggest purchase that most people make and by having a good realtor you can avoid potential problems that could cost you a lot of heartache and money.

What most of them don't have is contacts for Professional Surveyors. And when they are told that the mortgage company requires a survey. they will tell the buyer that is should only be "a couple of hundred dollars" because the majority have no freaking idea what is involved. The majority of the time as a buyer, NEVER believe the real estate agent, they work for the seller and will only tell you what they are absolutely required by law and not one thing more, unless it helps line their pocket.

OldCurlyWolf wrote:

WildBill wrote:Now for my two cents. Over the years I have purchased six homes. I still own two [acutally I own two mortgages]. I have always begrudged having to pay commission to realtors. Nothing against them personally. To me they are a "necessary evil" [not a personal attack] just like you sometimes have to hire and pay a lawyer.

My advice is to find a competent and ethical realtor to handle your purchase and sale. Realtors are trained and licensed and they do the job every day and know the pitfalls of buying and selling a home or property. They also have good contacts for lenders, inspectors, repair and upgrades. Usually a house is the biggest purchase that most people make and by having a good realtor you can avoid potential problems that could cost you a lot of heartache and money.

What most of them don't have is contacts for Professional Surveyors. And when they are told that the mortgage company requires a survey. they will tell the buyer that is should only be "a couple of hundred dollars" because the majority have no freaking idea what is involved. The majority of the time as a buyer, NEVER believe the real estate agent, they work for the seller and will only tell you what they are absolutely required by law and not one thing more, unless it helps line their pocket.

My home purchases have been in cities, so I have no experience where a surveyor was required. That is why a buyer should have their own realtor, who will represent you.

Under the law even if you are not dealing directly with the listing agent, the agent you are dealing with is legally an advocate for the seller. An ethical one will inform you of that.

BTW, in Texas most mortgage companies and banks, etc. require a survey and the buyer is supposed to be supplied with a valid copy of the survey, I.E., NOT a xerox copy. Those are violations of copyright law. Nor one with a "Seller's Certificate" stating that nothing has changed. That is a violation of the professional surveyors act. Title companies have a habit of breaking laws and realtors and their agents have a habit of abetting them.

We better quit this line of discussion on this board. We are getting into areas that might be considered too far Off-Topic.

OldCurlyWolf wrote:Under the law even if you are not dealing directly with the listing agent, the agent you are dealing with is legally an advocate for the seller. An ethical one will inform you of that.

BTW, in Texas most mortgage companies and banks, etc. require a survey and the buyer is supposed to be supplied with a valid copy of the survey, I.E., NOT a xerox copy. Those are violations of copyright law. Nor one with a "Seller's Certificate" stating that nothing has changed. That is a violation of the professional surveyors act. Title companies have a habit of breaking laws and realtors and their agents have a habit of abetting them.

We better quit this line of discussion on this board. We are getting into areas that might be considered too far Off-Topic.

Eh. It's my post. Go for it.

Also - we put in an offer today