I met with the Ruthless Realtor today. Discovered that a Buyer's Broker is actually paid by the seller1 and would thus be available at no cost to me. Learned the specific parts of the contract, and an overview of various types of mortgages and incidental costs2.
After looking at a map, Ruthless Realtor didn't think that the neighborhood I was considering was really bad at all. This property might be very worthwhile.
"Oh, joy!" thought I. Because you know, I adorethis house.
He wants to be my broker, of course. I didn't sign anything (of course).
I spoke with my Dad. He strongly advised against getting a buyer's broker. He doesn't see how this person could possibly work in my best interest.
I hate that he said that. I mean, everybody up here uses buyers' brokers. And here's a guy-- a friend, even-- who knows all in the ins and outs of local realty, and who would be contracted to act in my best interest, negotiate on my behalf and hold my hand throughout the entire process. This could be so easy! And now my Dad says that he can't possibly, and I should go through this on my own.
I hate even more that he is most likely correct in his assessment.
Now that I think about it further, Ruthless would be engaged in the act of showing/selling me houses. Were I to do this on my own, acting as my own agent, the seller's agent would try to sell me the house. But now, my own broker would be trying to sell me the house.
Since he is getting paid by the seller a percentage of the selling price equal to that of the seller's agent, what's the incentive to lower the price? The better the job he does negotiating on my behalf, the less he will be paid.
Additionally, he is an agent for a firm. This firm sells most of the houses in the area, including the one that currently holds my interest. He would essentially be in competition with his co-workers, people he will have to negotiate with and interact with again and again. Is there not an ethical conflict of interests here? Who wins, besides the firm?
This guy is a great realtor. Really excellent. I'd have his word that he'd be acting on my behalf. And I'm sure he would. But all in all, this seems like it could be a greater racket than law3.
There would be some sort of conflict of interests here. Am I incorrect in thinking this?
I have reason to believe that I am as smart or smarter than RR, and I know that I am adept at learning new things. I built my own computer, and while that is probably less involved a process than negotiating realty contracts, I was as ignorant of, and felt as incapable of, that process when I started on that road as I am about this process now.
So I will not sign the papers, will look at this house with him tomorrow, take a great many photos, and spend a good portion of this weekend learning real estate and contract law.
Why, when things seem so easy, does something have to come along and shatter my illusions?
I suppose I should be thankful. Reality's tougher, but ultimately more rewarding than illusion.
1 Oh, but who pays the seller, hmm?
2 The latter from a Mortgage Dude named Gene.
3 No offense to my lawyer friends. Lawyers have done, and continue to do, great things. However, I've seen a few instances in which the main beneficiaries of legal action were the law firms themselves.
4 And now, back to the reality of "where the hell's my checkbook?!" I'm so tired... but I must look more... for tomorrow I must cancel the checks and pay the required fee (for my own peace of mind) if I cannot locate them tonight :/