The real estate industry has done a good job of trying to convince us that we need their services to buy or sell a house. The truth is, most of us do not need their services, any of them. We have bought and sold several houses ourselves. It is incredibly easy. If you're nervous, and who wouldn't be with so much money at stake?, buy a book on the process, read it and follow the instructions. The title company does nearly all of the necessary paperwork. We have worked with real estate agents and brokers all over the country. We are really sorry to say that we've yet to find even 1, yes one!, that can do a better job than you can of selling or helping you to buy a home. Who knows your needs or your home better than you for buying or selling? Computers today are going to change their industry completely and the statistics prove it. Check out these types of sites to see how easy it is: www.fsbo.com or www.BillingsByOwner.com for two good sample sites.

I'd say that you don't need a "real estate" agent so much as a specific "buyers agent". I'm happy to do the legwork, I LOVE the "window shopping" but I feel like I need a buyers agent to represent me throughout the deal, to ensure that we negotiate down to the best price and to make sure that things like the home inspection, land deed, home loan details, etc. are all correctly handled.

If I were a licensed, practicing realtor, or -HAD- been one in the past I'd feel much more comfortable doing it myself, but I'm not so there you have it...

We just bought our first house and used an agent. For the first house purchase, I don't see why not.

He knew the pitfalls that we had never encountered or thought about. He got us into places that were freshly listed before they even made it onto the public MLS site. Good thing too, because in my town, some of the houses we liked were sold before they made it to the public site. Yep, the housing market has been clipping along tickety-boo around here, in spite of what's been going on down in the US.

It was our fault we missed them, we hesitated. Our agent did his job and got us in to see them.

For our second purchase, we might not use an agent. Or maybe we will, it's not like we have to pay him. Well, not directly. We got a free potted plant and a home depot card out of him too, that's alright.

There a quite a few things that I think an agent is useful for, assuming you use them for everything it is probably worth it. If you end up being really particular about investigating everything yourself its not. I personally didn't know which inspectors were thorough or reputable, didn't know what types of fees or costs were standard practice in the area, Didn't know about how certain laws worked in the state. Now I could have done a decent amount of digging, but some things I simply wouldn't have known to ask. For a buyer I didn't pay anything (except indirectly) for the agent.
Also I assume that if you were moving from one region to another having an agent in your new region would be invaluable. The laws are different, the taxes, the standard practices, the neighborhoods/schools, arranging the inspectors, appraisers and everything, its a lot to manage and its hard to be physically there.

The argument that the costs of a real estate agent are exorbitant for what you get, or that they are "unneeded" seems to hinge for me on what your time is worth, either to you or on the market.

If I am going to spend 50 hours doing the legwork myself, and I would otherwise have spent that time working, then the agent might be a great deal. If my free time is very limited, and a house search will suck all of it up for a year, then the cost of the agent may be a good value for me.

Regardless, the agent you interacted with sounded like a real jerk, so I can understand while you think he isn't worth it!

If you are a trusting sort, or can't be bothered to find things out for yourself, a real estate agent is indispensable. That being said, you've got to remember what their incentive is. They get paid a percentage of the purchase prices. They maximize their earnings by selling you the most expensive house at the highest price they can get you to swallow, in the least amount of time. When doing the right thing does not line up squarely with doing the most lucrative thing it is trusting, but not particularly wise, to assume they will "do the right thing".

If you feel up to it, do your own research. Do your own negotiation. The only thing we found an agent irreplaceable for is opening doors for viewing.

I totally agree with you that any marginally intelligent adult does not need a realtor. And I guess if you aren't marginally intelligent you probably shouldnt be buying property.

I have never spent a dime on one, though I will use one's services when the other side is paying (allowing the agent to have both commissions, trying to increase my odds of getting a lower price).

In general though I have not come across one of the good ones I hear about (except commercial). Residential, wow, some of them are an ethics lawsuit waiting to happen. There really isnt any need for them, as your lawyer can handle the negotiations, at an hourly rate, not a % of sales price.

unfortunately, as with most things, the National Assoc. of Realtors lobby in Washington is HUGE! So they will fight to the death to make sure that people cannot list houses on the MLS (or equivalent) without them getting their cut.

full disclosure, we are 28 and have purchased 6 houses, and looked at/met reators at tons more.

As the internet progresses it will become more and more obvious that middlemen like real-estate agents are not needed. The internet lets people connect directly and search much more quickly and cheaply than hiring a person to do the same role. Why hire someone for a huge amount of money when I can search through all the places I want to live instantly, then go visit only the places I want to go? Real Estate agents are a dying breed and I hope the internet will make them completely obsolete in the next few years.

While it's true that real-estate agents have a lot of knowledge about buying and selling homes, again, the internet wins. Sharing knowledge is what the internet is all about and as websites and web communities that deal specifically with real-estate develop it will be possible to get the same knowledge and advice that a real estate agent would offer through the web.

Every situation is different...there is no one answer on this issue. The best 5% I ever spent was for my RE Agent. She handled everything, found the buyer and got me out before the market tanked.

We tried to buy a house in 2004. One of the crazy bubble years we were approved for much more house than we could afford. Picked up an agent that sounds a lot like yours. He showed us a lot of houses that were simply unsuitable. Either too high cost or really awful for the cost. He made us feel like he was doing us a huge favor by taking our low price range and constantly tried to upsell us. He sounded a lot like yours. We didn't hate him (there were no insults) but we were distinctly unimpressed by the whole affair. If it hadn't been for the fact that some listing agents refused to show unless we were represented or consented to letting them represent us for all sales we'd have skipped one for sure. In the end we were so unimpressed by what he had to show us that we simply opted out of the market.

Knowing what I know now- he could have earned a commission by being blunt and telling us that we were barking up the wrong tree- the kind of neighborhoods we wanted weren't in our range. The neighborhoods close to those neighborhoods that *were* in our price range were there for a reason. With our budget and demands our only option was to go to the suburbs. Instead he showed us a lot of terrible houses and a lot of out of our price range houses.

We had a house picked out when we got a realtor this spring. We failed at contacting the listing agent and picked up a family members realtor to help us broker the transaction. Told her it'd be a quick sale and the easiest commission she'd ever earned. 4 months, 3 contracts (one broken the week before closing by the seller), about 50 shown houses, and 4 lunches with our realtor (who actually listened to what we wanted and who was not shy about telling us where she thought we could find it even if it cut her commission) later- we bought a sweetheart of a deal. She knew the forclosure was coming on market- knew that it'd be a good fit before the for sale sign went up- and arranged for a showing within 12 hours of the sign going up in the front lawn. She knew the representing agent and called in a few favors to get our contract in the banks hands less than 24 hours after the property went on market. Which is the only reason that we managed to get a house 20k under neighborhood market with 15k in upgrades- whistle clean and exactly what we wanted. A higher bid went in a few hours after ours- but we already had verbal confirmation. She negotiated with the bank to get us a long laundry list of cosmetic repairs, arranged for us to have access through the entire deal so that we could get contractors in (the kitchen isn't as updated as we wanted) for measurements and such before closing, and kept track of the seemingly hundreds of documents we needed as first time home buyers.

The house was 35k less than the one we'd originally called her in to negotiate for us and she not only accepted a lower commission without a single comment- she paid our home warranty out of her commission when there was a mess up in the paperwork.

There are agents who aren't worth the time of day. And then there are agents who are worth every cent of their commission.

with the advent of the Internet some professions will be phased out. first the real estate agent and who knows maybe the stock brokers as everyone will have all they need at their fingertips. it may be time to think ahead of time before things catch up and you bear the full force of a developing society

After having a couple of bad real estate agents over the years, sometimes they can actually be worse than if you did it yourself. We have gotten some very bad information from people who had their own interests before ours.

The people that mentioned that agents protect their own turf is right. We looked at a house (open house) early in the process before we had signed an agent. The person who was the sellers agent would not even return our calls when we tried to start the process of making an offer. That house sat on the market for almost another year. We really liked the house but were so frustrated with the agent that we just moved on and kept looking.

Having bought and sold a number of times I could probably do the whole thing without an agent the last time.

If agents want to keep some sort of relevance and job security they need to find a way to be useful and clean up all the bad agents and behaviors that are a detriment to clients. They have started to be more like used car salesmen.

The agent also serves as a "screener" for the seller... I agree that the buyers' research can all be done without an agent... but if I am a seller, I want to know the people coming through my house are somewhat qualified/serious buyers - as opposed to having unknown people coming through craigslist-style.

A good agent is worth his/her fee. When my last sale ran into issues with quality of offers, with preexisting conditions at the property, our realtor was a fabulous adviser. She helped us evaluate the different offers we received, helped us locate several contractors to fix our foundation, and actually helped us work with the contractor we selected. She also helped advise us on how to negotiate how the work would factor into the P & S agreement.

We're very surprised that there have been so many favorable comments about realtors. We suspect that at least some of the messages are "plants" to counter their bad press. Are you folks aware that many states have non-disclosure laws regarding information available to the public on the prices houses have sold for? We found out by trying to do research by doing our own CMA (comparative market analysis). We asked the county records department how realtors could do a cma if the house sales prices were private. We were told that they could only do them with info from their own office or if they happened to know some other agent who would share the price with them. We find it most interesting that no agent will ever tell you this. That's why so many cmas have comparables that make no sense. The agent can't get a real comparable.

WC - If you do you work, you can hunt on your own during open houses. I've bought two properties WITHOUT an agent, so I can have more wiggle room in negotiations by 3% (what the selling agent pays the buying agent).

Selling, on the other hand is important you have someone represent you. Connections and marketing is key!

Keigu,

Financial Samurai
"Slicing Through Money's Mysteries"

I applaud everyone willing to do the kind of legwork necessary to purchase (or sell!) without an agent. I am aware of some companies that will even draw up a formal contract for an FSBO deal for less than 1% commission for the peace of mind of all involved.

That said I'll make the following analogy:
I'm a chemist. I can admit most bench chemistry could be tought to anyone with good motor skills and a basic understanding of math. So why would a company hire chemists with college or graduate degrees to do simple work?
Answer: They are/(can be) worth the investment. They know rules, through past experience they make things more efficient. They catch a lot of seemingly minor details that can be all the difference. They know procedure and operate in a quality manner. A realtor worth his salt has all the same qualities: experienced for negotiations, likely not to propose offensive/unethical/illegal tactics, knows the little things a virgin buyer doesn't. Hopefully they know your target area better than you, and can give you some historical perspective. Most importantly, you can assume they'll do all this more efficiently than the untrained buyer.

Just my two cents on real estate agents. My wife and I did switch from the first RE agent we used when we didn't really like her vibe, but our 2nd was a great guy. Lots of information is available for first-timers and DIYers, but I'm not unhappy that I used one.

While I agree Redfin is an awesome site that is extremely helpful in viewing properties I just want to point out that it is not nationwide. It currently only has listing for about 10 metro areas so it's only useful if you are searching for homes around Seattle, Los Angeles, DC, Sacramento, etc.

Adam Welling from the Boston office was a fantastic agent. I got a hefty rebate on the overall commission, lowering the buyer's agent commission to an effective 1.25%, which was *very* well-earned. He helped me figure out a negotiating strategy that allowed me to end up saving 3.1% off the list price, and 9.2% off the original listing price, even in a situation with multiple bids. Adam handled chasing down all of my loose ends very effectively, including making sure every 'i' was dotted and 't' crossed for the contingencies. Besides all of that, he was very accommodating for the fact that I was relocating into Boston - we worked very similarly, with plenty of e-mail and phone contact, and as soon as I arrived in Boston for closing he helped me get settled in by picking me up at the airport, helping me move my bags into the new house, etc. He knew all of the local real estate customs (MA is very different from other states, especially CA where I come from). And rather than being paid directly on commission, Redfin pays bonuses to agents based on satisfaction so he had no incentive to steer me to higher or lower cost houses.

The sellers' agent well deserved his commission - after three months of showing the house to anyone while the sellers were at work, over at their new house, etc. and marketing the desirable aspects of the property, being there for every inspection and tour...

In short, I think that good real estate agents are well worth their money. I wouldn't use a full-service agent ever since I'm comfortable figuring out what I want to tour, but having an ally for negotiating up to closing is fantastic. We closed a few days ago, I'm in my new house, and couldn't be more delighted. Nickel and diming that last 2%-5% just doesn't make sense when real estate is so complicated - I'm hopefully only doing this process maybe every 10-20 years or so (or never!) from now on, but Adam closes pretty much a deal every 2 days and has plenty of experience and practice to save me from potentially very expensive pitfalls. I educated myself as well during the process, but I still wouldn't feel comfortable doing it on my own.

The reason you would use an agent to help you buy a home is quite simple. Obviously from the experience you received you were not using a true professional. This is the reason why Organized Real Estate has been around forever and still is the best way to buy and sell homes, The Power of MLS. A for sale by owner can only attract 10% of the buyers searching for a home. 90 % of homes are sold by using a Realtor and MLS. As for using an agent to help you buy a home it's a total no brainer. If you get a good agent here's how it works. You explain to the agent what you want and need. He/She listens and takes notes. The agent get's off his or her ass and hunts you down a house. They send you listings that they feel are what you want and arrange to see these homes driving you around in their car using their fuel. Once they find you the home of your dreams they research it's value for you, recommend excellent financing options, lawyers to facilitate the sale, arrange other ancillary services such as movers, cleaners and other trades, HOME INSPECTORS ( some Realtors often pay their fee for you ). NEGOTIATE on your behalf, execute a legal contract and assume liabilities, walk you through the closing process, visit you after the sale and buy you a nice closing gift and here is the kicker............ They do all of this for you completely FREE!!!!!!! of charge . That is why you should use a Realtor to purchase a home. Now go find a good Realtor and fire that amateur you have.

Lisa said, "A good agent who has lots of experience with contract and repair negotiation can be invaluable. And, the seller pays for the buyer agent commission, so why wouldn't buyers utilize a good agent to protect their interests in the transaction?"

My real estate lawyer and my home appraiser (both good friends who protect my interests) filled both the need for contract and repair negotiation.