Real Estate Myth: I already found the exact house of my dreams, I don't need a REALTOR

I already found the exact house of my dreams, I don't need a REALTOR.

FALSE- Touring people around to find the perfect house is only 10% of the real estate agent's job. There's still 90% of the job to do. That's where you truly need a good REALTOR (a.k.a. Project Manager). After the house is found, you still need to write the offer. How are you going to write the offer? Stop and think about that for a second. Most consumers don't know. Do you know the critical aspects that need to be in the contract to protect your best interests as a buyer? Will your contract protect you legally in case of default on the other party? What else should you submit along with your offer to strengthen your position? After all this, you are going to need to negotiate the contract. Do you have real time access to comparables to do this adequately? How are you going to know if you are not vastly overpaying for the home? Will it appraise? What are the ramifications if it does not appraise?

After you have successfully negotiated the contract, do you know what comes next? Is your loan in order? Do you have a loan officer you know and trust will take good care of you? How about inspections? Did your contract stipulate what it needs to in the event that the house is a money pit? Do you know what inspections are relevant based on what year the home was built? What about negotiating repairs? Do you know what's negotiable and what's not? Did you remember to get the appraisal ordered? Do you know about the importance of getting a survey done on the home? What attorney should you use? What are the attorney's responsibilities? What about title work, and getting clear marketable title? What kind of deed will transfer with the property? Will you get a General Warranty Deed? Do you know what that is?

See, finding the house is the easy part. Holding the deal together through all of the land mines and pitfalls of the on-going transaction is the hard part. Your REALTOR should be well versed in all of the above aspects of the transaction. Furthermore, your REALTOR should know and trust a solid team of individuals to ensure the transaction goes smoothly. Members of this team include a lender, appraiser, various inspectors, attorney, surveyor, title company, and a myriad of others that all help to make the transaction get to closing without falling apart. According to the National Association of REALTORS, in a typical real estate transaction over 35 individuals touch close to 100 documents to make the deal happen. If one detail is overlooked, it could have serious financial implications.It is so wonderful that the internet empowers the consumer by providing tools to assist in finding that perfect home. Just remember, there is still plenty of opportunity for the REALTOR to earn their keep!

Steve Schwartz is a licensed REALTOR in NC and SC specializing in Fort Mill, Tega Cay, Lake Wylie, and Charlotte and the host of http://www.ThePurpleDog.com. Real Estate Law varies from state to state. The comments made herein pertain to a typical real estate transaction in NC and SC and may not be relevant in your state. Make sure to enlist the help of a licensed REALTOR in your state.

Real Estate Myth: Real Estate Agents are all Filthy Wealthy

FALSE: Some are. And they earned it by being the best of the best in an occupation where more than 95% drop out within 5 years (most in the first year). As for the vast majority, they are at best making a living, or are just flat out struggling.

Most people don't realize what comes out of the commission at the end of a transaction. Many people have their hands in the pie of the total real estate commission. For example, a $200,000 house at 6% commission results in a $12,000 commission. At first, this seems extraordinary to pay the listing agent. But typically, the first thing the listing agent does is give 1/2 to the buyer's agent. Then each agent shares a large percent (could be up to 50%) with their company. Now they are down to $3000 and they still have to pay taxes on that money and pay for marketing. At a tax rate of 35%, they are down to $1950 then they have to market your house. Furthermore, most agents are independent contractors so they don’t have the benefit of corporate paid health insurance. They have to get it on their own. Still think they are all rich?

Buyer agents burn hundreds of dollars in gas driving people around so they have expenses too. Most people forget that being a real estate agent is a sales position, so it's a numbers game. Quite often, buyer's agents drive people around that do not end up buying anything. They don't get paid for their efforts unless the deal closes.

So, the reward is big if you're good enough at it and you have the staying power. Many sources say that it takes 5 years to establish a successful real estate career. Most people are not willing to commit that kind of time, effort, and cash outlay to an occupation that most fail in. So, should the best of the best make good money? I think most people would say yes.

Steve Schwartz is a licensed REALTOR in NC and SC specializing in Fort Mill, Tega Cay, Lake Wylie, and Charlotte. Real Estate Law varies from state to state. The comments made herein pertain to a typical real estate transaction in NC and SC and may not be relevant in your state. Make sure to enlist the help of a licensed REALTOR in your state.