After we ring in the New Year, Girl Ninja and I plan to get serious about hunting for a house. I’ve been doing some research and exactly what that process entails and it doesn’t seem too complicated. We’ll get pre-qualified, possibly pre-approved, and then start looking for a real estate agent. No big deal right?
Pre-qualification is a breeze. Just type in some stuff in Google and you’ll get an idea of how much money you should be able to borrow for a mortgage. Even pre-approval is a piece of cake. Walk down to your local bank, pay em like $50, give ’em some financial documents, they run your credit, and *BAM* you get pre-approved for a mortgage (assuming you have your shizz together financially speaking). Easy, peasey.
It’s the Real Estate Agent part of the equation that freaks me out.
Girl Ninja and I know about two or three people on a personal level (mostly through church) that are Agents. Now they aren’t our best friends in the world, but we’ve known them for 10ish years, and to the best of our knowledge they are pretty good at what they do. But the question remains….
Should we hire one of them?
Here are the different scenarios that could play out and my thoughts on each:
Redfin has a really attractive business model for potential buyers (and sellers). If we use Redfin to purchase our home, we get a portion of the closing costs paid back to us (usually around 1% of purchase price). That means if we bought a $350,000 pad we would get a check for $3,500+ just for using a Redfin agent. It would definitely require more effort on our part, and it’s not as personal as working one-on-one with an agent, but $3,500 is nothing to scoff at. Not to mention, if we negotiated seller-paid closing costs in to the deal that would take Redfin’s reimbursement even farther. Hmmm… very appealing indeed.
Hiring a stranger. We could also go the route most people probably do. Interview a handful of agents that are familiar with our top desired locations and pick the one who has the most impressive resume. This would ensure we have someone working for us that has a proven track record of success and is intimately familiar with our desired location. What’s more, since we don’t know the guy/girl on a personal level, there would be know awkward tension if we were unhappy with the services provided. A stranger has to work hard for us if he wants to stay our agent. That in and of itself is priceless.
Lastly, we could go the friend route. Hire someone we know on a personal level. Maybe they’d cut us a break on their commission (since we may not have hired them otherwise), maybe not. We know the character of these people and would totally trust them to guide us in the right direction. I don’t think they’d ever try to have us a buy a house, they wouldn’t actually buy themselves. Peace of mind is crucial when it comes to making the single most expensive purchase of our life, a friend might be able to provide just that.
All three scenarios have some serious pros and some serious cons. I honestly don’t know what to do. I’m cheap as hell so part of me wants to go Redfin. But as a first time buyer I like the idea of having a relationship with one agent throughout the whole process. It doesn’t matter how much money I save on commissions if the house I buy is a crappy house, right?
What say you people? Who would you recommend working with (Redfin, stranger, or friends)? What are the pros and cons of each as you see them? Help a Ninja out!!!!