Using A Realtor®

If you were involved in a legal dispute, would you share lawyers with the other party suing you? Probably not. Why do some people put themselves in that same situation when buying a home? Real estate involves the negotiation of large sums of money and it always amazes me that a handful of people still don't seek their own representation in the sale. In my opinion, investing in real estate without a realtor is akin to sharing lawyers when someone is suing you or representing yourself in court. You can always do it, but it's never recommended.

Why not go it alone? First of all, real estate involves large sums of money as we've said. When dealing with large sums, an oversight can be costly for you. In addition, you need expertise in real estate law and contracts. And you need to have the latest data on market conditions and fluctuations, without which you'll never know if the investment is fairly priced or over-priced. When you pay too much for a property, you end up paying for the mistake three times over. First, you pay the owners too much money so you now have less for renovations or for furniture you were planning to purchase. Secondly, if you carry a mortgage, you pay a significantly higher amount of interest because you have less money for a deposit. Over the term of your mortgage, a few thousand dollars less means you actually pay tens of thousands in interest. And thirdly, when you sell your home a savvy buyer will only be willing to pay market value, which will be less than you paid years earlier so you'll lose money on the resale side. Costly mistake.

Real estate remains one of the few investments not heavily taxed in Canada. Unlike retirement plans which are taxable when cashed out or other capital investments subject to capital gains tax, the increase in the value of your home over many years is tax free. That makes a home purchase the single most important investment of your lifetime. When there's this much riding on your home investment, it just doesn't make sense to leap into a purchase without professional care.

Who pays for service fees? The fees for service paid to realtors in British Columbia are generated by the real estate transaction. In B.C., as in California, that means you can have a realtor work exclusively for a home investor, exclusively for a home seller or for both in a limited fashion.