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Q&A: Should I work with an agent?

Q: I'm thinking about buying a foreclosure in my old neighborhood. There is a very active real estate agent in that neighborhood whom I used when I sold my house. The foreclosure I'm interested in is very close to her private residence. I don't know how the commissions work on foreclosures. I want to pay the least amount for the property; therefore, I'm not sure if there is any benefit to using this real estate agent as a buyer's agent rather than going through the listing agent directly. I would "like" to be neighborly, and she does a good job, but my main reason for buying a foreclosure would be to get a fabulous deal. What do you suggest? Would her representation really be worth it?

A: I don't think how much you pay for the property is usually tied directly to whether you use a buyer's agent or the listing agent.

The company that owns the foreclosure has already determined how much of a commission it will pay to the listing agent, who will then split it with the buyer's agent. This is very typical of the listing agreement sellers and listing agents sign.

If there is no buyer's agent, you can bet the listing agent will keep all of the cash unless the agreement provides for a reduced commission amount if the buyer is not attached to a real estate agent. They're not going to reduce the purchase price of the property unless there are specific circumstances that might permit it. Those circumstances are usually rare and you might never know or be able to find out if you can benefit from an arrangement the listing broker has with the company selling the home.

The lender that owns the foreclosure will decide which offer to take, in the case of multiple offers.

If you have your own agent, he or she can assist you in figuring out what homes are worth in the area, and how much of a discount you should get when you buy this property. The listing agent might not provide you with that advice, since the agent represents the lender.

Bottom line: I think you're better off when you're working with a buyer's agent who specializes in foreclosures than if you go it alone. The fact that you're an all-cash buyer is great, but I want you to work with someone who can tell you if the property is worth the $350,000 in cash you're willing to pay, or if you can get away with paying only $295,000.

Ilyce R. Glink's latest book is "Buy, Close, Move In!" Distributed by Tribune Media Services

Need some advice? E-mail your question to realestate@newsday.com

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