You Need A Real Estate Agent
In 2017, Tara Struyk wrote in Forbes Magazine that "The proliferation of services that help homebuyers and sellers complete their real estate transactions continues to be popular. It may have you wondering whether using a realtor is becoming a relic of a bygone era.
While doing the work yourself can save you the significant commission rates many real estate agents command, for many, flying solo may not be the way to go--and could end up being more costly than a realtor's commission in the long run. Buying or selling a home is a major financial (and emotional) undertaking".
That, of course, begs the question, What percentage of FSBO will list with an agent?
BETTER ACCESS - MORE CONVENIENCE
A real estate agent's full-time job is to act as a liaison between buyers and sellers. This means that they have easy access to all other properties listed by other agents. Both the buyer's and seller's agents work full time as real estate agents, and they know what needs to be done to get a deal together. For example, if you are looking to buy a home, a real estate agent will track down homes that meet your criteria, get in touch with sellers' agents, and make appointments for you to view the homes. If you are buying on your own, you will have to play this telephone tag yourself. This may be especially difficult if you're shopping for homes that are for sale by owner.
Similarly, if you are looking to sell your home yourself, you will have to solicit calls from interested parties, answer questions and make appointments. Keep in mind that potential buyers are likely to move on if you tend to be busy or don't respond quickly enough. Alternatively, you may find yourself making an appointment and rushing home, only to see that no one shows up.
NEGOTIATING IS NOT EVERYONE'S FORTE
Many people don't like the idea of doing a real estate deal through an agent. They feel that direct negotiation between buyers and sellers is more transparent and allows the parties to better look after their own best interests. This is maybe true, assuming that both the buyer and seller are reasonable people who can get along. Unfortunately, this is often easier said than done.
What if you, as a buyer, like a home but despise its wood-paneled walls, shag carpet, and lurid orange kitchen? If you are working with an agent, you can express your contempt for the current owner's decorating skills and rant about how much it'll cost you to upgrade the home without insulting the owner. For all you know, the owner's late mother may have lovingly chosen the décor. Your realtor can convey your concerns to the sellers' agent. When acting as a messenger, a realtor may be in a better position to negotiate a discount without ruffling the homeowner's feathers.
A realtor can also play the "bad guy" in a transaction, preventing the bad blood between a buyer and seller that can kill a deal. Keep in mind that a seller can reject a potential buyer's offer for any reason--including just because they hate his or her guts. An agent can help by speaking for you in tough transactions and smoothing things over to keep them from getting too personal. This often puts you in a better position to get the house you want. The same is true for the seller, who can benefit from a hard-nosed realtor who will represent their interests without turning off potential buyers who wish to keep quibbling about the price.
CONTRACTS CAN BE HARD TO HANDLE
If you decide to buy or sell a home, the offer to purchase contract is there to protect you and ensure that you can back out of the deal if certain conditions are not met. For example, if you plan to buy a home with a mortgage but you fail to make financing one of the requirements of the sale--and your mortgage approval falls through, you can lose your deposit on the home and could even be sued by the seller for failing to fulfill your end of the contract.
An experienced real estate agent deals with the same contracts and conditions regularly and is familiar with which terms should be used, when they can safely be removed and how to use the contract to protect you, whether you're buying or selling your home.
REAL ESTATE AGENTS CAN'T LIE
Well, OK, actually they can. But because they are licensed professionals, there are more repercussions if they do than for a private buyer or seller. If you are working with a licensed real estate agent under an agency agreement (i.e., a conventional, full-service commission agreement in which the agent agrees to represent you), your agent will be bound by common law (in most states) to a fiduciary relationship. In other words, the agent is restricted by license law to act in their clients' best interests (not his or her own).
Also, most realtors rely on referrals and repeat business to build the kind of clientele base they'll need to survive in the business. This means that doing what's best for their clients should be as important to them as any individual sale.
Finally, if you do find that your agent got away lying to you, you will have more avenues for recourse. For example, if you can prove that your agent failed to uphold his or her fiduciary duties, you can pursue it through your agent's broker, professional association (such as the National Association of Realtors), or possibly even in court. When a buyer and seller work together directly, they can (and should) seek legal counsel, but because each is expected to act in his or her best interest, there isn't much you can do if you find out later that you've been duped about multiple offers or the home's condition. And having a lawyer on retainer any time you want to talk about potentially buying or selling a house could cost far more than an agent's commissions by the time the transaction is complete.
NOT EVERYONE CAN SAVE MONEY
Many people avoid using a realtor to save money but keep in mind that it is unlikely that both the buyer and seller will reap the benefits of not having to pay commissions. For example, if you are selling your home on your own, you will price it based on the sale prices of other comparable properties in your area. Many of these properties will be sold with the help of an agent. This means that the seller gets to keep the percentage of the home's sale price that might otherwise be paid to the real estate agent.
However, buyers who are looking to purchase a home sold by owners may also believe they can save some money on the house by not having an agent involved. They might even expect it and make an offer accordingly. However, unless the buyer and seller agree to split the savings, they can't both save the commission.
THE BOTTOM LINE
While there are certainly people who are qualified to sell their own homes, taking a quick look at the long list of frequently asked questions on most "for sale by owner" websites suggests the process isn't as simple as many people assume. And when you get into an awkward situation, it can pay to have a professional on your side. Selling a home is a high-stakes, complicated process. Are you're a seasoned real estate veteran, exceptionally well-versed in home valuations, local market trends, pricing negotiations, legal documents, and tax protocol? If not, chances are you would benefit immensely from an agent's help - and that's another reason why you need a realtor.
THE NUMBERS DON'T LIE
There's a reason about 91% of home sellers opt to work with realtors: agents have the requisite experience, resources, and local market expertise to help you get the best possible offer in the shortest amount of time.
According to the National Association of Realtors, FSBOs accounted for 7% of home sales in 2019. The typical FSBO home sold for $200,000 compared to $265,500 for agent-assisted home sales.
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