5 Reasons to Use a Professional Real Estate Agent
The proliferation of services that help homebuyers and sellers complete their own real estate transactions is relatively recent, and it may have you wondering whether using a real estate agent is becoming a relic of a bygone era. Doing the work by yourself can save a commission, but doing a bad job can end up being more costly. Buying or selling a home is a major financial (and emotional) undertaking. Do not discard the importance of hiring an agent. A good agent brings value.
1. Convenience
A real estate agent’s full-time job is to act as a liaison between buyers and sellers. You want a full time agent, and not a part time hobbyist with a license. A full time agent will know the market and they will have easy access to all properties listed by other agents. They know what needs to be done to get a deal together, and they will have the resources to make it happen.
2. Negotiating
Many people don’t like the idea of using a real estate agent. They believe that direct negotiation between buyers and sellers is more transparent and allows the parties to better look after their own best interests. This is probably true, but it assumes that both the buyer and seller in a given transaction are reasonable people. Unfortunately, this is often not the relationship.
The personal interests of the buyer and seller are usually at odds and this often creates unnecessary drama. Unnecessary drama can kill a deal.
3. Real Estate Contracts
If you decide to buy or sell a home on your own, you will quickly learn that the paperwork is not only critical but it is also overwhelming. The purchase contract is designed to protect the parties and ensure that each are able to back out of the deal if certain conditions are not met. A simple mistake such as not making financing one of the conditions of the sale–and if you as a buyer are not approved for the mortgage–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 on a regular basis, and should be intimately familiar with their application. Your agent will know which conditions 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. Your agent should also have errors and omissions insurance, which will further protect you in the event that an error occurs.
4. Real Estate “Liars”
Your agent has a fiduciary duty to you-they have experience and they know the industry. A good agent knows what is possible and what is not, and they can often avoid the costly pitfalls associated with placing too much faith on statements or promises made by opposing agents, lenders, owners, sellers, buyers and so on.
5. It Does Not Save That Much Money
The number one reason people choose to not use a real estate agent is that they believe they will save money. However it is unlikely that both the buyer and seller will reap the benefits of not having to pay commissions.
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. In theory, that all may sound attractive, but are you missing the bigger picture due to your lack of experience and knowledge? Did you price it correctly? Did you sell it in a timely manner? Did you negotiate well? Did you give the property the proper exposure? Did you provide the proper disclosures? Did you do all of the paper work correctly? Are you insured in the event that you did something wrong?
Buyers who are looking to purchase a home sold by owners may also believe they can save some money on the home by not having an agent involved. They might even expect it and make an offer accordingly. However, unless buyer and seller agree to split the savings, they can’t both save the commission.