It doesn’t matter if you are buying a home or selling a home, the potential liability combined with losing money and wasting a lot of time, are things you should consider when making one of the largest financial decisions of your life. Yes there are so many services out there to help you sell your home online. There are even more websites available to showcase homes for sale and articles to help you through the home buying process. At The Trembley Group, we compare the process of deciding whether or not to work with a real estate professional to the similar process as evaluating your medical condition by using WebMD or a similar service. Would you use an internet opinion of your cyst being cancerous or see a trusted, local medical specialist for an accurate diagnosis? Exactly. So if you won’t trust your health to the web, then should you trust your finances?
Why Should You Work with a Real Estate Professional When Selling?
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 costlier than a Realtor’s commission in the long run. Buying or selling a home is a major financial (and emotional) undertaking. Find out why you shouldn’t discard the notion of hiring a real estate professional.
- Experience and Convenience
A real estate agent’s full-time job is to act as a liaison between buyers and sellers, or other agents. Most experienced real estate agents and brokers work full time in the industry so they are accessible every day to communicate with all parties in a transaction. They also know what needs to be done to prepare houses for sale, facilitate marketing and showings, negotiate the price and terms of a contract, and get their clients through the intricate details of the time between contract to closing. These details typically involve scheduling inspections, reviewing reports to help protect their client’s future investment, ensuring that appraisals and title work are ordered, and communicating regularly with the buyer’s lender to confirm mortgage approval. This level of experience is not usually held by the average homeowner. Think about it. Most real estate professionals sell more homes in a month than you have in your lifetime. Another factor to consider is your accessibility. If you are looking to sell your home yourself, you will have to solicit calls from interested parties. You will be required to 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 find that no one shows up.
As a For Sale by Owner, you will be contacted and approached by complete strangers. Are they seriously looking to purchase your home, or are they thieves interested in canvassing your home for access and security to plan a potential burglary? An even more dangerous situation would be if they were meeting your family members, your wife and children, with the malicious intention of causing bodily harm or injury to them. Don’t take our word for it. Watch this special report and crime alert from ABC news in regards to fake home buyers robbing homes for sale. Safety should always be a priority for you. When working with a real estate professional, the risk of theft and other criminal activity is minimized. That’s because buyers working with a real estate agent are typically pre-screened, pre-approved, and are serious prospects. Real estate agents don’t waste time working with people who aren’t committed to purchasing a house. This could give you peace of mind and help protect your home and your family.
Homeowners who list their property for sale with a real estate professional who is a member of their area’s Multiple Listing Service (MLS) receive access to more agents and buyers than in all other forms of marketing and advertising combined. This means that your property is shared with every member agent in the local market, and thus, as well, every buyer of each of those agents. Other tools used by successful agents are sharing the listing with their personal contacts, buyer network, and other colleagues in their industry. This exposure could generate more referrals for potential buyers for your house. Another benefit to the MLS is listing share on hundreds of consumer real estate websites, from Realtor.com and Homes.com to HomeFinder.com, Zillow.com, and Trulia.com …just to name a few!
Why Should You Work with a Real Estate Professional When Buying?
Since most real estate professionals work full time, they are available to watch the market for new listings and price reductions of homes that meet your needs. They also have access to for sale information that is updated real-time so you don’t have to waste time looking at homes already under contract. Keep in mind that most consumer real estate websites such as Zillow and Homes.com receive listing details that are not updated regularly, so a large percentage of those listings are unavailable. Furthermore, your real estate professional is able to schedule all showing appointments with homeowners and other agents so you don’t have to make the countless phone calls and send numerous emails and wait for a response. Real estate agents also have access to preferred lenders and attorneys to help guide you through the pre-approval and closing process. This access could save you a lot of time and money, as well as potential stress and countless headaches. When you buy a home on your own, you become the only person to coordinate each aspect of your transaction. Do you really have the time for all that, especially if there are problems such as mold in the crawlspace that arise and need special attention?
- Mediation and Diplomacy
Some people don’t like the idea of closing a real estate purchase through an agent and feel that direct negotiation between buyers and sellers is more transparent and allows the parties to better look after their own best interests. This could be true–assuming that both the buyer and seller in a given transaction are reasonable, diplomatic people who are able to get along and don’t have an underlying intention of taking advantage of the other party. Unfortunately, this isn’t always an easy relationship.
What if you, as the buyer, like a home but don’t like its wood-paneled walls, shag carpet and horrible green kitchen? If you are working with an agent, you can express your dislike for the current owner’s decorating style and complain about how much it would cost you to upgrade the home without insulting the owner. For all you know, the owner’s late mother may have lovingly and painstakingly chosen the current décor. Your real estate agent can convey your concerns to the sellers’ agent. Acting as a messenger, the agent may be in a better position to negotiate a discount without ruffling the homeowner’s feathers.
A real estate agent can also play the role of mediator in a transaction, preventing the bad blood between a buyer and seller that could kill a deal. Keep in mind that a seller can reject a potential buyer’s offer for any reason–including just because they dislike their hair color or car they drive. An agent can help by speaking for you in tough transactions and smoothing things over to keep them from getting too personal. This can put you in a better position to get the house you want. The same is true for the seller, who can benefit from a tough real estate agent who will represent their interests without turning off potential buyers who want to negotiate the price.
- Contract Details
If you decide to buy or sell a home, the offer to purchase contract is there to protect you and ensure that you are able to back out of the deal if certain conditions aren’t met. For example, if you plan to buy a home with a mortgage but you fail to make financing one of the conditions of the sale–and you aren’t 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 and conditions on a regular basis, and is familiar with 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.
- Real Estate Agents Can’t Lie
Well, okay, actually they can. However, 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 bound by license law to act in their clients’ best interest (not his or her own).
In addition, most Realtors rely on referrals and repeat business to build the kind of client 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 has lied to you, you will have more avenues for recourse, such as through your agent’s broker, professional association (such as the National Association of Realtors) or possibly even in court if you can prove that your agent has failed to uphold his or her fiduciary duties.
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 misinformed about multiple offers or the home’s condition. Keep in mind that 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.
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 a difficult situation, it can really pay to have a professional on your side. There’s a reason why 87% of home buyers worked with an agent to purchase real estate. Check out more trends in the Profile of Home Buyers and Sellers published by the National Association of Realtors.
Many people avoid using a real estate agent to save money, but 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 the 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 home by not having an agent involved. They might even expect it and make an offer accordingly. Unless the buyer and seller agree to split the savings, they can’t both save the commission.
Check out the research from the National Association of Realtors and decide for yourself how much money you really save. Based on NAR studies, homeowners who sell by owner typically sell for 13% less than if they had sold with an agent. So even with a 6% real estate commission, a homeowner would make approximately 7% MORE, and of course, whatever the value of their time is (an average of 100 hours) in dealing with all aspects of the transaction themselves. What are YOU worth per hour?
Need help? Call The Trembley Group at 843.945.1880 ext. 100 and we’ll help you look for the perfect listing or buyers agent!
At The Trembley Group, we pride ourselves on being the experts at more than just selling real estate. We are local residents, some of us have been here for a lifetime. The rest of us will be here until the end of time. We love living, working, and playing in the diverse backyard of Coastal Carolina, and look forward to helping you live and love your dreams soon too. Please reach out to us by phone or email for personalized service and one-on-one advice.