Whether buying or selling, both sides can benefit significantly from hiring a real estate agent to assist them.
When listing your home, of course, you want to get as much for your home as possible, and you might think saving on commission is a great idea. A 2017 study indicated that FSBOs fetched about 30% less than realtor-listed properties. There are reasons for this – marketing, anticipating problems and getting them fixed, negotiation, and access to better information.
And you’re probably going to have to pay some commission anyway if your buyer is represented by a realtor. The buyer’s agent’s commission is typically factored into the deal.
And why not use an agent if you’re the buyer? The seller is typically paying the commission, not you. Market factors can affect this, but most of the time a listing commission is split between buyer and seller agents. Having an agent negotiate for you can save you money over the course of the purchase.
2. Attention to Detail
You might be far out of your element when it comes to reviewing and understanding the multiple documents involved in a real estate deal. Most people only buy and sell a home a couple of times in their lives. Realtors deal with this stuff every day! You should have a thorough understanding of what you’re getting into regardless of whether you’re buying or selling. Purchase agreements alone can top 10 pages, not to mention federal, state, and local document requirements.
Realtors are far more familiar with all this paperwork than you are. Consider this if you’re still thinking about saving money: Some mistakes or omissions in these documents can cost you as much as that the commission you were trying to avoid paying—or even far more.
You can also be assured that a realtor will be checking on mortgage approvals, inspection repairs, appraisal reviews, etc. It’s stressful enough just to pack and move – you don’t want to miss something important!
Consider hiring a broker for a smaller one-time fee to simply review your contracts before signing if you’re still dead set against hiring an agent to take care of all this.
Your real estate agent has your back whether you’re a buyer or a seller. Realtors have what’s known as a “fiduciary” responsibility to their clients. They legally obligated to put their clients’ best interests first. This duty imparts a very high standard for confidentiality. As a buyer, do you really, really want to turn over your most intimate financial details to a FSBO seller who’s under no legal obligation to keep the information confidential? The same goes for turning any and all information over to the seller’s agent, who has no fiduciary responsibility to you but only to the seller. Your own agent would know whether any information the other agent is requesting from you is reasonable.
You do have recourse if you’re the buyer and the seller’s agent has lied to you, misled you, or disclosed confidential information. You can report it to the agent’s professional association, such as the National Association of Realtors. But again, this assumes that the seller has an agent. You’ll have far fewer options if the property is FSBO.
4. Realtors Know What to Look For
Buyers usually have an idea of what they want in a home, from number of bedrooms to an attached garage to any number of other must-have and must-not-have factors. You’ll probably feel pretty comfortable looking at homes with that list tucked firmly in the back of your mind. But your agent will be alert for issues that might not cross your mind, such as furnace issues, leaks, roofing problems, and mold and insect issues. Experience and knowledge can end up saving you thousands down the road.
You know exactly how much you want for your home if you’re the seller, but is the price you’ve arrived at reasonable? You might only know for sure if you’re able to identify comparable sales that confirm that you’re in the right range—or not. Just because the home down the street had the same number of bedrooms and bathrooms doesn’t mean it has the amenities your home has. An agent can dig a little deeper into comparable properties.
You might not be a negotiation shark if you don't happen to be an attorney, mediator, union rep…or a real estate agent. Remember that fiduciary responsibility your agent has to you. It’s your agent’s job to get you the best possible price for your home or to see to it that you get the best possible deal on the property you want to buy.
Agents are trained to negotiate well, if only from experience. They know what normally works and what does not. Most have tried-and-true techniques all their own. There is more to consider than just price, so being able to discuss all contingencies and what they may mean is also important, especially in competitive situations.
You, on the other hand, might be willing to come up with $10,000 more to purchase that to-die-for home, never realizing that it’s really not necessary because you possess certain bargaining chips. It’s just more money saved if you have an agent who prevents you from taking an unnecessary financial plunge. The trick is to recognize when you need help and to find the right person.