Do you need a Real Estate Professional?
Do You Really Need a Real Estate Professional?
As the author of 10 best-selling books on real estate, personal finance and business, I’m often asked if hiring a real estate professional is really worth it. The question usually comes from sellers who are under the impression that a seller’s market (where there are not enough homes listed for all the buyers who want them) implies that it would be easy to sell “by owner.” But buyers are also often under the (false) impression that they will save more money by going it alone.
Here’s the truth: Every homebuyer and most home sellers should use an Licensed Real Estate Professional.
There are hundreds of thousands of real estate websites, many containing DIY stories about buying and selling real estate, so I understand why many people may not think they need expert help. What you can’t get from the Web, however, is the perspective and experience of an licensee who has worked with hundreds of clients over the years — and has watched thousands of properties go on and off the market — in the neighborhood in which you’re looking to buy or sell.
How Good Real Estate Professionals Help Buyers
Buying a home is a big step, and having a knowledgeable agent guide you through the process can only help. And it doesn’t cost you anything out of pocket if you’re the buyer — the seller pays the commission, even though the agent owes you her fiduciary responsibility. It’s all good on the buyer’s side.
A good licensee should be your eyes and ears during the homebuying process. Your licensee will prescreen homes on the market, pick the ones she thinks are right for you and weed out the homes that don’t meet your wants and needs. Your licensee will listen to you, guide your decision-making, make appointments for you to see the homes, chauffeur you around and provide helpful information on demographic data.
When you do find the home of your dreams, your licensee will help you put together the offer, negotiate a deal and provide assistance in setting up your home inspection.
A great licensee will save you time and effort, as well as provide you with a lot of information to help you zero in on the home that’s right for you. Doing it yourself is fraught with possible problems: If you are not familiar with the area where you are buying, how will you know what price to offer? If a competing bid comes up and you are not notified, you could lose out. Your real estate licensee is there to make sure these things don’t happen.
How Good Real Estate Professionals Help Home Sellers
For sellers, a full-service real estate licensee takes care of a lot of details, such as listing your home on MLS (the multiple listing service), marketing your home through traditional and online advertising and showing the home to potential buyers.
A good real estate licensee will not only give you information about other properties and competition in your area, but will also tell you what’s wrong with your house (small things can make a big difference — such as de-cluttering the family room or painting a bedroom to make it more neutral) and make suggestions on what you can do to help you sell it more quickly.
While I think it’s generally a good idea to use an licensee when selling your home, it’s not the cheapest way to go: The standard commission is between 5 and 6 percent of the sales price. Other options are available for sellers who don’t want to spend the money on an licensee, such as listing a home “by owner” with one of many FSBO (for sale by owner) websites or even by marketing the home yourself by setting up a website and using other online options such as Zillow.
Beware, however, that if you do try to sell your home yourself, you’ll have to put a lot of time and effort into the selling process. After all, you have to be the seller and the listing representative, and both jobs require a lot of time and energy.
Ilyce Glink is an award-winning author, columnist, radio talk show host and blogger who specializes in real estate and personal finance. Her articles appear on Yahoo, AOL, CBS News, and numerous blogs. Find her online at ThinkGlink.com.
Selling without a real estate licensee is a challenge. Among the things that an licensee takes care of is listing of your house on the Multiple Listing Service (MLS). This is the primary source for most real estate licensees who are searching for properties on behalf of clients. It is not unusual for licensees to only show homes that are listed on the MLS because they know that there will be another licensee for them to negotiate with, rather than having to deal with an unknown, non-professional seller.
Selling your home on your own can also requires a large amount of time and energy because you will need to do many of the tasks that the licensee would traditionally do on your behalf. People who sell their own homes are one of the following.
- Well acquainted with real estate procedures and contracts
- Testing the waters to see what they could get for their home if they wanted to sell
- Somewhat desperate and unprepared to lose money to commissions
One statistic that would be interesting but is difficult to measure is the difference in final sale price for a property sold by the owner and the same property sold by an licensee. Even though the interests of a real estate licensee may conflict with your best interests these professionals can still serve an important purpose.
Real estate licensees generally have a more realistic view of what a home is worth and good agents are adept at getting that price. Additionally, real estate licensees save you time by showing your home without interrupting your schedule more than necessary.
Perhaps the most important function of an licensee is to ensure that the contracts and other legal matters are in order. No one wants to get through all the stress of listing and selling their home and then find out that they are being sued over an avoidable breach of contract.
While the commissions do take from your bottom line, the advice and due diligence (DD) of a good agent are likely worth it. The challenge is finding a good real estate licensee and making sure that your interests are in line.
A good licensee is worth your money unless you have the education, time, energy and marketing experience to sell your own home. Finding a good licensee may involve some false starts, but if you go through referrals and set your own terms, you should find that the commission you pay is money well spent.