More Access to the Real Estate Market
A real estate agent will have better access to the market, and a special knowledge of local conditions. The agent is a full-time liaison between sellers and buyers. An agent will have ready access to other properties listed by other agents. Buyers’ and sellers’ agents know how to put a real estate deal together.
A real estate agent will trac down homes that meet your criteria, contact seller’s agents, and secure appointments for viewing the homes. On their own, buyers have more difficult time with these things. this is even more so the case when a buyer is moving due to relocation or employment opportunity and engages a “buyer’s agent” to handle matters.
Negotiating is Harder on Your Own
A real estate agent will keep transaction “at arm’s length”, such that personalities and emotions do not become envolved. Price negotiations take a special skill and understanding of the psychology of offering and counter-offering.
Agents keep the transaction dispassionate and rational. For example, a buyer (you) might like a home but despise its wood-paneled walls, shag carpet, and lurid orange kitchen. When you work with an agent, you can express your opinions on the current owner’s decorating skills and complain about who much it will cost to upgrade the home without insulting the owner. Your agent will translate that to the seller that you very much like the property, but can see having to spend $xx in decorating costs, and thus offer much less.
There are many contracts and documents involved in purchasing a house. The stack is more than an inch thick.
Unless you ara a real estate lawyer or title agent, these documents will be foreign to you. Yet, they require detailed and accurate completions. Buying a property is not necessarily a “fill-in-the-blanks” transaction and a mistake, let’s say in title work, could haunt the buyer well down the line after purchase. This very situation happened. A property that sat on a double lot was put on the market. The neighbor bought it to carve off a but of second lot to expand his own yard.
The seller then put the home back on the market and it sold. Months later, through a property tax notification it came out that in preparing new deeds for the properties, the expanded yard was correctly in the name of the neighbor; however, the house had been transferred to the home buyer. The new homeowner now owned both houses and the neighbor owned his expanded driveway and yard.
Fortunately they were good neighbors and settled the matter with a few signatures.
A real estate agent deals regularly with these contracts, conditions, and unexpected situations, and is familiar with which conditions should be used, when they can safely be removed, and how to use the contract to protect you.
You Won’t Necessarily Save Money
The point of not using a real estate agent would be to save money, right? Otherwise, why turn down professional assistance in finding a home to the buyers’ liking without their own effort and dealing with negotiations and the many attendant home-selling duties?
However, it’s unlikely that both the buyer and the seller will reap the benefits of not paying a real estate agent commissions. It works like this: An owner selling on his own will price the house based on the sale prices of other comparable properties in the area. Many of these property will be sold with the help of an agent; therefore, the seller profits in getting to keep the percentage of the home’s sale price that might otherwise be paid to the real estate agent (usually 6%).
Buyers looking to purchase a home sold by owners without an agent may believe they can save money on the home by not having an agent involved and so look solely at FSBO (For Sale By Owner) houses. They might expect it and make an offer accordingly. Unless the buyer and seller agree to split the savings, they can’t both save the commissions – and that’s if the listing price was not already lowered by near the commission amount to make it more market-attractive.
Here’s a short list of advantages that using a real estate agent can bring you to your buying experience:
- Education and experience
- Agents are buffers
- Neighborhood knowledge
- Price guidance
- Market conditions information
- Professional networking
- Negotiation skills and confidentiality
- Handling volumes of paperwork
- Answer questions after closing
- Develop relationships for future business
It’s extremely important to know the “ins and outs” of real estate agents before you bring one along with you to help in your search for a home. Just so that you might know what to expect and what will be expected from you.
Excerpted from my book “The Home Buyer’s Guide – Everything You Need to Know About Buying a Home”
Ricardo Parente, Realtor®
Coldwell Banker Realty | Winter Park, FL