If you are buying or selling a home, then you might question whether or not you want to use a real estate agent. More than likely, this is because you want to save some cash and avoid the extra charges that comes along with hiring a professional to handle your purchase or sale. However, if you plan on selling or buying a house on your own because you think that you will save on costs, you might be surprised to find out that there are downfalls associated with avoiding paying the commissions. These include paying extra costs that might not see if you are not a season real estate agents. Also, most home sales can actually take more than twice as long when you skip out on hiring an agent. If you are a first-time home-buyer, then it is especially wise to hire the agent to help the process along.
There are many benefits that come along with hiring a professional to handle your real estate needs. First and foremost, a real estate agent can find properties a lot faster. This means that if you are buying a home, they can present you many options that you might have a hard time finding if you were on your own. If you are selling a home, using an agent will make the sale go much faster which saves you a lot of money in the end. In the following article titled “10 Benefits of Using a Real Estate Agent to Buy a Home” by HowStuffWorks, they discuss this topic in further detail. Here, we have listed some of the best tips that they mention in this article:
While anyone can spend a few minutes online and pull information on sales of comparable houses, real estate agents have the experience to know whether a specific house is overpriced or under-priced. In the best-case scenario, an agent will have such a good idea of what you’re looking for that she won’t even waste your time touring houses that won’t work.
Though most homes for sale are widely available for buyers to assess on Web sites, in some cases, sellers don’t want the fact that they’re selling to be widely publicized. In those cases, only the real estate agents know the houses are for sale.
If you’ve ever bought a house, you’ve probably dedicated a full shelf somewhere to the documents that were involved in the transaction. These probably include the written offer, the written and signed counteroffer, the little details (like specific repairs) and what exactly was and was not included in the sale. The paperwork can be tiresome.This is when a good real estate agent can save the day. The odds of missing something, not initialing a margin or not checking a box, can drop substantially when you’re working with someone who knows the paperwork inside and out.
If you are selling a house, then a real estate agent can list your house with the MLS which will make you house more accessible for those who are interested in buying a house. If you are buying a house, a real estate agent will know if the house is overpriced and spot any hidden costs, such as repairs, that you might not be aware of. Furthermore, you might be able to find your dream house on your own but can you handle the paperwork and negotiation process that comes with it? This can be tricky and sometimes only a seasoned real estate agent can truly handle it.
However, if you are not a first-time home-buyer or seller, then you might stand a better chance at selling or buying your home. You can save money on the commission which can definitely add up. However, you will have to know that value of the house and sometimes doing it yourself can actually cost you more in the long run. In the following article by Redfin, they discuss some aspects of buying or selling your home without an agent:
If you work without an agent, you can only buy for-sale-by-owner (FSBO) homes: False. You can make an offer on any home that you could if you were represented by an agent.
If you buy without an agent, the seller’s agent will just keep the extra commission: Tricky. If you’re not careful, this can definitely happen. Many listing agents have contracts with their clients that have variable commissions; if the buyer doesn’t have an agent, the listing agent automatically gets the “leftover” commission that would normally go to the buyer’s agent.
Sellers won’t take you seriously if you don’t use an agent: Toss-up. Every seller is different. Some might be happy to work with you, and others may not be interested. If you’ve done your homework, can offer proof of finances, and have all your paperwork in order, you’ll raise your chances of a good reception.
You need an agent to be present for inspections and appraisals: True. Usually, a licensed agent is required to be present for inspections or appraisals, and usually this is the buyer’s agent. You may be able to get the listing agent to agree to be there for these tasks, in the interest of closing the deal. Again, everyone is different; some listing agents will be happy to go the extra mile to close the deal, while others will insist on at least a partial cut of what would have been paid to your agent. Time to practice those negotiation skills.
Sections from this article was originally found on the “Redkin” website which can be viewed here.
Even if you sell or buy a home on your own, you have to be very careful. The most probable reason that you don’t want to hire an agent to begin with is to save yourself the typical 3% commission that goes to your agent but without an agent, you could be paying more than the commission that you would have paid your agent to begin with. This is especially true if your negotiation skills aren’t exactly up to par. Furthermore, if you are not using a real estate agent, the buyer’s or seller’s real estate agent might pocket some commission anyhow. They might not take you as seriously which means that you are entering a tough battle to begin with.
As tempting as it may be to sell a house on your own, you really have to know what you are doing. It is not advisable to be a first time home-buyer or seller and take this as an opportunity to find out if you have what it takes. Even if it is not the first home that you are buying or selling, you have to have a specific set of skills in your belt that make this a realistic option and not one that ends up costing you a lot in the end. In the following article by Forbes, they discuss some of the reasons of why you still need a real estate agent:
A real estate agent’s full-time job is to act as a liaison between buyers and sellers. This means that he or she will have easy access to all other properties listed by other agents. Both the buyer’s and seller’s agent work full time as real estate agents and they know what needs to be done to get a deal together.
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.
Many people eschew using a real estate agent to save money, but keep in mind that it is unlikely that both the buyer and seller will reap the benefits of not having to pay commissions.
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The bottom line is that if you plan on selling or buying a home, it is better to hire a real estate agent unless you feel that you have enough experience to understand the transactions, see any hidden costs, and posses the necessary negotiation skills. Most people who want to avoid paying the agent’s commission might end up paying more than what the commission would be anyhow.