DO YOU REALLY NEED TO HIRE A REAL ESTATE AGENT?
This is a question that often comes up, especially when dealing with more expensive homes. The generally negotiated Realtor’s commission in this area is 6% (3% for the listing broker and 3% for the cooperating broker), an expense that can really add up and a savvy buyer or seller can find it hard to justify this expense for a seemingly effortless transaction. On the surface, it appears that Realtors show and list homes, the MLS does most of the work connecting buyers and sellers and the Realtor helps prepare the paperwork and negotiates the sale according to what the clients want. All that’s left is to show up at the closing table, hand over the keys and collect a check, right? If only it were that simple.
A well-qualified Realtor does a lot behind the scenes working with lenders, title companies, home inspectors, appraisers, structural engineers, to name a few, to take most of the added pressure away so the experience seems effortless. There is a tremendous amount of work that takes place after an agreement is reached between the parties that Realtors handle on behalf of their clients and that’s when everything goes right. What do you do then when something goes wrong?
The Texas promulgated Real Estate contract clearly stipulates that Realtors are not attorneys and cannot give legal advice, however, Realtors are trained experts to recognize situations where legal counsel is appropriate. For the unrepresented buyer who hires an attorney to draft a contract, when things go south in a real estate deal, this buyer will pay an attorney’s rate per hour to resolve the matter. Whereas, a represented buyer will be protected by a licensed real estate professional, generally at no cost to the buyer, with the full resources of their broker behind them. In most cases, the Listing Agent pays real estate commissions and smart buyers know this and take full advantage.
There is also the argument to be made about the benefits of technology available to assist buyers and sellers with gathering a fair amount of information about local real estate on their own. Just how accurate is that information? About 92%, which means there is an 8% margin of error in the accuracy of the information. If you consider a home valued at $750,000, the variance +/- 8% is $60,000 to over/under value your home. The comparative market analysis data found online will get you in the ballpark but only a licensed professional can provide complete, accurate and verifiable information about what properties are worth in today’s market.
No doubt, technology is paving the way for well-informed buyers and sellers. Yet, considering the complexities involved in the exchange of real estate, it isn’t likely in the foreseeable future that consumers will add their dream home to an online shopping cart, despite the best efforts of companies today marketing Realtors out of the equation. The reason Realtors are an important part of the process is simple; the legal transfer of real estate involves a lot of moving parts to get it done right – not just at the closing table but as a long-term investment consideration. Unlike stocks, Real estate is an asset that is not easily liquefied, so knowing you are making a sound investment before signing the contract will save you time and money later on. As important, a great Realtor will know how to get you out of a contract and get your earnest money refunded to avoid a bad buying decision.
Taking the time to interview the right Realtor is an important first step in making your next move. So how do you separate the good Realtors from the great ones? Do your homework. As with any professional service provider, it is a good idea to interview more than one and make sure you are asking the right questions – How long have you been in real estate? Do you have any special certifications? Do you have a strategic marketing plan? Look them up online; see what others are saying about working with them. Having a real estate license and being a Realtor® are two very different credentials. Make sure your Realtor has prepared well to work on your behalf. Friends and family members may not always be the best choice. What if you have to fire your Uncle or next-door neighbor? Get to know them personally; you will be sharing sensitive information and they have a fiduciary responsibility to protect your interests. Another crucial benefit you have working with a Realtor.
When choosing your Realtor make sure they are listening to what you have to say and are willing to execute the plan according to your wishes. In a sea of transactional agents, it’s refreshing to find a Realtor who is relational; one who is vested in your needs as a client and will continue to be a valuable resource long after the sale. Often times, when asked if you have a Realtor you would refer your friends and family to, most people will say they don’t remember the Realtors name who sold them their home. You’ll never forget a great experience with a Realtor and they will make it a point to stay in touch with you – another good sign you’ve found the right one. You have many choices when it comes to buying and selling real estate and the first choice should always be to hire the right professional. Great Realtors are not only knowledgeable about the market, they are skilled negotiators and creative problems solvers.
Its important to understand that when you are properly represented as a buyer or seller, you are the boss and what you want matters. If you are not completely satisfied with the service you receive, you can legally cancel your agreement with your Realtor, but if fees have been earned according to the contract, they are still due and payable. Make sure your Realtor fully explains all the contract terms, beginning with the representation agreement, followed by the written offer and the closing process. You should be well informed through the entire process.
Buying and selling a home is already an emotional and stressful process, so having good representation means the difference between an experience you will never forget and one you want to forget quickly. If there is any doubt about whether or not to hire a professional, consider the long list of potential problems that could arise and the recourse you have. A Realtor is not likely to step in after problems arise, so you are left with seeking legal counsel, which again can be costly. Realtors on average will get you more money for your home and will close quicker because they are capable of anticipating problems and finding solutions that work for everyone involved.
So when you’ve answered the question – Do you really need to hire a real estate agent? – and the answer is yes, hire the best. When your Realtor delivers, the highest compliment your Realtor can ever receive is a referral from you. If your Realtor has done their job in exceeding your expectations, pay them that well deserved compliment. Your friends and family deserve the best.
The Austin Home Sold Team is committed to serving you at the highest level. We will always outperform your expectations before, during and after you move into your new home. Whether you are looking for a lease or a million dollar home, each client is given the Five-Star treatment. Why? Because we insist! Call us today at 512-870-7708 to make your next move your best one.