Posts Tagged as fsbo

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5 Good Reasons to Use a Real Estate Agent

Unless you are a realtor or retired agent, it’s not a smart idea and may cost you in real dollars. Here are 5 good reasons to use a real estate agent.

As the real estate industry continues to move online, and as buyers and sellers have increasingly easy access to real estate data and information, more and more buyers and sellers may decide to go it alone, without the help of a real estate professional. But unless you are a realtor or a retired agent, it’s not generally a smart idea and may cost the home seller in real dollars. Here are 5 good reasons to use a real estate agent. Drumroll, please …

Split the check. Really, the major reason people choose to buy and sell homes without a professional comes down to money. They want to save on commission. But what if buyer AND seller are playing this game? The sale price of a home takes an agent’s commission into account. Comps on houses in your area are made on houses that overwhelmingly are sold by agent. But if they buyer is also going agent-free, they’ll likely offer down, because they know the agent’s fee isn’t necessary. Buyer and seller can’t collect the unpaid commission. Someone’s going to lose.

Don’t you already have a full time job? Selling or buying property can be extremely time intensive. There is a lot of research to begin, home viewing, deal making, negotiating, etc. Whether you work outside the home or not, unlike a professional realtor, I can bet you aren’t working the real estate circuit 40+ hours a week. A qualified agent has access to properties and agents you don’t, can track down and vet houses that meet your specifications, schedule appointments and play phone tag on your behalf. Selling without an agent is even more time consuming and a lot less fun. You have to solicit all the calls from potential buyers, someone weed out the looky-loos, answer questions, show viewers through your home, prep and stage, and more. What happens if the home doesn’t sell in a timely fashion? It starts to get a bad rep. Not worth it.

Did you captain the debate team in high school? Negotiating is tricky business. Sellers often have a lot of personal attachment and can’t see things outside of that bias. Buyers may not feel confident about speaking up when they see a potential issue. Or they may feel overly confident and do damage when they simply want to criticize what they see as hideous decorating techniques. Agents can represent your interests, leaving the parties with emotional involvement right out of the thick of things. Deals have gone dead over insults, real or imagined. Let your agent play the bad cop, if necessary. Let them schmooze, too.

It’s a trust thing. Your agent, if working under a conventional, full-service commission agreement, is bound by law to work in your best interests. Now that doesn’t mean all agents are created equal and all are equally trustworthy. But it does mean that you have recourse if something goes wrong. Your agent is responsible to his broker or professional association and to the state in which he is licensed. What’s more, your agent probably got your business based on referral. And he or she will count on you to do the same. This is further incentive, beyond the legal obligation, to put your needs first when it comes to buying or selling a home. On the other hand, if you buy from a FSBO and you’re without an agent, you have two people working for their own interests, with much less holding them to honesty and accountability. Hiring a lawyer later is much more expensive than securing a real estate agent at the start.

Sign on the dotted line. Speaking of lawyers, you may need one if you choose not to use an agent or broker. Contracts are vital, and they aren’t always easy to understand. What if you fail to make financing one of the conditions of the sale, for instance, and then find you aren’t approved for the mortgage? The seller could sue you, could keep your deposit, and could derail your home buying dream. Using an agent ensures you have someone on your side well versed in real estate contracts who can look out for any red flags or potential pit falls and make sure you have everything you need secured and in writing from the get-go.

Real estate isn’t a simple business. Do yourself a favor and rely on a professional. Happy house hunting and selling!

Agents, please feel free to send this on to your clients or share it on your own blogs and social media (with proper credit). And let me know any other reasons you suggest home buyers and sellers use a real estate professional!

Why Not FSBO

Many home sellers looking to boost their revenue may consider listing their home as For Sale By Owner (FSBO). The logic, usually, is that not having to cough up an agent’s commission will be worth the headache and hassle. That logic is, more often than not, fatally flawed. There are few reasons for selling as a FSBO listing. And there are many reasons why not FSBO.

Got a potential client on the fence? Tell them:

One major thing home sellers notoriously underestimate is the cost of their time. Selling a home takes work. That work requires time. Real man hours. How much is your time worth? Put an actual dollar amount on it. That commission probably doesn’t look too bad now, does it? It might even look like a total bargain.

While we’re on the subject of time, let’s talk about wasting it. Remember that figure you came up with? Imagine throwing it away every time an unqualified buyer is lost, making you start from the beginning. Those unqualified buyers are likely to include a lot of ‘lookers’ who are interested in nosing through your house more than placing an offer. On the other hand, hiring a qualified agent means your realtor will be brining financially qualified people through your home, who are interested in the type of property you’re selling and the location. The leads will be better, and you won’t have to stop what you’re doing to show them your property.

Pricing can be particularly challenging for the FSBO own. Unlike brokers and agents, home owners typically do not have the resources to establish legitimate comp properties that adequately justify an asking price. What’s more, the owner/seller is not likely to understand how to predict appreciation or value. Underpricing, surprisingly, is equally common.

When problems arise—and they often do—the best help usually comes from experience. But FSBO sellers are typically inexperienced in real estate transactions, and may encounter significant negotiation setbacks on price, concessions, objections and legal issues. If major objections are raised, the home owner is put in the position of having to defend his home, and is rarely able to be objective.

More issues to consider include a lack of buyer exposure, unknown or unpredictable marketing/advertising costs, lack of a good follow up system, safety, liability, and market age.

Understanding the value a quality real estate professional brings to the home selling process is really important. Do your homework, find someone you can trust, and rest assured that commission is well spent and well earned.