Over the last 30 years, I’ve met somewhere in the neighborhood of 25,000 real estate agents. I’ve been an agent myself and owned my own real estate brokerage. I’ve bought homes, sold homes, remodeled homes and built homes from the ground up. Our company now has more than 5,000 individual real estate agents who use our monthly marketing program. As you can see, I’m a firm believer and a tireless champion for the value of the individual real estate agent.
The internet has changed so many industries over the last couple decades. Real estate is no exception. But unlike so many tasks that can now be automated and self-managed through technology, buying or selling a home isn’t one of them.
That’s not to say you CAN’T do it. You can. You can also learn to repair an automobile engine, fly a plane, or cut your own hair. If you have the time, motivation, intelligence and training to manage your own real estate transactions, then you should absolutely do so. Of course, you’d still be lacking the experience, wisdom and familiarity that a seasoned professional would provide.
Because when you hire a real estate agent, that’s exactly what you are getting: A Professional. Someone whose job it is to be educated, knowledgeable and experienced in the hundreds of moving parts and people that make up a real estate transaction.
You may know someone who told you just how much money you can save and just how easy it is to buy or sell a home without professional support. Good for them. They got lucky. They probably didn’t have any issues come up with an inspection, or a contract dispute, or a missed loan application deadline, or a rent-back request or a problem with the title. They probably didn’t have a deadline to move, or need help with creative financing, and already knew everything there was to know about the neighborhoods they were considering. But that’s not the case for most people or most transactions. And when you need those things, you need a professional.
If you’re thinking of buying or selling a home, there are hundreds of really good reasons to seek out a qualified, professional real estate agent, but in my experience, it really comes down to three things: Time, Money and Risk.
Using a professional real estate agent will very likely save you tens if not hundreds of hours. According to the National Association of Realtors, the average transaction consumes over 40 hours. But that is for someone who already knows what they are doing, has all the tools at their disposal, and only consists of an average that is skewed by the market of a few years ago when homes were selling in hours. If you’re already working a full-time job, do you have the time to put in another 10-20 hours a week for the next couple months? Are you willing and able to take the time away from that job that is necessary to answer buyer/seller/attorney/agent/inspector requests to keep a negotiation or a contract moving forward?
Yes, a real estate professional will charge you for their services. It’s up to you to decide if it’s worth it. In a real estate transaction, the money isn’t just limited to getting the best-selling price or getting a low-ball offer accepted. It’s about knowing the comparative market to set the correct price that attracts interest from multiple parties, will make it past the appraisal objection, will reduce the number of repairs and concessions requested. It’s about helping buyers set a realistic budget based on income and prequalification, loan options, down payments and more. The best real estate agents are expert negotiators. They know the standard objections and requests and know how to respond. They know how to deal with contingencies and multiple offers. They may be able to provide information on creative financing to attract additional buyers. Do you know your options when a home doesn’t appraise for the contract price? Are you aware of the tax implications of your home sale? Items like a homestead exemption could save you tens of thousands of dollars in taxes. Agents aren’t accountants or repair professionals or mortgage lenders, but they can guide you to other professionals and arm you with the right questions to ask.
A real estate transaction involves a high-dollar legal contract with specific performance requirements and potential monetary penalties for non-performance. Missed deadlines can lead to lost earnest money. Lack of correct disclosures can lead to lawsuits. A good real estate professional has local knowledge of things like flood plains, soil issues, zoning issues and HOA requirements. While they are not contractors, they have experience and may spot red flags that you may miss when doing inspections. They understand the importance of title reviews and insurance. A professional can also offer an objective opinion when your emotions are running high. This can keep you from making mistakes in both buying and selling. If a seller or a buyer is working with a real estate professional, that person has a fiduciary responsibility to represent their client’s interests – NOT YOURS. You can put yourself at a disadvantage. Those sellers and buyers also generally prefer to work with a represented buyer or seller knowing that the process will run smoother and be more likely to make it to closing.
If you’re considering buying or selling a home and exploring the idea of a For Sale By Owner, start by doing your research and asking yourself all of the questions above and then make a decision that includes an analysis of all the time, money and risk involved.
Chad Rueffert has more than 35 years of experience in real estate, land development and homebuilding. He is also the founder of From Your Friends Relationship Marketing – a marketing service designed to keep residential real estate professionals in contact with their past customers and referral sources.