Buying or selling a home: should you use an agent?

October 20, 2014

 

By PAULA HILDEBRAND JOHNSEN
Central Valley Assoc. of Realtors President

Paula _PJ_ Hildebrand Johnsen 2014 CVAR PresidentHome buying is one of the most significant investments you’ll make in your lifetime but given agent fees and commissions, why do you need to use one?

The answer goes beyond simply accessing available properties through the Multiple Listing Service. The true value comes from understanding the breadth of resources only accessible to a real estate professional. This can include data and statistics related to market pricing, home valuation and comparable pricing, as well as property disclosures and nuances to a transaction that are only shared with the agent, including showing times and other information that helps secure the seller’s privacy.

On the financial side, an agent can help assess your financial resources and borrowing capacity to ensure you are pursuing homes you can successfully secure in the lending process. They are also invaluable in the negotiating process, which can encompass everything from price and terms, to inclusion/exclusion of repairs or furnishings, to less-common elements such as rent-back options.

The inspection and closing processes are both highly complex and an experienced agent helps you navigate these steps, providing both advice and resources to help them go smoothly. They have access to qualified professionals who can do the required investigations and provide reports, and they will pull and explain all of the paperwork necessary in closing the transaction.

We all want to save money where we can, but using an agent in the real estate transaction process is not the place to cut corners. The money you might save in attempting to buy a home on your own will almost surely be lost in your time or money spent somewhere in the home-buying process due to inexperience.

It is also surprising the number of people who try and sell their home without the assistance of a professional agent. For Sale by Owner (FSBO) listings, while on the decline, still represented 9 percent of the total properties on the national market in 2012 (a staggering 430,000+ transactions) but what are the reasons driving sellers to take on the daunting task of selling their own home?

In some instances, the seller knows the interested buyer, but overwhelmingly it is to save money – primarily the agent’s commission fee. However, statistics show that FSBO listings sell for far less: according to the National Association of Realtors (NAR), the average sale price of a FSBO listing was nearly 19 percent less than the average price of an agent-listed property. What contributes to that?

FSBO sellers often don’t market their homes or know where to go to access the marketing tools that are available to them. They also don’t offer incentives or understand how to tap into the proven selling tools agents use.

Agents add value in the transaction process by bringing accurate, real time market and neighborhood data to ensure that a home is priced right. They also have experience with current real estate laws that can derail a sale and familiarity with the countless forms that can be confusing to the inexperienced. Before you consider selling your own home without the help of a licensed agent, ask yourself, “Will the risk really yield the reward?”

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