We all know what a realtor is for. They’re those friendly and knowledgeable people who can help you shop for, bid on, and close on a house.
DIY homebuying sounds like a great idea — in theory
In 2014, something interesting happened in the housing market. More sellers were opting to go it alone and pocket the 6 percent commission they would have given to a realtor. Zillow confirmed that its For Sale By Owner (FSBO) listings nearly doubled from January 2012 to February 2014, rising from 2 percent to 4 percent based on data from Yahoo Finance.
This left many buyers and sellers questioning: Are realtors even necessary anymore? With all the information online, can’t I just figure it out by myself?
We lead by serving. Find out more about working with a lender that gives from the heart.
Are realtors becoming extinct?
Some sellers are attracted to listing without a realtor because they get to keep the extra commission (more on that below). But it’s worth pointing out that a seller will then be responsible for all showings, open houses, documentation, disclosures, contract negotiations, counter offers, and inspection and appraisal coordination normally taken care of by a real estate agent.
For buyers, the motivation to go home shopping sans-realtor is a bit subtler. Many buyers understandably believe that realtors are becoming obsolete because of the vast amount of technology at our fingertips. If you can find thousands of home listings online and locate a mortgage lender in the same way, then what specialized service can a realtor offer?
Have you ever thought about joining our team? We treat our loan officers like family.
Do you really need a realtor?
It’s no secret that today’s real estate industry is changing.
But there are at least six benefits of using a realtor to buy a house — and a few are unexpected:
Get the latest market info.
Beyond what you’ll find on Redfin and Zillow, etc., a skilled realtor can give you the most recent scoop on what’s going on in your local marketplace — based on the average price, financing requirements, and expected closing date on the type of home you’re looking for.
Having a realtor is like having the inside knowledge on the winning Powerball numbers, Qulia Bryant, realtor, MBA, at SBM Realty Advisors, says. “A great realtor will give you insight on the market surrounding your home, help you price it right, and make specific suggestions to help get your home sold at its maximum value.”
Get help navigating complicated (and constantly changing) real estate regulations.
Real estate laws and local regulations are detailed, to put it mildly. And red tape can vary greatly by year and from state to state. If you don’t want to take on the burden of legal research, a realtor can serve as your middleman.
Agents are licensed and held to ethical standards by the local boards, Bob Nyswonger, CRS, GRI, at Comey & Shepherd Realtors, explains. Because of this, complaints can frequently be addressed and handled without hiring expensive attorneys.
Have an interpreter in your ear.
It could take months or even years to master the encyclopedia of real estate jargon that exists — which makes having a realtor by your side to explain the terminology that much sweeter.
“Knowledge and expertise is one of the main reasons to use a realtor as opposed to listing and selling your house on your own,” Denise Supplee, realtor, investor, landlord expert, and co-founder and operations director of SparkRental.com, says.
Access that super-search.
You can find almost anything you want online, except for some of the most recently posted real estate listings. On top of the thousands of homes you’ll see on a website or app, your real estate agent can give you exclusive access to even more possibilities, including available properties that haven’t been advertised yet.
Then there’s the potential to save you weeks of search time. A skilled realtor can weed through properties and only show you houses that are an exact match. Agents are also often in the know about properties that haven’t hit the market yet. Having an agent can get you on the inside track to the perfect property for you. Likewise, agents know what today’s buyers are looking for in a home and can help present your house in its best light to bring maximum return, Nyswonger says.
Join the inner circle.
Whether you need a recommendation for an inspector, appraiser, home stager, or repair guy, an experienced realtor is likely to know someone who knows someone who can help you out. It’s always worth taking the time to research a referral, but these inside connections are often available on a shorter time frame and for a better price.
Plus, there’s the convenience factor. “You don’t have to show up every time someone wants to see your house, you don’t have to market the house yourself, and you are less stressed with fewer responsibilities,” Bryant says.
Bring the big guns to the negotiating table.
If you’ve never successfully completed a real estate negotiation and closed on a house before, you could be inadvertently (or purposely) taken advantage of at closing. During this process, you can expect paperwork and more paperwork, Supplee says. “Forget one detail, and the sale can be delayed or worse — flushed altogether.”
Having someone on your side of the table can make a big difference in helping you to secure a fair contract. A professional negotiating on your behalf allows you to play hardball on your deal and ensures you get the best deal possible.
Make the house-hunting process easier. Get prequalified for a mortgage first.
Jeff’s story: A cautionary tale
Anyone who’s attempted to buy or sell without a realtor before may appreciate where one homeowner is coming from. “For starters, I’m notoriously frugal,” Jeff Neal tells us. Neal, who owns two online stores, The Critter Depot and Hot Thermometer, says that when it came time to sell his existing house, he wanted to pay himself the 6 percent instead of a realtor.
“So, I listed my property in January 2017. The property was only listed on Zillow, and I had a ‘For Sale’ sign in the front yard. And the showings were slow. I only had about three showings between January and March. Then I started advertising it on Facebook, which is when I got a good showing that led to an offer,” Neal says. The offer was for full price, and he accepted it without hesitation.
But here’s where it went bad. Neal continues, “There were contingencies with the offer, which I didn’t pay much attention to because I’ve never sold a house before. One contingency was that the family buying my house had to sell their existing house.” Neal took his house off the market as the potential buyer went through motions of appraising and inspecting the home.
“Then I started looking for a new home. And this time, I was going to use a realtor to help me find a home because I wouldn’t have to pay the realtor fee,” Neal explains. “But as we’re looking at houses, my realtor brought to my attention that if the family buying my house didn’t find a buyer for their house, then my entire sale would collapse.” This would then mean Neal wouldn’t be able to buy a house.
Sadly, the family trying to buy Neal’s house never found a buyer.
Because he had a contract without specifics on contingency, Neal had to keep the contract open until the settlement date. As a result, Neal wasn’t able to advertise his house to look for a legitimate buyer.
This story doesn’t have a happy ending — yet. Neal says, “Now, I’m back at square one, trying to sell my house so I can get back to trying to buy a house. It was all a big waste of time.”
If you haven’t found a real estate agent you’re comfortable with (or don’t know where to look), we’d be happy to refer you to some agents we’ve successfully worked with in the past. A great realtor can work seamlessly with a great lender to get you into your new home on time. “Many people believe they will save some money and do things themselves. It is not that easy,” Supplee reminds us. “The reason many do try on their own is because a real estate agent makes it look easy. But to a realtor, it’s simple because we do it all the time.”
For educational purposes only. Please contact your qualified professional for specific guidance.
Sources are deemed reliable but not guaranteed.