Buying or selling a home is one of the longest, most detailed transaction processes anyone will experience in a lifetime. And yet, one of the most common questions people ask is, “Do I really need a real estate agent?”
Why you need a real estate agent
You can’t automate real estate.
Many grocery stores have self-serve check-out lines. Most gas stations have credit card machines built into the pumps. Some restaurants even allow you to punch your own order into the computer. But a real estate transaction is far more complicated than buying milk and bread. Automating the process of buying and selling property leaves far too much room for mistakes like missing legal deadlines or failing to obtain the appropriate inspections, to name just two.
No two real estate transactions are the same.
Do you know how to legally handle a multiple-offer situation? How about negotiating based on repair-requests? What will you do if the deal falls apart the day before closing because home insurance pulls out? “Agents, even ones who have been in this business for 10 years, say, ‘I’ve never had a transaction like this,’” Round Table Realty broker and owner Howard Flaschen says.
Real estate agents have access to information you don’t.
If you’re selling your home, a Realtor can advertise it to 80% more people looking for homes that you can on your own.* If you’re purchasing, a Realtor can see the history of a home on and off the market, as well as all the other homes on the market that fit your criteria.
You will undoubtedly leave money on the table without a real estate agent.
The National Association of Realtors says sellers lose an average of 22% of the sale price when they try and sell themselves. This is both because of the lack of advertising as well as a Realtor’s ability to negotiate a price.
The personal touch will always win.
Having a human being you can call to get clarity, recommendations, and information during a real estate transaction is irreplaceable. You can use Google and friends in the business, but no one will work as hard for you as the Realtor guiding your transaction.
Do you need a real estate agent? The answer is yes. You really do need a real estate agent! Even if you know a lot about real estate and have the time to spend investigating a deal, it doesn’t replace having a full-time, professional real estate agent working on your side! There are specific reasons why a real estate agent is important when you're buying a home versus selling a home and we'll cover those reasons next.
Why you need a real estate agent to buy a home
The amount of moving parts in the purchase of a home is incredible. While searching for homes on the internet is incredibly convenient, it is not always incredibly accurate. A Realtor is the only person who can get you the most up-to-date information about homes within your search parameters and set them in a way that shows you exactly what you're looking for. When you do find a home, getting in the door to see it requires the lockbox code and a showing time. While a homeowner could grant you access, it's not likely they'll appreciate interacting directly with a buyer unless they're selling it themselves. It's also unlikely they'll grant you access when they're not home so your showing time options will be severely limited. Once you determine the home you're excited to purchase, your Realtor will put in a formal offer. This paperwork is legally specific so that later, no one can come back and argue the initial offer. The seller can, of course, counter your offer, at which point your Realtor will help you negotiate in a way that is legal, fair, and benefits your needs. Once you agree upon a purchase price, your real estate agent will also complete the executed contract and have it signed by all parties. This starts the 10-day inspection period. Your real estate agent will help you to choose an inspector (if you don't already have one) and should put you in touch with a homeowners insurance agent to ensure your ducks are in a row prior to closing. You'll also need to complete the loan application if you haven't already, and your Realtor can suggest a few lenders if you need one. This is a crucial time period and one that often times go awry if problems with the home are found. Your real estate agent will help you negotiate any repairs that you request or that are required by your homeowner's insurance. This can all be tedious and time-consuming, but your real estate agent will walk you through! The closing date is often contingent on the closing of your own home, or the financing of your new home. Your Realtor will ensure that your dates line up and that you close on time. (And this is no small feat!)
Combine all of this with contracts, addendums, and stacks of closing paperwork, and you'll see why a real estate agent is necessary to buy a home.
Why you need a real estate agent to sell a home
The first thing people bring up as an argument against having a real estate agent to help sell a home is the For Sale By Owner technique. Yes, this is a viable option for many people, especially those who have completed a For Sale By Owner sale before. Almost anyone who chooses the FSBO route knows they still must pay a real estate attorney to draft paperwork. And because the seller typically pays a commission to the buyer's real estate agent, a buyer will now be responsible for compensating their own real estate agent on the sale of the home. This can make it difficult to find buyers willing and able to buy your home. But perhaps the most difficult part of a FSBO is showing your home! You will need to communicate directly with buyers to schedule your showings and be available regularly to walk people through it. You need to be an expert in the neighborhood and recent competitive pricing of real estate in your neighborhood, and you also need to find ways of marketing your home because you will not have access to the Mulitple Listing Service used by the real estate agents of buyers to find homes that are for sale. Marketing a FSBO is not always easy! Without a real estate agent to complete paperwork, professional photography and staging, marketing, and showings, you'll be left to do it all yourself. Another option is a cash-buyer or iBuyer option. This is a cash offer on your home from a company that specializes in buying homes. The offer is typically yours within 24 hours of applying and often includes a straight-forward contract with no repairs requested. The paperwork is (legally) done for you and you never have to worry about showing your home or marketing it. Sounds too good to be true, right? Well, you know what they say... An iBuyer can purchase your home sight-unseen because an iBuyer is offering you a sales price they determine. You cannot negotiate the price and you also cannot negotiate the 7.5% service charge they including. Estimated repair costs are up to the iBuyer and could be as little as zero (but could be more) and, of course, there are title fees associated with the sale. On the sale of a $260,000 home, you might walk away with $230,000 in cash. This is great if you're in a hurry and the money isn't a factor, but that's pretty rare. A real estate agent should help you to prepare your home for sale, stage it, take professional pictures, and list it with an appropriate description in the Multiple Listing Service. Then your Realtor will help you determine showing times, hold open houses, and negotiate the terms with potential buyers. If you think you can do all of this yourself, or give up a good portion of your home's equity in exchange for not doing it, you can sell your home yourself. But we wouldn't.
I need a real estate agent
If you're looking for a real estate agent, begin by learning which agents can act as single agents and which must act as transaction brokers. We talk a lot about single agency at Round Table Realty and always encourage our clients to learn the difference. Interview a few agents and find one who is interested in your needs and has a clear understanding of the market you're in. Your agent should be extremely communicative in whatever form works best for you: phone, text, email, or otherwise. Your agent might not know the answer to every question, but should be quick in getting you the information you need to make informed decisions!