Many buyers sometimes try to “go it alone” in looking to buy a house. And while one can certainly do that, buying a house without a real estate agent can be a challenging and potentially risky endeavor.
Homeowners wishing to sell their house are also tempted to do it themselves. This “For Sale by Owner” approach means that the homeowner is attempting to sell their property without the assistance of a real estate agent because of the appeal for potential cost savings on agent commissions.
In either scenario, it’s generally not a good idea to forfeit the opportunity for professional advice.
What it means
Generally speaking, there are two types of agents involved in a real estate purchase and sale. The listing agent, the agent actually listing the property for sale on behalf of the owner, and the buying agent, the agent that shows the buyer properties for purchase.
While there can be exceptions, both agents are paid from the commission paid by the owner/seller to the listing agent. This commission is split between the listing agent with the buying agent receiving a “coop fee” from the listing agent at closing.
Buyers rarely pay any commission to their agent. The buying agent, then, works for the buyer but gets paid out of the listing agent’s commission. But if a buyers without an agent, the listing agent may still receive the full commission, leaving the buyer without independent professional representation.
Aside from the commission angle, there are many reasons buyers and sellers should use a real estate professional to represent their respective interests.
Real estate agents have extensive knowledge and experience in the housing market. They can provide valuable insights into local market conditions, recent sales data, pricing trends and neighborhood information. Without this knowledge, you may struggle to accurately assess the value of a property, negotiate a fair price or identify potential issues that could affect the property’s desirability or resale value.
Also, buying or selling a house involves a multitude of legal documents and complex procedures. Real estate agents are familiar with these documents and can help ensure that all the necessary paperwork is completed accurately and in compliance with local laws and regulations.
They can also guide you through the negotiation process, handle contingencies and protect your interests during the transaction.
Real estate agents are skilled negotiators who can represent your best interests and work to get you the best deal possible. They have experience navigating counteroffers and leveraging market conditions to your advantage. Without an agent, you may find it challenging to negotiate effectively, potentially resulting in overpaying for a property or missing out on favorable terms.
For sellers, it’s probably more critical to engage a real estate agent.
One of the primary benefits of hiring a real estate agent is their extensive network and access to various marketing channels. They have the expertise to market your property effectively and reach a wide range of potential buyers.
When selling FSBO, you might struggle to generate enough exposure, resulting in fewer inquiries and potentially lower offers.
Industry studies show that real estate agent assisted sales generate an average 5.5%-6% higher sales price and close 30% faster than non-listings.
And negotiating with potential buyers can be a complex process, requiring effective communication skills and an understanding of market dynamics. Real estate agents act as intermediaries, representing your interests and negotiating on your behalf.
They have experience dealing with different types of buyers and are better equipped to secure favorable terms and the highest possible price. And then there’s the intangible aspect. Selling a home can be an emotional process, particularly if you have lived in the property for a long time or have personal attachments.
Emotions can cloud judgment and impact decision-making, potentially leading to suboptimal outcomes. Real estate agents provide sellers with an objective perspective and help you make rational decisions throughout the selling process.
Look for a professional that you can work with. For buyers, real estate agents can recommend reputable lenders, home inspectors and other professionals who can assist you in various aspects of the transaction.
And while FSBO may work in certain situations, such as for experienced sellers with extensive knowledge of the real estate market, it generally presents numerous challenges for the average homeowner. Engaging a professional real estate agent can save you time, effort and potentially lead to a higher selling price and shorter marketing period.
While it is possible to buy or sell a house without a real estate agent, doing so can present numerous challenges and risks.
Having an experienced agent by your side can provide you with expertise, market knowledge, negotiation skills and peace of mind throughout the home buying process.
Gary Wisenbaker is a Realtor with Century21 Realty in Valdosta and can be reached at (912-713-2553) or gwisenbaker@C21realtyadvisors.com