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Why You Should Use An Agent Rather Than Selling FSBO
So you have decided to try and sell your home For Sale By Owner? Don’t trust dealing with an agent? Not trying to give up a good portion of your hard earned equity in commission? I get it, trust me, I am in the same boat as you! I also don’t trust a lot of agents out there and feel there is always the risk of encountering a bad one.. And I completely understand not wanting to give up 6% commission when you could potentially be putting that money back into your pocket. I empathize with your frustrations and concerns, which is why I decided to write this article to help educate you on why I feel it IS a good idea to list your home with an agent rather than FSBO. Now some of you may want to stop reading after this, but give me a few minutes to explain what the good agents actually do.
There are 9 main reason why I believe you would benefit more from listing your home with a real estate agent. These reasons are oftentimes overlooked when a person has been dead set on selling their home by themselves without the help of a licensed professional. Some of the reasons you may already know and just need to be reminded of again in order to bring it back to your attention. Whatever the case may be, just hear me out and you can tell me off later if you’d like!
Reason #1: Industry Expertise. If your house is on fire, who would you call? Well I hope you would call 911 and then firefighters would come out to extinguish the fire. Now, you could be stubborn and feel as if you could put the fire out yourself, which is possible in some cases, but when it gets to out of control you will call on the experts. Firefighters have been trained to fight fires. It is what they do each and every day that they show up to work. Just like a good real estate agent shows up to work everyday to sell houses. It is what we have been training to do and what we do each and everyday. Now the house fire may be an extreme comparison, but I just want to paint the picture for you and set the tone. As a full time real estate agent I educate myself each and everyday in order to benefit my clients and provide them with expertise in the process of selling their home. If you really think about it, doesn’t it make more sense to trust a professional with the fate of one of the largest investments you will ever make in your life rather than trying to venture out on your own, without having the proper education and training to TRY and save a few bucks? I hope your answer to that question is yes and I will explain later on why I said “try and save a few bucks.” We trust teachers to teach our children, we trust doctors to heal our ailments, and we trust firefighters to put out our fires, so why not trust a licensed real estate professional to sell our homes?
Reason #2: Local Market Knowledge. We all have that one neighbor who knows everything that is going on and is involved in everyone’s business. Well a good real estate agent will be that person who knows everything that is going and and is involved in all aspects of the real estate business in your specific market and neighborhood. Real estate prices can vary widely from neighborhood to neighborhood and even from street to street if you are located in a densely populated city. This is why it is so important to work with someone who has a strong knowledge of your specific area.
Reason #3: Negotiating: “Don’t think of cost. Think of value.” The power of negotiating properly and effectively is a technique that is developed over time and through many real life negotiations. Let’s face it, some people have absolutely no idea what the heck they are doing when it comes to negotiating. On the other hand, for those who have practiced and developed this ability it becomes second nature. There are some real deal sharks out there in the real estate world and you do not want to be up against them in the negotiation room if you have never negotiated a deal before. This is an issue you will run into if you decide to sell your own home and go up against an experienced negotiator whose goal is to get the best deal for his or her client. If you think you will be able to cut out all the agents in a transaction, think again. According to the National Associations of Realtors, “88% of buyers purchased their home through a real estate agent or broker—a share that has steadily increased from 69 percent in 2001.” You could potentially be giving up a ton of your hard earned equity and not even know it! Having a quality agent represent you and negotiate on your behalf can help you save thousands of dollars in the end. So when you are deciding whether or not to use an agent and you weigh the options of paying someone 6% or not, just think of the previously mentioned words of wisdom, “Don’t think of cost. Think of value.” Consider the real value an agent can add to the sale of your home.
Reason #4: A Voice Of Reason: Not all home sales are created equally. There are so many different scenarios that can play out in each and every transaction, which is why we all need a voice of reason to help guide us on the right path. Sellers are typically emotionally attached to their homes which leads them to think emotionally instead of rationally. Just because you THINK your home is worth $200,000 doesn’t mean it is actually and currently worth $200,000 when both your neighbors, who have identical homes that are in similar condition, just sold for $150,000. This is not a situation where you believe it and it will come true. Once the emotional reactors have started to go it can be very difficult to bring yourself back down to reality without destroying the deal. Having that buffer in a transaction can be the key to keeping it alive. I can’t tell you how many times I have had clients who were furious with a situation and they were so close to calling it off, but I was able to calmly talk them down from the ledge, keep the deal together and have everyone come out happy on the other side. As I write this I am dealing with a transaction that could potentially fall apart over $2000. I am giving my client some time to think about it and cool down before making any decisions. Multiple times she has told me she wants to pull out and I have to explain to her that this is the process sometimes. Now if she was doing this by herself she may have already backed out, lost the buyer and potentially run the risk of having her property sit for another few months only to accept less money in the long run! This is the power of having someone on your side to help you and guide you through the nuisances of selling a home.
Reason #5: Unqualified Buyers. Have you ever heard of the term “tire kicker”? It is Someone who is indecisive about purchasing a product or service, and never feels satisfied with what they are offered. In the end a tire kicker may or may not buy. Sometimes I think there are more people who are “just looking” than there are actual, qualified buyers! Could you imagine going through the whole process with someone who says they can get a mortgage and 30 days later they tell you they aren’t qualified to buy your home??? Not only would you have wasted all that time, but delaying the sale can potentially hurt your listing and cause people to offer you less. I get a lot of calls off of my listings and when people tell me they are interested in buying one of my listed homes, the next question I ask them is if they are pre-approved. If they say yes, we move forward. If they are not, I offer to set them up with my lender and tell them we can schedule a showing once they have their pre-approval. I often take it a step further and call their lender just to make sure they have submitted all the necessary paperwork for their pre-approval and to make sure they are qualified. The last thing you want to do is waste your time on a tire kicker only to have them bail at the last minute.
Reason #6: Follow Up, Managing Feedback, Tracking Appointments. They say that the fortune is in the follow up! This is extremely important in the real estate world because most of our deals happen when we consistently follow up with our leads. We have designed and implemented a follow up system that helps us keep track of all the people who have visited one of our listings or expressed interest in buying a home with us. Managing feedback is something that is often overlooked. The importance of feedback is not to take it personally but to try and rectify any issues that are brought up multiple times. As a licensed real estate agent, I have access to ShowingTime which is a showing management and market stat CRM (customer relationship management) system that helps us track and manage feedback. With all the helpful tools in this one app we are able to easily and efficiently track each individual listing, without the potential of overlooking vital information. Let me paint a picture for you so you can visualize what I am saying:
So you have decided you want to sell your home without the help of an agent. You are married, have two kids, and you and your spouse each have a full time job. Each kid is in school, involved in multiple activities after school like ballet, baseball, music class, etc. and each day they need to be taken to practice. Your job is demanding and you have been really stressed out trying to make the deadline to get your boss off of your back. On top of all that you have multiple people calling and emailing you throughout the day trying to schedule appointments to see the house. You are running around like a maniac each day trying to have the house cleaned and presentable for the potential buyers. After multiple buyers have come through, their agents will call or email you with all kinds of questions, comments and feedback, but you are so preoccupied that you just can’t keep up with everything and they start falling through the cracks. Joe Home Buyer really loves the house, wants to submit an offer but has some questions beforehand. Their agent tries to reach you multiple times but you are too busy to get back to them. Meanwhile, your neighbor three houses down lists their property with an agent and Joe Home Buyer ends up putting an offer in on that house, which is accepted the next day. You just lost a buyer because you were too busy to keep up with the demand! Now this case may sound a bit extreme but this is what most families are faced with on a day to day basis, which is why it is very important to rely on a professional to follow up, manage feedback and track appointments!
Reason #7: Dealing with Inspections, Appraisals and Title Issues. The biggest headaches in any real estate transaction comes from inspections, appraisals and title issues. Let’s start with inspections. Every buyer who puts is an offer on a home that is accepted will have a full property inspection done. The inspections range from radon, termite, deed & zoning restrictions, water service, property boundaries, flood insurance and lead-based paint. Each one of these inspections can bring a whole mess of problems and situations if you are unfamiliar with the process and can be very overwhelming. At this point of the transaction agents will try to get a reduction in price or some kind of seller’s assist from you and if you are not too savvy with negotiating you can give up way more than you should.
A home appraisal is an unbiased estimate of the true (or fair market) value of what a home is worth. A certified home appraiser is hired from the buyer’s mortgage company to come out, conduct their inspection and determine the value of your property. Now an issue can arise if the appraisal is lower than the contract price. So what do you do in this situation? Will you come down from the asking price that you really wanted to get or will you contest it? However, many homeowners do not know how to contest and appraisals and they end up losing money when this situation arises? With the help of a licensed real estate agent you would know how to provide more information in order to get the appraiser to come up in their estimate. If an agent could negotiate another $10,000-$20,000 wouldn’t it be worth it to hire them? I think you know the answer to that.
When lawyers and other real estate professionals talk about "title," they are referring to who has legal ownership and the right to use a piece of property. Dealing with title issues is hands down the most annoying part of a real estate transaction. Some of the issues that you can run into are past ownership claims, liens, or covenants of record. Title problems can hold up or even ruin an otherwise good deal, so it is important to know exactly what to do in a situation like this. The average person has no idea what to do when it comes to title problems so this alone is a good reason to have an expert help you sell your home.
Reason #8: Contract Expertise. Once a buyer and a seller sign a contract they are legally bound to the terms. The average homeowner has no idea about real estate law or contracts. This was true for me before I became a licensed real estate agent as I was a homeowner with no knowledge of real estate law. When it comes to dealing with any kind of legal issues I think we can all agree that having a professional guide us along the way is the most important step we can take. As a seller, you are on the hook for any misinformation that you state or that is stated in the contract. So, why risk potentially tens of thousands of dollars in lawsuits just to try to save on paying a commission to a professional?
Reason #9: The Most Overlooked! The final, and I think most compelling, reason is the preconceived notions people have towards For Sale By Owner properties. They think that you are trying to save money, therefore you are cheap, so they will want to try and haggle you down to get the best price for them. The buyers know you are not paying a commission so they will often make a lowball offer. In most cases the buyers want to get a deal and you may end up accepting an offer below market value. So in essence you may think you are saving money but the reality is you are actually giving away equity!!
Hopefully this is enough information for you to use when debating whether or not to hire a skilled real estate agent who will guide you through the process, get you the best offer and help you walk away with the most money. That is the goal of all good real estate agents, to service their client and get them the best possible deal. So when you think about selling your next home, you should contact me so that I can help you along each and every step of the way to get the absolute best deal possible and help you save thousands while doing so!
Shawn Connors of Vanguard Realty Alliance