First of all, thank you to one of my Facebook friends who posted his opinion under my meme of the top 5 reasons to use a Real Estate Agent. My friend said the number one reason to NOT use a real estate agent is that it’s a waste of money. I’m thrilled that he brought this up because I’ve wanted to share just one of the many experiences we had last year being a Real Estate Agent and how our client benefited from hiring us to represent them in selling their property.
Before I get into the experiences we had last year let me address a few concerns my friend brought up in his argument. Here is his direct comment …..
“And the #1 reason not to use a realtor is they way overcharge you. Pay an attorney $500 to do the paperwork. The rest is a piece of cake. If you are trying to sell a home for $500k you will pay $35,000 in commissions. Really? Is it really worth 35,000 to sell the home. They need to work off of a flat fee.”
Now, I will agree that Real Estate Agents get paid a lot but typically a seller’s agent will make about 3% on a deal and the buyer’s agent will make 3% bringing the total to 6% in a transaction, usually paid by the seller but it can be negotiated. A realtor may also negotiate with the other realtor less of a commission to help make the deal work for everyone and a good realtor will know when to do this. In the example my Facebook friend sited, a home that is selling for $500,000 (which is going to have a smaller pool of buyers than the average home of $250,000-$300,000 and in this case especially I would highly recommend a realtor because you will benefit greatly by hiring an agent that is savvy and experienced in finding the perfect buyer for a higher priced home……>breath here<. #queenofrunonsentences #backtotheblog) the commission for the sellers agent will typically be about $15,000 and the same for the buyers agent unless negotiated. Now let’s just break all this down…... If you average that commission by the amount of years you will be living in the house and paying on your mortgage (which is about 7 years) then you would be paying a little over $2000 a year or under $200 a month to get the right price for your house. When you hire a knowledgeable Real Estate Agent to assist you in this process that’s not a lot of money for the expertise you should expect. That is why it is VERY important to choose your Realtor carefully so that you don’t feel like hiring them was a waste of your money.
Statistically, across the United States, a little more than 90% of Real Estate transactions are done through a Realtor. This suggests that the majority of the public has found some sort of success with working with an Agent. A good Realtor is well worth what you will pay. A good Real Estate Agent knows his market and has appraisal skills that will work to your benefit. What I mean by that is a good realtor should be able to go into a house and assess the updates that have been done or need to be done and use these points to negotiate a good price that is a win/win for both sides…. THAT in itself is worth what the commission paid on a transaction. Here is an experience we had with a client last year. We had a client contact us last year to inquire about selling their property. They told us they had a family member willing to buy it for $180,000 and they were debating whether they should just do that or hire an agent to see if they could get more out of their property. They had also contacted a different real estate agency that told them the very maximum they would be able to get out of their property was $200,000 and that their commission would be 8%. This would yield them even less than what the family member was willing to pay for the property. That is when they called us to see what we thought. After assessing the property and having them do some minor touch ups we listed the property at $230,000 and were confident with our market analysis that we could yield them the $200,000 in their pocket that they were looking for. We knew it was very important for them to get this amount as it was part of their retirement plan. The first offer we received on the house was for $200,000 and after much discussion we turned down this offer (which ironically came from the Real Estate Agency they had first contacted.) A few days later we negotiated and accepted another offer at $220,000 splitting a 5% commission between real estate agents and netted our clients the $200,000 she was looking for in the beginning, making her $20,000 more than if she had taken what the family member wanted and far more than the other real estate agency had predicted it could sell for.
There are so many more reasons I can give you for using a real estate agent but what I want to really emphasize is that you need to hire the CORRECT agent. I have been in the real estate game for over 20 years and it seems everyone has been a real estate agent at some point in their life…… but only few are dedicated to their craft…. Find THOSE agents….. Even if your brother’s wife is an agent, it takes more than just getting your license to know how to negotiate and assess a property. Make sure you interview your realtor and feel good about what they will be bringing to the table before you hire them to sell your home or assist you in buying your next home, this will make all the difference.
Hire the best, hire an expert!
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