Real Estate Education: Article 3 for Sellers
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11 Money-Saving Reasons to Use a Realtor
The National Association of Realtors reported that individuals selling their homes without a Realtor can get 10-20 percent less than those who hire Realtors. Breakdowns in self-selling occur because of time pressure and negotiation naïveté.
We live in a DIY world where You Tube tutorials and the deep well of Internet can teach us anything we wish to learn, including how to sell real estate. Have you ever cut your own hair to save money or time? Usually this ends up in an urgently needed appointment with a hair salon, and costing you money you didn’t expect to part with. The temptation to save money can lead to impulsive decisions that end up costing you far more than the average real estate agent commission.
Selling your own home without a professional Realtor by your side might sound like a cinch, and hold the promise of money-saving potential. If this were the case, Realtors would go out of business in a flash and become extinct.
I think it is a normal part of the home selling process to consider sallying forth without a professional real estate agent by your side. But the likelihood of putting more money in your pocket at the closing is low. This real estate article will focus on the different perspectives involved, and will highlight the reasons a Realtor is good and essential thing to have.
My career as a Realtor, and the way I approach business is based on trust, relationship and education. Once there is a connection, trust evolves because of actions, integrity, honesty and openness. I think that, in the past, Realtors as a professional group, sold ourselves short by not openly describing every skill set and working hour that goes into each real estate transaction. Being compared to sales representatives working on a showroom floor oversimplified a Realtor’s purpose and did a disservice to all that are intelligent, sincere and hardworking. Thankfully, those days are gone and open discussions are commonplace.
The term “FSBO” is something you will see in my Massachusetts real estate glossary, once I get to the letter “F.” This acronym stands for “For sale by owner,” and defines the group of individuals who are marketing and advertising their own homes for sale. Rather than establishing a business relationship with a professional Realtor, home owners do all the work themselves hoping to have more money in their pockets at closing.
Selling a home is a monumental life event and few people have the inclination or the time to tally up the number of hours involved in a real estate transaction from start to finish. Home sellers do recall what money left their pockets though. Making signs, printing up fliers, and listing on various Internet sites can cost hundreds of dollars per month. Add to this your hourly rate for all the time spent on Open Houses, racing home for showings, returning phone calls, keeping up with online marketing, photos etc.
Factor in the possibility that a buyer comes to you with their real estate agent. All along you have thought about the magic percentage number of a 5% commission. By using a simple math equation, you can see how much money you think you might save. Very few home sellers think to change the number ‘5’to a number ‘2.5’ If a buyer comes to your home with his or her his own agent, you might have to pay that real estate agent a commission. This means that the buyer’s Realtor will get half of the usual commission. Then you can change the equation to 2.5%.
In addition to the task of finding the audience of qualified buyers, individuals selling for themselves must navigate through all of the legal and contractual processes. Make no mistake about it, Realtors are not lawyers, but we are comfortable and familiar with the contractual processes by virtue of our training, continuing education and exposure over time.
Finally, before the list of reasons, I have a story to share. Over a year ago, the CEO of a site called BuyOwner.com, one of many websites that claim to help home owners sell their own homes, hired a Realtor to sell his own home!
An article on RealtorMag.com, the official magazine of the National Association of Realtors, reported that the his Realtor sold his condominium for $150,000 more than the original asking price.
Here are Your 11 Valuable Reasons to Hire a Realtor:
1) Going it Alone Leaves Emotions Unchecked
Inevitably, emotions find their way into the real estate transaction journey. A real estate agent is your buffer and respite from normal, raw emotions and can act as your reasoning stop point. Sometimes all we need is a little time and distance to consider all of our options by appealing to our logical minds.
When home buyers are close to making an offer, they naturally need to weigh the pros and cons of the property. Understandably, if we hear some of these comments about our living space, we can take them personally. If this happens, the emotional brain activates and it becomes hard to put a positive spin on any negative feedback.
Whether we are responding to a buyer’s offer, a home inspection, disinterest expressed by previously excited home buyers, or a last minute title glitch, a professional Realtor can communicate your thoughts and follow up in a calm and clear manner.
2) Brainstorming in a Bubble
A professional Realtor has been through the brainstorming process so many times that it becomes second nature to look at the positive and negative. Hearing criticism from your attuned Realtor, delivered with respect and sensitivity, will allow you to make decisions based on information, rather than just opinion. A new set of eyes and someone generating fresh ideas can be a valuable resource.
Agents are experts in what makes homes sell. They can walk through your home suggest changes you need to make to attract buyers and get the best offers. They can see flaws that you might not see, and help you filter through the feedback you receive early on, and whether or not to make changes to improve its chances of selling.
Not every real estate agent has the eye of an interior decorator, but they do have access to professional stagers, cleaning services and landscape service.
3) How to Keep Your Schedule Sane
The time involved assessing, listing, marketing and showing your home to good, qualified buyers is only the beginning. As a home seller, you more than likely have a job, or other time commitments that are very important to you. The top South Shore Realtors are full-time real estate professionals whose experience, availability and knowledge are based on thousands and thousands of hours in the field. It is our job to provide all of the services that go along with a home sale.
Imagine yourself getting a call about your home while you are focused on a project deadline at work. Most people cannot drop everything, leave the workplace, battle traffic, show their home, and expect to also keep their job.
You might think, “There is always the end of the word day.” It is 6 pm and you are tired, hungry and looking forward to a glass of wine and some television. Not if you are selling your own home! You have to use every free minute and more to market your home, follow up with potential lookers and tend to any interest.
How will you manage signage? This might seem like one simple chore. Signs are often damaged in the weather, snowplows, or otherwise. They need to be installed properly and safely with a deep hole that is snug enough to prevent accidents. Open Houses require numerous signs placed at strategic intersections, no matter what the weather, and then they need to be picked up!
Weekends with friends, doing yard work, cooking meals, grocery shopping, movies and time away are how we all balance our lives. As a home seller you will have open houses on the weekends. During the week you will strategize exposing the date, time and address of your open house, and whether or not to invest in professional signs and balloons, or to simply staple gun announcements where allowed. In the months before this, you will have scoped out every Stop and Shop community bulletin board, library board, and small town convenience store to display your pre-printed materials about your home. Your schedule will not belong to you.
4) With a Little Help From Your Friends
Your Realtor will consistently funnel information about your listed home into their network of thousands of other real estate agents so that they will show it to their qualified buyers. He or she also invites other Realtors to see your home on the day when only real estate agents tour houses. Your Realtor makes sure that print ads are published, and that your MLS listing synchronizes to the big real estate sites like Zillow and Realtor.com.
Even with your large personal or professional network, information about your house for sale is not likely to spread. The largest pool of legitimate, financially pre-approved, active home buyers are working with real estate agents. A Realtor keeps a database of their own contacts to quickly spread the word about the property they just listed.
When you try to sell your own home, it is natural that curiosity dwindles. The fewer buyers you reach in your small audience translates to less demand for your home. This usually results in a longer time trying to sell your home and quite possibly a lower price. Between social media, online real estate platforms, emails, and newsletters, Realtors full-time job is to keep momentum and interest growing.
5) How to Guarantee Buyers Are Pre-Qualified
A real estate agent knows whether interested buyers are financially qualified to buy your house or not. Think about how many curious neighbors and dreamers go on the home search, when really, they have no intention whatsoever of moving. Some people think nothing of stopping by for a cookie and poking around a house. For them it is entertainment.
Realtors are trained to ask qualifying questions about a home buyer’s financial qualifications and then make determinations of their eligibility. Some buyers even come prepared with a pre-qualification letter from a mortgage lender. The importance of getting a clear picture of a potential buyer’s needs and parameters is greatly underestimated. Most people do not have the training and learned skills to gather this kind of information.
6) Qualified Home Buyers Like to Dream Out Loud
When looking for a house to buy, people like to imagine living in a home that they like. When a home owner is right there, most people are inhibited and won’t allow themselves the freedom to dream out loud. When a Realtor is there, he or she can often encourage this kind of thinking to the point where the potential buyers fall in love with your home. Additionally, buyers will rush out if they feel uncomfortable, and your home will not even be a memory.
7) How Easy Access to Information Makes for Savvy Buyers
Buyers are well aware that the typical real estate agent commission is 6%. It is common practice for buyers to offer a seller with no real estate agent 6% less than they would if your home was listed with a Realtor. This is a strong argument since the duplicate house two blocks away was listed with an agent before it sold last week. Why should the seller get more money for their home?
8) The Art of Negotiation
A negotiation is a discussion between two people that is intended to result in some type of agreement. We negotiate all day long. Living on a busy street and trying to take a left turn out of a driveway is fraught with non-verbal negotiation. If you misunderstand the other driver’s behaviors, it could end badly.
The same is true for real estate negotiations, but fortunately using words is a much clearer method of expressing proposed terms of an agreement. An even greater fortune is that when you list your home with a Realtor, they represent you through the process, while negotiating with another Realtor.
Some people thrive when negotiating and some people avoid it. For other it becomes about winning no matter what, or holding on to some principal. These are less than ideal conditions to settle the terms of a house sale.
Once in the throes of the final discussion, emotions can get the best of anyone. With heated emotions comes fear, and with fear comes rigidity. Negotiations should always be polite and cooperative. These always fare better than arguments.
The paths to misunderstanding a negotiation are many Having a trusted Realtor between you and the interested buyer is good assurance that many of these paths will be avoided. This is accomplished by using clear communication within a trusted relationship.
After a long road towards the end goal of a home sale, emotions can come close to the surface. Negotiating a sale is not a personal process, however, it can certainly seem so. Your Realtor is there to be a clear, calm communicator who listens to your concerns with authenticity, but relays information back to the buyer through their real estate agent in a logical manner.
An experienced real estate agent has been down the path of negotiation many times and does not get ruffled by the process. My job is to deliver communications in a clear, polite way so that you can sell your home for the best possible price. Ultimately, accepting a sales price is your decision, and that decision is best made in the company of someone with experience on a professional level who will help you stay focused on the end goal.
9) Access to the Powerful Multiple Listing Service Database
People selling their own homes cannot access their local Multiple Listing Service, or MLS. Only licensed real estate brokers and salespeople have access to the most powerful real estate marketing tool in existence. The MLS is the huge network database of homes that have sold and that are on the market. Realtors worldwide can tap into this close-sourced powerhouse of networking.
Property owners have been sharing information about real property for sale since the earliest recorded real estate transactions, and compensation for leads was, and still is a normal ethic. Fast forward to 1996 and the first property information from MLS made its way onto the Internet. Fast forward again to a more open-sourced MLS that still restricts its use to appropriately licensed real estate brokers and their agents.
Protection is part of the package when you list your home with a Realtor. Contracts used to negotiate offers, agree to terms and complete a home sale have all been drafted and reviewed by real estate attorneys. This ensures that your state’s contractual requirements are met. Additionally, real estate agents have all been educated about their state’s particular, contractual requirements.
If contractual errors do occur, the real estate broker is ultimately responsible since all brokers carry insurance policies that provide for settlement of such issues. Realtors have something called errors-and-omissions insurance. If a buyer finds a problem after purchasing a property, they will come to the Realtor with the complaint. The insurance policy offers some recourse so that the buyer may not need to pursue the seller for damages.
With the reams of paperwork involved in the sale of a property, it is too easy to miss things. Hiring an attorney to protect your best interests could be far more expensive than hiring a Realtor. If you, as the home seller, inadvertently left something out of your seller’s disclosure (the document used to disclose any facts about your home that might affect its value or desirability) you could be held liable and then your legal fees will far surpass a real estate agent’s commission.
11) How to Have Your Home Seen by a Countless Number of Realtors
When your property is not in our Multiple Listing Service, people working in the real estate field will not know it is there, and on the market. Thousands of Realtors who schedule home showings and sell houses every day will not see your home on their shelf of active listings. Additionally, buyer’s agents (see my Real Estate Glossary of terms for the definition) are less likely to show a home, even if they know about it, when it lacks the professional protection and knowledge on the seller’s end of the transaction.
Selling your home will likely be one of the biggest transactions of your life. You can try to do it alone to save money, but as you can see, the advantages of hiring an agent cover all the bases. Having a Realtor list your home for sale is more likely to increase the money in your pocket when compared to selling your own home.
Thank your for reading and feel free to give me feedback for future articles. Alice Pierce
As always you can feel free to contact me with questions about real estate, selling your home or looking at houses to buy. I am always available for calls or text messages on my cell phone at 781-724-7622, and you can also email me at email@example.com