Wednesday, October 14, 2009

Need of Real Estate Agents

Real estate agents are good for one thing: helping a buyer purchase a home. There are several reasons this is true, the biggest is that their services to a buyer are FREE. If you are in the market for a home, by all means, use the services of a real estate agent.The average person is perfectly capable of selling his or her home without an agent. Of course those in the business of real estate don't want you to know that. But seriously, what do they know that you can't learn through research? Are real estate agents smarter than the rest of us? 64 percent of them lack a college degree. That's a staggering statistic for a group that displays such arrogance with regards to their "specialized" knowledge.

You may, on the other hand, find it more convenient to hire an agent to sell your home. The home selling process is time-consuming. If you want to pay someone to handle all the details, by all means, hire an agent.

Let's take a look at some of the reasons that real estate agents will give you when trying to promote their services.

1. Statistics
A wise man once said, "Statistics are like bikinis. What they reveal is suggestive, but what they conceal is vital." I just read an article, written by a Realtor in 2009, that stated this statistic, "Realtors average 13% higher sales, per home, than FSBO's." That's pretty impressive, isn't it?

It's also patently false. Oh, it was true at one time. In fact, I think this particular agent got that statistic from a 2005 report commissioned by the National Association of Realtors (NAR). Well, there's an unbiased group! Think they might have just a tiny agenda? If the truth be known, this same association's more recent studies show that FSBO's actually sell for more than homes sold by agents. "The median selling price as a percentage of the asking price was 97% for FSBO, and for agent-assisted sales was 96%." (NAR) Now, granted, 1 percent isn't a huge difference, but it more accurately reflects the current state of affairs and it's not quite as scary as the old statistic.

2. Realtors can research market value
So can butchers, bakers and candlestick makers. Researching the market value of a home is far from rocket science. If Realtors, a group made up of mainly people with no higher education, can do this research, isn't it possible that the rest of us can too? If you are really unsure of your ability to do this you can call any real estate brokerage in town; within two days you'll have a stack of FREE reports that include market research and the current market value of your home. By the way, there is no rule that says you have to hire the agent that gave you a market analysis.

3. Realtors are trained negotiators
I went to real estate school and I can tell you that there is no course for potential real estate agents that teaches them how to negotiate. Not one. There are real estate "gurus," guys and gals that have made a lot of money in real estate, that give seminars and classes to Realtors, but I've yet to see one of those that is aimed at teaching agents how to negotiate a price for a client's home. Indeed, what these gurus teach the agents is how to negotiate with YOU to give them the listing. Negotiation is a skill that one either has or doesn't. It's an individual thing.

4. Agents are available 24 hours a day
Well, that's a relief, isn't it? I mean, if that buyer wants to look at my house at 3 a.m., it sure is nice to know that agents are available to show it 24 hours a day. Seriously, most buyers have the same schedule as sellers. They are out looking at homes in the early evenings and on weekends.

5. Advertising is expensive
Actually, it isn't. 87 percent of home buyers found their homes on the internet. Internet advertising is sometimes free and mostly very inexpensive. What can get expensive is newspaper classifieds. But buyers don't use them very often. In fact less than half of them use the newspaper when shopping for a home.

The National Association of Realtors, in their most recent survey, found that Realtors advertise their listings at Realtor.com, their broker's website, the local MLS site, and their own website. None of these incur great expense on the part of the agent. There are websites that are far more effective than those that agents use, are available for the public to use, and quite inexpensive.

6. There's paperwork involved
This one implies that you're too stupid to fill out paperwork. It also implies that this is a big concern for the For-Sale-By-Owner. In reality, it isn't. The NAR survey found that the biggest concerns for FSBO's are getting the price right and "selling within the planned length of time." Paperwork was way down the list of concerns.Yes, there are disclosure requirements when you sell a home. You can purchase pre-printed disclosure forms. They require a signature. Period. As for the contracts, those too aren't that difficult to navigate.

The real estate industry is changing. The traditional business model is failing. There is a do-it-yourself mentality among consumers today and companies are being created to cater to that; companies devoted to helping the For-Sale-By-Owner. They can supply you with forms, signs, and advice. There are also highly-trained, highly-experienced real estate attorneys who will handle the contract portion of your transaction at half of what you will pay for a real estate agent's commission. There are money-saving options for home sellers today; information out there for you that can empower you to sell your home without an agent. A few hour's research can end up saving you thousands of dollars.

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