Wondering why use a real estate agent when you can do it all by yourself? Surely going the For Sale by Owner (FSBO) route can save you a lot of time and money, right? You can maximize profits by not having to pay a real estate agent commission, and there’s little doubt that selling your home on your own schedule will be easier. Once you get to thinking about it, it may seem that a real estate agent offers fewer benefits than we’ve been led to believe.
You might have been able to see the merit in the question of “why use a real estate agent” before the internet was invented; but nowadays? The world is at your fingertips! You have access to every potential home buyer instead of just the ones your agent knows. In no time, you’ll be rolling in dough thanks to your shrewdness and skills, right? While this fantasy is certainly a pleasant one, it’s just that: a fantasy.
While FSBO may seem like a good idea, we have a number of reasons to give to those wondering why use a real estate agent when selling or buying your home. Sticking with DIY for things like small home repairs and crocheting Christmas gifts is best; leave the real estate game to the professionals. So, why should you use a real estate agent? What benefits do they offer that make using one such a great idea? Let’s take a look.
No matter what field you look at, skill is something that only comes with time and experience. One of the best benefits of hiring a real estate agent is their experiential advantage that has developed over the course of their career. Doesn’t matter if this is not your first rodeo: the number of real estate transactions you do in your lifetime, good agents do within a month.
As is the case with many other professions and skills, many of the ins and outs of real estate can only be learned with time and experience. Lessons taught by making mistakes and taking hard knocks are quite unpleasant; so why not let someone who has already learned these lessons do the work for you?
Price the home correctly
One of the most common mistakes among amateur home sellers doing a For Sale By Owner (FSBO) is pricing their property incorrectly. They either price it too high or too low, resulting in suboptimal market performance for their listing. Pricing it above its true fair market value resulting in a stale listing, and pricing it below will mean that you will lose money.
An experienced agent will know the current market and can price you high enough for wiggle room without discouraging potential home buyers. This tenuous balancing act is one that takes a great deal of finesse and experience to pull off properly, and there’s a good chance you simply don’t have what it takes. If you want to get the most out of your home sale, then take advantage of this salient benefit real estate agents can provide!
Time is money
Let's not forget the saying “time is money”; in real estate this is almost literal. If you’re too slow to sell your home, the market can change its course and become beholden to lower median home prices. An experienced real estate agent knows how to forecast big changes and hold or push the negotiations so you can both get the most out of the sale.
Additionally, do you think you have the time to stop your life and live the life of a real estate agent and learn all the tricks they’ve mastered throughout the course of their career? If you’re lucky, this might only take 6 months, but would likely take longer. You can’t do this in your off-work hours, believe us. Having someone taking care of everything while you continue your life is a big factor those asking themselves why use a real estate agent should consider.
Negotiate with a strong standing
Selling your home is a major business transaction, and there are three stages at which you can expect negotiation and pushback. At each step, you’re likely to be left twiddling your thumbs, completely unsure of what to do. An experienced real estate agent, however, will know exactly which cards to play at which times. Negotiation is an art, and real estate agents are artists.
- The initial offer may be lower than what you would’ve expected. A real estate agent will be able to spot the difference between a low-ball and a legitimate offer, but you likely will not be able to. Many first- or second-time home sellers give up after they reject what turns out to be a legitimate offer, and end up missing out on better offers further down the road.
- The counteroffer must be done shrewdly. This isn’t the time to give your absolute rock bottom price; you need to reel them in with a counter offer that’s well above their initial offer. This back and forth should evoke images of a fisherman and his catch, with each party doing their best to get as favorable an outcome for themselves as possible.
- The post-offer period includes the work of a home inspector, which is much more affordable when assigned by a real estate agent. Because inspectors can cut a real estate agent a special deal if they do several inspections instead of just one, you’ll be able to secure a number of concessions and price advantages by hiring a professional.
You need a skilled and objective negotiator on your side during these discussions, and an agent can play the “bad cop” for you to keep everything on your end pleasant and enjoyable. The reduction of stress alone is one of the top 5 benefits of hiring a real estate agent, if you ask us!
Superior exposure benefits
You want the absolute maximum exposure possible for your home, right? That’s how you get a sale; showing the property to the maximum number of people you can access. Doing that increases your chances of finding one that’s going to buy. And that’s a big reason why one should use a real estate agent.
An agent has the networking skills and contacts to get this job done, as well as the time and motivation to prepare marketing materials that appeal to the audience that’s most likely to buy your specific home – there’s no use trying to sell someone on the fascinating trend of tiny homes when they are luxury real estate owners, right? – host open houses, reach out to other agents who may have interested parties and many more time-consuming things agents normally do.
The dollars you expect to save on commissions aren’t really all that many when you consider the average cost of a home and the 3% commission compared to the selling price. An experienced real estate agent brings to tabel the benefits of expertise in pricing, negotiating skills, and market access; skills a homeowner simply can’t hope to match. In fact, statistically For Sale By Owner (FSBO) homes stay on the market longer (costing owners more every month they linger) and eventually sell for less overall and almost never for asking price in the end.
Maybe you’re worrying too much about this because you have an impression that the agent is making a lot of money on your expense. But that’s not true: you’re the one who’s making money because of him/her. Let’s take a look at a scenario for you to see how much a real estate agent actually makes.
If you sell your $150,000 home for $140,000 and save the $4,500 commission, you’ve actually lost a potential $5,500 at least! Why use a real estate agent? An experienced one might have been able to get potential home buyers bidding against each other and sold your home for $160,000, taking home $4,800 in commission and netting you a tidy $9,520 in extra profit!
With these arguments in mind, we think it’s clear to see why hiring a real estate agent is such a good idea. In addition to helping you secure a greater overall profit from the sale of your home, it will also reduce the amount of stress you have to deal with and make sure that everything goes smoothly. There’s a reason why real estate agents haven’t been negatively affected by the arrival of the digital age!