This subject is much contemplated, by both buyers and sellers. I’d love to get into that, but I want to be upfront that I’m a realtor, so my perspective will be somewhat biased.
If you are buying a new home, I will always, ALWAYS recommend using a realtor. First of all, and this is probably your most important reason, you are not paying for any of the services provided. That’s because the broker on both sides of the transaction is paid by the seller as part of their Listing Fee.
However, regardless of economic reasons, realtors will have access to every property for sale listed on Multiple Listing Services (MLS) for your area. Simply by providing a few details about what you’re looking for and where, a realtor can literally provide hundreds of homes for you to review (depending on how specific your parameters are). That gives you the opportunity to review listings from the comfort of your home and weed out any properties that don’t suit your needs. If any questions are asked during your research, your realtor will be the one to track down the answers for you.
Once you’ve narrowed down your options and have chosen the properties you really want to visit, working with a realtor is key. Most sellers who list their homes do so to ensure that their home is shown to a “real” buyer accompanied by a licensed real estate professional. For convenience, most places provide lock boxes or Sentrilock boxes for secure access to the home. Obtaining a lockbox code is impossible unless you are a licensed realtor. A home being sold by its owner (FSBO) is a different matter and I will get to that later in this post.
The buying process includes a number of steps that a broker can not only facilitate, but speed up. Once the buyer has decided on the property, the realtor can prepare your bidding documents (contract, additions, disclosures, etc.) for your signature and present them to the seller. Once your offer has been accepted, your realtor can guide you through the process leading to successful escrow closing. This will include a home inspection, attorney’s review of your contract and processing of your mortgage financing. If the buyer does not have access to an attorney, lender or home inspector, the realtor will be able to provide a reference for those services.
Your realtor can also provide significant assistance in the negotiation process. They know the current market and can tell you if the price for the house is right. They will also be able to assess the market value of the home based on its condition or any upgrades the seller has made.
From a buyer’s point of view, it makes sense to avail professional services while you are looking for your dream home. This is especially true when you consider that you are not paying a fee for the service.
As a seller, the decision becomes a little more complicated. Many sellers find that the market value of their home is not as much as they had hoped and they have to sharpen their pencil to break even. When you consider a realtor may charge a listing fee of anywhere from 4-6%, the listing fee for selling your home, after payment of your mortgage, can make breaking even difficult to achieve.
The advantages of listing your home with a realtor are numerous. They include, but are not limited to, accurate analysis of your home’s market value, Open Houses, staging recommendations, signage, Double Listing Service inclusion and, most importantly, extensive home marketing (most important advantage).
If the home owner decides to sell his own house (FSBO or For Sale By Owner), all of these costs are borne by the seller. Obviously, marketing is becoming the most expensive item. Placing a For Sale sign in your yard and paying for a 2″ x 2″ ad in your local paper will not achieve the number of potential buyers needed to sell your home in a reasonable amount of time. The speed at which a house sells is directly proportional to the number of buyers who see the house. A realtor’s marketing campaign, if effective, can generate a consistent stream of gigs. Shows generate bids and bids lead to successful closings.
In the final analysis, a seller must look at their net results to determine the viability of the listing with the broker. Even with all the advantages listed above, if sellers had to bring money to the closing table it would weigh heavily on their decision. Being a realtor, I always recommend listing your home with one of my respected colleagues. However, I was not aware of the economic conditions many homeowners face and many people have successfully sold their homes as FSBOs.
Whatever your decision and whether you are a buyer or a seller, there will always be obstacles that you will have to overcome. If you find you can’t overcome this hurdle alone… contact your local realtor.