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Do I Really Need a Real Estate Agent?

By Laura Agadoni · Feb 11, 2016 · Real Estate

Do I Really Need a Real Estate Agent?

Image courtesy of BeSmartee, Do I Need A Realtor?

The question of whether home sellers and buyers need an agent is like cilantro: You either love it, or you think it tastes like soap. In other words, most people feel strongly about the topic.

The pro real estate camp believes that you absolutely need a real estate agent to sell a home. Otherwise, you either will never sell it, or if you somehow manage to find a buyer on your own, you won't get the right price … or you'll mess up something along the way.

The for-sale-by-owner (FSBO) camp believes that real estate agents are no better than common criminals, robbing sellers with the huge commissions they make for "doing nothing" and doing a disservice to buyers by wanting to get the deal done as quickly as possible.

Although the cilantro issue can truly be black or white, when it comes to real estate, the truth lies somewhere in the middle. Here are four considerations to help you decide whether you need a real estate agent.

1. Can you really be objective when pricing your house?

Sellers often believe that they should get what they put into the home. For example, they might have upgraded the house by putting in a brand-new (and expensive) outdoor entertainment center. It might look fantastic, and it might be the only one like it in the neighborhood. So that seller believes they should get more for the house. How much more? Well, as much as the entertainment feature cost them, right? Not so much.

If this seller upgraded the home too much for the neighborhood, they might be in for a rude awakening. They might get slightly more for the house, but probably not as much as they would like to get. Here's some advice from This Old House: "Just because a project is expensive doesn't mean it will pay back more."

In this scenario, a real estate agent, by providing an objective opinion, will set a more reasonable price to actually get your home sold. There's an art to pricing a home. If you price it too high, it will likely sit for a while. If that happens, people will start to wonder what's wrong with it. If you price it too low, you'll cheat yourself.

If you, however, know how to study the real estate market in your area, and you perhaps hire an appraiser to help guide you on how to price your home, you have a good chance of getting a good deal for yourself without using an agent.

2. Do you know how to market your home, and do you have the time to do so?

Unless you really know how to take photographs of your home that showcase it in the best possible way (this does not include a photo with a mirror image reflection of you taking the shot), leave this to a professional.

A real estate agent should know how to get your home professionally staged and photographed, and might even make a video or a 3D walk-through (similar to Google Street View) for you. But then again, you could do these things on your own. What's important is not to scrimp. The quality of the photo or video in the listing can mean the difference between attracting potential buyers or not.

This is a good video that shows the inside of a home for sale. Upbeat music, clear video, and smooth panning.

You then need to list your home. Make sure your house for sale appears on Zillow, Trulia, Realtor.com, Craigslist, eBay Classifieds, social media, and any other place you can think of. Also, put a "for sale" sign in the yard, and be prepared to hold open houses.

If nothing seems to work, you might then wish to hire an agent. They can typically market to a large pool of buyers, maybe more than you could do on your own. Plus, using an agent for this task will save you a lot of time.

3. If you'll use an agent, make sure it's the right one

One of the big beefs home sellers and buyers have about real estate agents is that they don't do a good job. The reason is that some real estate agents aren't very good, or at least they aren't familiar with your type of home or the area. Maybe they're inexperienced, only do this part-time, or are too busy to give you much time. If you want to use a real estate agent, there are ways to help ensure you pick the right one for your needs.

Sellers:

  • Interview prospective agents, and ask them to show you what they've listed and sold recently. Then ask for the contact information of their clients so that you can call a couple of them.
  • Choose an agent who works in your geographic area and who has a market presence there.
  • Select an agent who specializes in the type of home you're selling: single-family, condo, short sale, luxury home, etc.
  • Ask how long the agent has been in business. Choose one who has at least five years of experience.

Buyers:

  • Find out what the agent's specialization is. For example, if you want to buy an investment property, you probably shouldn't hire an agent who has sold only residential homes. Or if you are a first-time buyer who wants a starter home, you probably don't want an agent who specializes in luxury homes.
  • Discuss how often the agent will send you new listings and how often you'll be able to view new homes for sale.
  • Find out whether you'll really be working with the agent you're interviewing. If the agent is a high-profile one, you might actually be working with someone else from their agency. This might be acceptable to you, and that's fine. But there should be no surprises.

4. If you're a buyer, you have nothing to lose

The seller pays the real estate agent commission, so if you're a buyer, you have nothing to lose by using an agent. You can still search for homes on your own, but you'll also have an agent who can suggest houses for you based on your parameters. They will set up appointments for you to see homes, let you in, and they'll drive you to the appointments.

When it comes time to negotiate, however, you and your agent might have different goals. For example, if you want to play hardball, trying to get the house for as little as possible, and you aren't afraid to walk from the deal, stick with your strategy. Your agent might try to talk you out of that strategy, because if you do walk, it means more work for the agent. That's a sign of a bad agent. So keep this in mind when you put in an offer. Don't spend more that you planned on spending, and don't feel rushed to put in an offer.

Bottom Line

There is no one answer as to whether you should or should not ever use a real estate agent. It depends on many factors, such as how much time you can devote to selling a home on your own and how much knowledge you have of the real estate field. Even if you do use an agent to sell your home or to help you buy a home, you don't need to hand over all the control. You can still drive the process, using the agent to list, show, and market the home and to do all the paperwork involved.


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