Allison was looking to buy a condo. She found one that she really wanted. The seller would provide owner financing. He said she could get the best deal if she did not use a real estate agent. Allison really wanted it and they signed a contract. She completed the down payment, and closed on the condo. Everything was going well. But about 2 years later she was notified of a lay off from her job. Allison immediately made the seller aware of the situation. Then was absolutely shocked when he said she could lose the condo to him once her payments reached 30 days behind. What Allison did not realize is that the contract she signed to purchase the condo was a land contract which does not transfer legal title to her until the full sale price amount is paid.
Marc and June were looking for a bigger and saw one June really wanted. However they need to sell their current home first. They made a decision to not use a realtor. After 3 months their house was still up for sale with no offers. The totals of the cost from newspaper ads, and keeping the house up on a very popular home website was really starting to add up. Also adding to this, they were taking a hit in their pay every time one of them had to leave work, to show the home. Then the house June wanted was sold. That really discouraged her. She did not want to keep trying to sell, and would cut the lost. They took the house off everything. They may try to sell again later.
Scenarios like these happen all the time each year in the US These stories are the reason for this article. The objective of this information is to give an overview of the many advantages and benefits of using a real estate professional when buying, or selling a home.
Right from the start … it would be dishonest if we did not say that lots of people do successfully buy a home, or sell their home without a real estate agent. However the statistics are pretty clear that the overwhelming majority is not successful. Added to this, feedback statistics indicate people really regret not being represented by a realtor.
In the case of Allison … the bottom line is any brand new agent, just out of real estate school, would have immediately seen this was a land contract. There is nothing illegal about it, and it gives the buyer all of the rights of ownership except the most important one which is legal title. And a realtor would have quickly notice the extremely severe late payment penalty. Any agent would have cautioned Allison, of not begged Allison, to really think about whether or not this would be a good deal for her.
In Marc and June's case … they would not have spent a cent on advertising. They would not have needed to take time away from work. They would not have to deal with showing the home. And though no one can make absolute guarantees, they would have had a way better chance of quickly selling their home. They would have gotten that house June wanted.
Selling, or buying, a house is an extremely big money investment. It is ranked as one of the largest events in life. The experience, knowledge, and expertise of a real estate agent are a valuable asset.
FOR HOME BUYERS: A significant reason why many avoid realtors is that most sales related jobs have negative stereotypes. From car salesmen, to insurance sales, to the lady behind the fragrance counter in a department store. Many sales men & women are thought of as rude, pushy, overbearing, untruthful, will pressure you, will say anything to get a commission, etc.
But realtors are not just salespeople. They are independent agents, working for the home buyer, acting on their behalf as their representative providing assistance with the home purchase. Real estate agents do not sell the home. The home owner is the person selling it.
Real estate agents are advocates, consultants, representatives, advisers, mediators, social workers, guidance counselors, credit repair specialist, or anything that a home buyer needs to accomplish their goal of owning a home. The real estate agent will literally take you by the hand, and lead you from beginning, to closing, if necessary.
These are just a few of the benefits of using a real estate agent when buying a home:
* MARKET KNOWLEDGE: Realtors will answer all questions about the current market, prices, interest rates and other home buying concerns. The agent can also refer you to other specialists who are necessary, including a home inspector or a lender
* AVAILABLE HOMES: Agents use the Real Estate Information Network (REIN) also still known as the MLS. It is a database that contains every single house listed for sale. It is still the source for the most current and reliable information on listed homes. All the other popular home websites is either directly, or indirectly, receiving their data from this source. Internet searches, open houses, and newspaper ads just will not have all of the homes that are for sale.
* FINANCING THE HOME: There has to be a plan on out how are you going to pay for the house! The realtor helps you determine what you can afford. A real estate agent can advise you on home loan programs, and sources for down payments you otherwise could not have known about. And educate on how to qualify for purchasing a home. Realtors can recommend home mortgage companies or banks, and work with loan companies on your behalf through the entire process.
* VIEWING HOMES: Real estate professionals have the expertise to assist you in narrowing your home search. Seeking only on the homes that match your features, interest, and price range. This can be an invaluable time saver by eliminated homes that do not meet your criteria. The realtor is the source of important information about the home and the neighborhood itself: how long the home has been for sale, the school system, and the home's best features and so on. Rather than going through properties of all types, your agent can help you focus on the homes that match what you are specifically looking for.
* CONTRACTS & NEGOTIATIONS: You and the realtor have been working together and you found the home you want … now what? Your realtor will now help you in making a written offer of purchase. They will explain each paragraph in the offer to you. Nest they will present your offer to the seller, and negotiate as your advocate. They help you determine exactly what to offer, not only the amount but also in other important factors. Such as contingencies, various inspections, appliances, seller's assistance with required closing costs, and other very important issues.
* FINANLIZING THE SALE: After everyone agrees to the contract and it is accepted, there is still a lot of work to do. Your agent continues to help you through this process. The realtor makes sure the necessary steps are taken, such as finalizing the loan, appraisals, home inspections, moisture inspections, termite inspections, performing a title search, final walk through, deed preparation, closing, etc
FOR HOME SELLERS: When it comes to home sellers the reasons why avoid realtors is fairly simple. They believe they will benefit from not having to pay the commission.
However there is also the simple reality that every seller has a target, or a net amount, they want to reach on the sale of their home and leave closing with. An experienced real estate agent can show how you can achieve this goal, and, leave from the closing with your net amount, even with the commission calculated in.
If you have a consultation with a realtor who then shows you how you can accomplish your goal … would it not make sense to use them?
Every year in the country, over 80% of all homes are sold with the assistance of a real estate professional. Even people that start out trying to sell on their own ever turn to a real estate professional. They learn that they need the realtor's knowledge, experience, and expertise.
These are just some of the benefits of using a real estate agent when selling a home:
* PRICING: On the free consultation meeting, the first thing a realtor does is to present a competitive market analysis (CMA). The CMA is based on recent homes that have sold in your area that are similar to your home, and current market trends. A CMA is completed with data which only a realtor, or appraiser, have access to. This is the basis for the correct recommended asking price. The correct price right is critical in home sales. A too high price will drive buyers away. Your property will then sit unsold. In addition, when it comes to price, the statistics are clear that sellers who list with a realtor receive on average 20% more for their homes than for sale by owners.
* NIEGHBORHOOD KNOWLEDGE: Regardless of all the daily headlines, and national news that you hear, real estate is a very much a local business. Perspective buyers will know your local housing market, especially if they are working with a realtor. Which means it is important that you also know your local residential market. A realtor that lives, and works, in your area will know your local market. Real estate agents always have access to the most current data, for each neighborhood. These are the things buyer's care about: property taxes, schools, zoning laws, demographics, proposed projects which may affect your neighborhood, noise levels, shopping, environmental factors, and more. For the home seller, these things are equally significant, because they will affect value, and the marketability, of your home. It is part of what the real estate professional will assist you with.
* MARKETING: Today selling a home will simply take more than putting a For Sale sign in the front yard and taking out an ad in the newspaper. In addition to the CMA, the real estate agent will present sellers with a marketing and advertising plan. It will describe step-by-step what they will do to sell your home. It is important to point out here that marketing and advertising expenses can quickly add up. Depending on the advertising plan, and the home, the totals could easily add up the hundred and thousands. But it is the real estate company that pays this expense when you list with them. Even if the home does not sell, or you need to remove the home from the market, you still will not be liable for any advertising cost. The realtor's advertising plan can include coordinating open houses, or writing and placing ads in various media. This could be print, TV advertising, radio commercials, internet websites, distributing brochures, and more. And of course, there is presenting your house to possible buyers.
* MLS and REALTOR CONTACTS: Despite the fact that here have been an explosion of numerous homes websites out there, the Multiple Listing Service (MLS), also known as Real Estate Information Network (REIN) still is the ultimate source for accurate and current information On every listed home that is currently for sale. Actually, all of those websites obtain their data either directly, or indirectly, from the MLS. Real estate professionals are the only ones that have access to the MLS. This is also the method used to advertise to other real estate agents who have buyer clients. The moment a home is listed, the information about it can be accessed by all the agents in the area and matched to their buyers. There is a viral effect which means that your home is not just being promoted by your realtor … your home is being seen by every real estate agent in that MLS network. Your realtor may also conduct an open house just for other real estate agents. Then, these realtors recommend your home to their buyers. Studies by the National Association of REALTORS documents that 82% of homes are sold through an agent's contacts.
* EFFICIENCY: Time is a very valuable commodity. Real estate agent does not waste precious time showing your house to just anyone who responds to the ad. Any perspective Buyers are screened to ensure they are actually capable of buying your home. Realtors weed out, and eliminate, those are not in a position to purchase your home and would clearly be a waste of time. The other agents in the MLS network working with their buyers will also benefit the seller also, by only showing the house to qualified buyers.
* NEGOTIATIONS: Locating a buyer is only the end of the marketing phase. Now the process advances to the next phase where the seller and the buyer must agree to price, terms, and many contingencies. The realtor will help you draft the written contracts and counter offers. They know the additional legal documents that may be required in your state. Your agent can also advise you on what stipulations you should make in the contract – items that should remain in the house at closing, for example.
* ONGOING ASSISTANCE UNTIL CLOSING: It also does not end after a contract is signed. Once an offer has been accepted everything progresses to another phase, here the buyer's financing will need to be finalized. The real estate agent coordinates the home inspection, assessment, moisture inspections, termite inspections, a title search, a real estate lawyer, preparation of the deed, as well as ensures that all repairs and stipulations in the contract are complete. Also each individual mortgage company or other lending institution may require a variety of different things before they give final loan approval to a buyer.
After all been scheduled, coordinated, and completed, the day of closing finally arrives. The real estate agent then makes sure that is accomplished correctly. You will only have to review the documents and sign the deed. It is not even a requirement for you to be at closing.
This article was an overview of the many benefits to having a realtor represent you. We hope this information has been a benefit to you, and has answered some questions.
As stated earlier … there is much more to selling a home then putting a sign in the yard and running a newspaper ad. And … there is much more to buying a home then internet searches and riding around looking for For Sale signs.
Real estate agents do exist for a reason. A home transaction involve one of the largest financial investments most people will ever make in their lives. And the consequences, if not done correctly, can last a lifetime.
If the commission really is the issue. Then you show know that the majority of home sellers are able to accomplish their financial goals even with the commission computed in numbers. And, in the overwhelming majority of home purchases, the commission does not come from the buyer. This means there really is no reason for a home buyer to not use a real estate agent. Especially the first time home buyer.
Everyday, Realtors helps buyers and sellers, save time, prevent problems, and avoid the mistakes that could cost thousands.
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by Greg Ford