Why use a Real Estate Agent?

Investor · Scottsdale Austin Tuktoyaktuk · Member since 2021 · 4k+ posts · 4k+ votes

3y

Hello BP!

I have a question for the group and was hoping to generate a discussion around this topic.

Disclaimer – I am an instructor pilot in the Navy and not a real estate professional – so take everything with a grain of salt.

I recently completed a real estate transaction (sold our home) and I couldn’t help but think to myself – Why am I paying our Real Estate Agent so much money? Why do they get an equity stake in this transaction? And what do they actually do to earn that stake?

**If you are a real estate agent or know a real estate agent and are offended then my sincere apologies. I am not trying to denigrate anyone’s profession. I am sure there are plenty of agents out there that work really hard and are great people. Just asking the question.**

This got me thinking. I took a serious look at the whole real estate transactional process and it left me scratching my head as to what the actual value add of the real estate agent is these days. Understandable during the days of yore when all the data was exclusively held on the MLS and you needed agents to get access to reliable information. But we don't live in that universe anymore. The majority of data is open source and we can get it by simply looking at Zillow, county websites or heaven forbid taking a trip down to the county clerk's office and actually pulling the documents. So I now have all the information I need to make informed valuation decisions at my fingertips. Why am I giving up an equity stake for someone to run the same comparative market analysis I can run to come up with roughly the same number I would?

Well maybe they are useful when it comes to contracts and negotiations. I can see the argument there. The problem with that is that I spoke with a bunch of Real Estate Attorneys that assured me they can and do perform the same services (contract negotiations, advising, etc…) and they do it for a fixed hourly rate as opposed to an equity stake. Bonus – they have a doctorate in jurisprudence.

To me it seems like the future is moving towards a more streamline process. But I am interested to hear what the far more experienced professional investors and members of the BP community think... What, if any, is your experience navigating the waters of the real estate transaction process without agents and what are your lessons learned/thoughts on the subject? And on the flip side - what are the arguments for hiring and agent and giving them an equity stake in the transaction?

Thank you for your time! And again, just asking the question. Seeking information/guidance/opinions on the subject. Not trying to upset anyone in the slightest!

I dunno, what is the value of an instructor pilot in the Navy. Trust me, I'm smiling, not to denigrate anyone but because of the naivety of the question.
NOTICE: I am NOT an agent and I've never used an agent to sell a property.

How did you know how much to ask for your property? Had you ever heard of title agents and escrow agents before selling? Did you know the difference between BPOs, Comps, ARV and appraisals? Did you know how to write up a P&SA?. Did your buyer simply pay you cash or did they need to qualify and get a loan and did you know if it would be Conventional, FHA, VA, Jumbo or USDA? If your buyer backed out would you know what to do? Do you know where the Eject button is for a home sale without getting sued? Was there any negotiating back and forth? What would you have done if your price was too high and you didn't know your roof was keeping people from making an offer to begin with?

You went to flight school to learn to fly, realtors learn what gets people sued and how to avoid that. Do you carry errors and omissions insurance? And so on.

I'm told that it's relatively easy to steer a 747, it's a little more difficult to land one. It's what you don't know that gets you in trouble as your drill instructor told you. ;-)

9 Reply

Billy Knox

OP

Member since 2019 · 17 posts · 24 votes

3y

@Account Closed Thank you so much for the feedback. I do have a question for you. As someone who is not an agent and has never used an agent you seem to be very adamant about using an agent. Why is that? Why do you choose not to use one and what do you do instead?

I think we all have the capacity to drill down and to find the answers to every one of the questions you asked and to educate ourselves about the process. Especially for something as monuments as buying or selling a home. All of that information is at our fingertips it just takes a little time and dedication! And for those that can't or do not have the time I think there is a better way to go about it than to give up an equity stake. A seasoned Real Estate Attorney would know the answers to all of those questions and more and there is no conflict of interest when it comes to advising you. They have no stake in the transaction going through so their fundamental interests are to give you the best advice possible, not close the deal no matter what.

And for the record, have you ever flown a 747?

You are welcome for my families service and sacrifice. Try and tone down the condescension next time. Thank you for your time and the thoughtful response. I'd love to hear why you don't use agents but seem to think I am naive for asking the question.

6 Reply

Theresa HarrisPro Member

Member since 2019 · 15k+ posts · 11k+ votes

3y

The majority of people wouldn't know what needs to be done when selling a home. Same reason you have someone handle the mortgage, title transfer, inspection, etc. This is the biggest transaction most people will do in their lifetime and you want to make sure everything is done right and you get the most out of it that you can. From a buyer's perspective, it is similar-you want to make sure you aren't overpaying and everything is done right.

2 Reply

Kevin Pickrell

Member since 2023 · 3 posts · 3 votes

3y

We have bought and sold several properties without agents. We just used attorneys who handled everything and it worked out great and saved a lot of money.

However, In mid-2021, we saw a nice listing on realtor that was priced a little low and had been on there for a month. Unheard of in the Raleigh area. The listing said the buyers agent would get 2.5% so the buyers agent was going to get his part. No matter.... We called up three different agents asking to see it and none of them would show us the property because the gentleman that was selling it had used one of those flat fee to get it on MLS but was not using an agent. One young agent said "I am not doing double the work and only get half the pay". I am assuming that many agents simply would not show it to clients which is why we got it for about 15k less than it should have been. We ended looking up the owner via tax records and called the owner directly and made a deal. Worked out well for us but by saving the sellers agent fee he no doubt left money on the table.

We have always had very pleasant dealings without agents involved but if I was selling a property I would probably grudgingly use an agent so other agents would show the property.

For new or inexperienced home buyers or sellers who need hand-holding through the process an agent might be beneficial.

3 Reply

Bob S.

Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes

3y

Quote from @Billy Knox:

Hello BP!

I have a question for the group and was hoping to generate a discussion around this topic.

Disclaimer – I am an instructor pilot in the Navy and not a real estate professional – so take everything with a grain of salt.

I recently completed a real estate transaction (sold our home) and I couldn’t help but think to myself – Why am I paying our Real Estate Agent so much money? Why do they get an equity stake in this transaction? And what do they actually do to earn that stake?

**If you are a real estate agent or know a real estate agent and are offended then my sincere apologies. I am not trying to denigrate anyone’s profession. I am sure there are plenty of agents out there that work really hard and are great people. Just asking the question.**

This got me thinking. I took a serious look at the whole real estate transactional process and it left me scratching my head as to what the actual value add of the real estate agent is these days. Understandable during the days of yore when all the data was exclusively held on the MLS and you needed agents to get access to reliable information. But we don't live in that universe anymore. The majority of data is open source and we can get it by simply looking at Zillow, county websites or heaven forbid taking a trip down to the county clerk's office and actually pulling the documents. So I now have all the information I need to make informed valuation decisions at my fingertips. Why am I giving up an equity stake for someone to run the same comparative market analysis I can run to come up with roughly the same number I would?

Well maybe they are useful when it comes to contracts and negotiations. I can see the argument there. The problem with that is that I spoke with a bunch of Real Estate Attorneys that assured me they can and do perform the same services (contract negotiations, advising, etc…) and they do it for a fixed hourly rate as opposed to an equity stake. Bonus – they have a doctorate in jurisprudence.

To me it seems like the future is moving towards a more streamline process. But I am interested to hear what the far more experienced professional investors and members of the BP community think... What, if any, is your experience navigating the waters of the real estate transaction process without agents and what are your lessons learned/thoughts on the subject? And on the flip side - what are the arguments for hiring and agent and giving them an equity stake in the transaction?

Thank you for your time! And again, just asking the question. Seeking information/guidance/opinions on the subject. Not trying to upset anyone in the slightest!

I have done 100s and 100s of deals never using an agent, all off market deals.

2 Reply

Billy Knox

OP

Member since 2019 · 17 posts · 24 votes

3y

@Kevin Pickrell Thank you for sharing! I get that side of things, but to me that seems like it should be almost criminal. The real estate agent is suppose to be representing the interests of their buyer so to say that they won't show them a property because the seller isn't using an agent seems like a violation of that fiduciary obligation. If they are worried about not getting paid that is a conversation they should have with their client - not the seller of the property. It just seems so backwards. Basically people are being bullied into using agents for fear that their property will get black listed. It definitely is not in the best interest of either the seller or the buyer. Is that not a flagrant violation of the duty of loyalty that agents are bound to?

2 Reply

Gary Lucido

Real Estate Agent · Chicago, IL · Member since 2017 · 53 posts · 48 votes

3y

Quote from @Kevin Pickrell:

We have bought and sold several properties without agents. We just used attorneys who handled everything and it worked out great and saved a lot of money.

However, In mid-2021, we saw a nice listing on realtor that was priced a little low and had been on there for a month. Unheard of in the Raleigh area. The listing said the buyers agent would get 2.5% so the buyers agent was going to get his part. No matter.... We called up three different agents asking to see it and none of them would show us the property because the gentleman that was selling it had used one of those flat fee to get it on MLS but was not using an agent. One young agent said "I am not doing double the work and only get half the pay". I am assuming that many agents simply would not show it to clients which is why we got it for about 15k less than it should have been. We ended looking up the owner via tax records and called the owner directly and made a deal. Worked out well for us but by saving the sellers agent fee he no doubt left money on the table.

We have always had very pleasant dealings without agents involved but if I was selling a property I would probably grudgingly use an agent so other agents would show the property.

For new or inexperienced home buyers or sellers who need hand-holding through the process an agent might be beneficial.

First and foremost those agents that refused to show you the property were idiots. I can elaborate if necessary. Second they were in violation of the Realtor Code of Ethics. We could debate the fine print but if you had first engaged them as your agent then they would have definitely been required under the code to show you the properties. It's also possible that they were in violation of the license law in NC but I'm not really familiar with the specifics of that law but it would not be unusual to specify that they can't blackball another agent's listing. And that seller did have an agent. It's just that those other agents didn't like their business practices.

3 Reply

Gary Lucido

Real Estate Agent · Chicago, IL · Member since 2017 · 53 posts · 48 votes

3y

I own a brokerage in Chicago and just moved to North Carolina. I also believe that realtors are overpaid for what they do.

When selling my home in Chicago I paid one of my agents to show my house, conduct open houses, and give me advice. I didn't want to weird out buyers and needed them to be comfortable reacting to my home. I also needed objectivity in the transaction, which a buyer and a seller just can't do.

I also used an agent in NC because the market is totally different here. We were not familiar with the areas or the builders or the practices, which were quite different than in Chicago.

The debate should not be about whether or not to use an agent. The debate should be about how much to pay the agent. 99% of people don't realize that they have tons of options with that but that's a whole other discussion.

7 Reply

Corby GoadeBusiness Member

Investor · Boise, ID · Member since 2014 · 3k+ posts · 3k+ votes

3y

It's silly to think you need an agent to sell a home. You don't. Anyone can sell a home all by themselves.

However- a GOOD agent's true value is in creating leverage for you. That leverage can result in less stress, better velocity of money, saved time and absolutely more money in your pocket.

I do deals directly with sellers all of the time who have the attitude that they don't need a realtor and they're going to "save" a bunch of money. Those are my favorite deals- they don't understand their rights within their own contract or state law when i comes to real estate transactions. They sell the house but have no idea that they've left tens of thousands of dollars on the table. 100% of the time they feel like they've won becuase they didn't pay an agent $10k, but they have no idea that they walked away from another $30k that they very easily could have had.

Here's the cold, hard facts: A good real estate agent is your business partner. When you work together as a team, you both win. That agent will bring you deals that no one else knows about, and you'll pay them for that.

If you treat them like a commodity and someone who is stealing from you, why on earth would they bring you any opportunities? People on these boards are always trying to network with wholesalers, but active real estate agents who work with investors see more deals, on and off market, than anyone else. Make friends with a good agent and you'll both prosper.

16 Reply

Kevin Pickrell

Member since 2023 · 3 posts · 3 votes

3y

I don't really see how am agent can be fiduciary when they are paid on commission.

im old. I remember when agents used to drive people around showing them listings. Now if a property is publicly listed, I find the properties, do the research and the agent comes and opens the doors. I don't ask their opinion on pricing or anything else. From my experiences, I know a lot more than most of them do. But I'm not the average person so I suppose there is still a need for agents for most.

My last interaction with an agent was he was supposed to call us Monday at 10:00 a.m. about a property that was in the half million dollar range so a nice tidy sum for basically going and opening a door. Mid day Tuesday afternoon he texted me and said he had forgotten to call because he went to sleep, but was now a good time to call? I wrote back a simple "no it's not" and I haven't heard from him since.

Work ethic in general today is just unbelievable to me but I grew up in a different generation. It's so good to see so many go-getters here on this board!!!

0 Reply

Paul De Luca

Real Estate Agent · Chicago, IL · Member since 2018 · 1k+ posts · 1k+ votes

3y

Quote from @Billy Knox:

Hello BP!

I have a question for the group and was hoping to generate a discussion around this topic.

Disclaimer – I am an instructor pilot in the Navy and not a real estate professional – so take everything with a grain of salt.

I recently completed a real estate transaction (sold our home) and I couldn’t help but think to myself – Why am I paying our Real Estate Agent so much money? Why do they get an equity stake in this transaction? And what do they actually do to earn that stake?

**If you are a real estate agent or know a real estate agent and are offended then my sincere apologies. I am not trying to denigrate anyone’s profession. I am sure there are plenty of agents out there that work really hard and are great people. Just asking the question.**

This got me thinking. I took a serious look at the whole real estate transactional process and it left me scratching my head as to what the actual value add of the real estate agent is these days. Understandable during the days of yore when all the data was exclusively held on the MLS and you needed agents to get access to reliable information. But we don't live in that universe anymore. The majority of data is open source and we can get it by simply looking at Zillow, county websites or heaven forbid taking a trip down to the county clerk's office and actually pulling the documents. So I now have all the information I need to make informed valuation decisions at my fingertips. Why am I giving up an equity stake for someone to run the same comparative market analysis I can run to come up with roughly the same number I would?

Well maybe they are useful when it comes to contracts and negotiations. I can see the argument there. The problem with that is that I spoke with a bunch of Real Estate Attorneys that assured me they can and do perform the same services (contract negotiations, advising, etc…) and they do it for a fixed hourly rate as opposed to an equity stake. Bonus – they have a doctorate in jurisprudence.

To me it seems like the future is moving towards a more streamline process. But I am interested to hear what the far more experienced professional investors and members of the BP community think... What, if any, is your experience navigating the waters of the real estate transaction process without agents and what are your lessons learned/thoughts on the subject? And on the flip side - what are the arguments for hiring and agent and giving them an equity stake in the transaction?

Thank you for your time! And again, just asking the question. Seeking information/guidance/opinions on the subject. Not trying to upset anyone in the slightest!

You didn't think to ask your agent or any other agents these questions? Why did you even use an agent if you didn't understand what value they provide?

The average buyer/seller has limited knowledge or experience when it comes to real estate or what's involved in a transaction and most importantly how to navigate problems. The questions agents get from buyers and sellers may seem basic and even downright silly at times but that makes sense.

I could try to fix my car myself but there's a large upfront cost of learning the relevant knowledge, buying tools/parts to make the repair, and the time spent in trial in error. Or I could just take my car to a mechanic and they will fix my car faster and for less time & money, depending on the exact problem. The same is true of using an agent to sell your house.

2 Reply

Jonathan R McLaughlin

Rental Property Investor · Boston, Massachusetts (MA) · Member since 2016 · 2k+ posts · 2k+ votes

3y

@Billy Knox wow, @Account Closed hern answered your question in the exact same tone you asked yours and you jumped down his throat. There was useful feedback there and I saw a light touch. Maybe back off a bit if you are really seeking knowledge?

One area realtors are helpful is protecting clients from themselves. People get very emotional over houses and things get blown up over irrational and often trivial details. A go between is often helpful. For most people a house is the biggest investment and emotional purchase of their lives.

The best brokers are experts in a particular micro-market and that knowledge is valuable.

One issue with lawyers is they are more skilled in protecting clients from negative consequences than with making deals happen, so their skill set is aligned but not the same. If you don't believe me spend more time with them :) That said, NEVER rely on a broker or agent to interpret the law.

One thing not said is that realtors provide an assurance to the parties that the deal can close. In a competitive environment this is helpful. Private transactions are more fraught with issues. If I was a seller and you walked in off the street I would be reluctant to deal with you as an unknown.

I'm not a huge fan of the current pricing structure--which is a different issue--and we often don't use a buyers broker but it is far easier dealing with a seller's agent then the seller. FSBO routinely do worse. And a good buyers agent is really helpful.

Mike's--not condescending--post was right on. You can teach yourself to fly a plane, but someone who has done it 1000 times and has a team behind them is going to be better at it.

5 Reply

Eliott Elias

Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes

3y

You may not think they do much, but they facilitate the transaction. Like the old saying goes "it took 10 years to learn how to do that in 10 minutes". The last thing you want is to be in a situation during a transaction with no clear path to navigation.

1 Reply

Colin Higgins

Member since 2022 · 77 posts · 47 votes

3y

I see allot of good points being made in these comments. I think what sticks out to me most is the trade off for time, experience, stress. Having an agent (who's on top of their game) and who you mutually respect/get along with well, is there to reply immediately and provide you value. The time you have to put in to research a topic, comps, legal terms, city codes, laws ect... they can have done in minutes. When someone reaches out back to you about buying or selling (a good agent) will handle it, take calls, give information, get information while your at work, driving, family time ect. You can 100 percent can buy and sell on your own if you put the work in and due diligence. There's no doubt, its just a question of your time and connivence of the transaction. You can get yourself a nice ten dollar sandwich if you get in your car and drive across town to your favorite deli, or post mates can bring it to your door for an extra five and you dont have to get out of your pajamas.

2 Reply

Billy Knox

OP

Member since 2019 · 17 posts · 24 votes

3y

All great comments and discussion yall! Thanks for posting and keep it going. I can see both sides of the argument and don't disagree with the potential value add of a good agent! I guess the follow up question that a lot of people have hinted at is what should the appropriate pay structure be? Does any one have experience with alternate pay structures? How has that worked?

Thank you for your time!

0 Reply

Bjorn AhlbladPro Member

Investor · Shelton, WA · Member since 2017 · 6k+ posts · 6k+ votes

3y

My personal experience as a buyer, FSBO properties have been overpriced and way underdisclosed. I'll say it again; overpriced and underdisclosed. So I don't bother any more.

As a seller, FSBO just is not worth my time or dealing with the learning curve. I only buy and sell properties that are at most an hour from home. So I bring the same one or two agents to the deal. If it is off market I pay them myself. My agents can find the name of an owner, deliver an unsolicited offer, arrange inspections, recommend trades as required. On and on. One of the agents owned a construction company with her husband, and the other agent is an investor. Both earn their paychecks. I don't do root canal on myself either!

2 Reply

Taylor DaschBusiness Member

Real Estate Agent · Temple, TX · Member since 2022 · 1k+ posts · 700 votes

3y

For me there are some really good reasons to use a realtor.

#1 Pricing - They are likely familiar with the market and will know right where you need to be on the price of the home. If you get a lowball offer and dont know where you need to be - especially if it has been up for a while with little to no activity - you may second guess yourself and go with a lower offer than market value.

#2 Buyers - Realtors are controlling the majority of the buyers in any given market. Either way you will probably end up paying a 3% buyers agent commission. Why not put an extra 2% commission on top and get the property exposed to all of the qualified buyers in the market ( the MLS).

#3 Marketing - They will get professional photos done, marketing, open houses, etc. to further expose your property to buyers.

You can argue that you could do this on your own but how much would it cost you at your hourly rate? In the end it would probably just be slightly more to get a listing agent and then you know the job is being done correctly.

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2 Reply

Gary Lucido

Real Estate Agent · Chicago, IL · Member since 2017 · 53 posts · 48 votes

3y

Quote from @Billy Knox:

All great comments and discussion yall! Thanks for posting and keep it going. I can see both sides of the argument and don't disagree with the potential value add of a good agent! I guess the follow up question that a lot of people have hinted at is what should the appropriate pay structure be? Does any one have experience with alternate pay structures? How has that worked?

Because I believe that realtors are usually overpaid we have a few different options. 1) We use a sliding scale on the list side. The percentage goes down as the price of the property goes up. A $1 MM property is not twice the work of a $500 K property. We don't discount the co-op unless the seller asks us to. 2) On the buy side we provide a rebate to our buyers - again on a sliding scale. 3) For either buyers or sellers we can work on an hourly basis with them saving the difference. And there is almost always a savings.

0 Reply

Joseph BeilkeBusiness Member

Real Estate Agent · Palm Coast, FL · Member since 2018 · 363 posts · 243 votes

3y

@Billy Knox

Everyone here has said the same thing, in different ways for the most part. What is not being talked about is the massive influx of agents into the business. I get beyond frustrated when I reach out to an agent, be it their first listing or their 100th and they do not have basic facts. I love when an agent says "investor opportunities, instant cash flow", then they don't even have the current rent amounts listed or the lease terms. They only fill in the absolute bare minimum in the MLS. When you call or email requesting information and they don't have it or you question how they got to a certain ROI and they become difficult, this is mainly because they don't see or understand the importance. All these agents have hurt the ones that have mastered the craft and "value" that so many talk about. I do not completely buy into "value", we all have the same tools and marketing options. I believe a great agent bring experience and knowledge which leads to smoother transactions and best overall out come.

Now for pay. I believe the pay system we have is fine, Lets break it down to someone who make 100K a year. So when you look at W-2 earners pay stub you can factor in about 30% more in benefits over the pay. That brings it to $130K a year.

In Jan 2023 my average days on market is 83, my average sale price is $367,000 and the average commission was 2.5 percent. Some conflicting reports but it seems the nation average of home sold per agent is been 8-12 depending on the data, for this scenario we will go with 10. This does not take into consideration teams break down and brokerage pyramid splits.

With all that being said. W-2 will bring home after deductions about $2400 every 2 weeks or $62,400 a year. Which is about just shy of half of their total compensation package.

Let's break down Realtor pay and simple as we can.

$367,000 x .025 = $9,175

20% Broker split. $9,175 - $1,835= $7,340

Taxes 25% pay quarterly $1,835.

Retirement 15% Realtor do not have matching contribution or pensions $1101

Health Care for 1 (Florida Blue 43 yo Male) $350 a month.

$7340- $1,835-$1101-$350 = $4054 x10

Total yearly take home is $40,540 for a Realtor and the W-2 took home $62,400. That a big difference. But for 20K less the Realtor doesn't have to report to a boss, or request off to go on vacation or take sick days. The Realtor have more personal responsibility and more flexibility, and that is a big reason so many are draw to the business. Unfortunately so many are crummy and it hurts all of use.

Yes many will argue that there is many other factors and so many will make a lot more money. I agree but to say were over paid is just not true for those of us that have mastered our craft and really do have the best interest of both our buyers and seller in mind.

Great agents bring knowledge, insight, trust, and experience.

I like to work on my Jeep and I have the time to learn how to repair most things and I enjoy it too. But sometimes I take it to a shop and have them handle it. The money spent was worth the time, tools, and experience to have piece of mind.

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3 Reply

Conrad Cortes

Real Estate Agent · Houston, TX · Member since 2020 · 56 posts · 34 votes

3y

Is it Hooyah? Just kidding, I'm a Marine vet and miss hanging out with the sailors in Pensacola.

Anyways, my opinion is that you are clearly an intelligent and motivated worker. If you weren't you wouldn't be in the Navy strapped to whatever duct taped contraption your mechs provided you with (kidding). So this is why you find it easy to research and learn the whole process and be just as meticulous as an agent would be. I was the same way and have skipped on using an agent before.

I also have used an agent when I was out of state and needed that boots on the ground person that had the connections already in place. It's the whole leveraging your resources kind of thing. Sometimes people just get too busy and know that they can't brush up on all this stuff since most will only do a few transactions their entire life.

And now I am an agent myself. And honestly I know that some people like you exist and you'll probably do fine with out an agent. But I also know that some people really could use the help and leverage my own experiences to save themselves time, which equals money.

3 Reply

Michael Mannino II

Michigan / South Carolina · Member since 2021 · 53 posts · 32 votes

3y

So many wonderful answers about the hard work that agents really do (most of them, hopefully the ones you're working with) to help with the transaction. To just explain how our flip business has set up a system that's working for us - I hired an office manger to help us run the day-to-day business, but she is also licensed. We do about 20+ houses a year, and she lists all of them for us. We made a deal with her to do this that she gets 1% instead of 3%, but she never has to even go to the property to list them. It takes a lot of the headache away from me, plus when I was listing them myself (I am licensed as well), people would be able to see that I was the owner and the agent (because you have to disclose that, in MI anyway). They would think that because I owned it, they could negotiate more. It's much easier to have someone else representing me in the sale to not have to deal with any of that anymore!

0 Reply

Russell BrazilBusiness Member

Moderator

Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes

3y

Im a real estate agent. Im in the top 1% of my profession in the country. Yet in states where Im not licensed, when I buy or sell my properties in those states I still use an agent. I do this because I know all the varies things that can go wrong in my market, all the little laws and nuances that can make big dollar differences that Im aware of and take advantage of daily.....things like those exist in those other markets where I have limited real estate and legal knowledge.

I'll use this as an easy example, as it is a mistake I see lay people and poorly trained agents in my market make all the time. In homes built after 1990 in my market, there is typically something called a Private Water and Sewer Charge. It is a yearly fee, paid to a private company. The typically cost of it is $1,000 a year for 30 years. The law in my state states that if it is not disclosed, the seller needs to pay off the entirety of the account. So Ive been involved in multiple transactions where it was not disclosed, and the seller was on the hook for $20k plus....because them and their agent didnt make the proper disclosure.

That is one example. Im a complete expert in the states where I do business, and there's tons of little things like this. But I have zero idea what the laws are in states I dont do business....so I use an agent in those states. And some of these issues....particularly the one above, can come up a year after closing when that new owner gets that first $1,000 bill and they are like what the hell is this?

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4 Reply

Account Closed

Investor · TX · Member since 2018 · 38 posts · 28 votes

3y

Most people don't understand the real estate transaction process. You do. It's actually not very complicated, but before the internet, it wasn't easy to find the information.

The MLS is also secret information in many states. There's a lot of lobbying by NAR and the other associations, too.

Most consumers don't know how any of these things work and don't want to, and would sue anyone in a heartbeat if anything went wrong, so it's important to keep that in mind.

There is always the path of becoming a wholesaler, if you really do know what you are doing.

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But the agents who compare themselves to pilots of 747s... gimme a break :-) lots of people have done wholesale and off market transactions.

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Mwazomela ThurmondBusiness Member

Realtor · Newport News, VA · Member since 2022 · 32 posts · 26 votes

3y

I'd say the biggest reason is to have an accountable person you can turn who has not only errors and omissions insurance but a network of brokers, other agents, lenders, and title companies who are there to help make the complexity much easier and save you time and money.

I heard a crazy story from my fellow agent where the buyer was out-of-state and the financing fell through after the sale was processed with the state (Virginia). The seller no longer owns the home according to Virginia and the out-of-state lender and title company has no obligation to help the seller. They have no option but to pursue legal action as the agents have also not been paid but are there to guide this seller because they've agreed to work together. You can't predict the future, but having a support system can help give you peace of mind if any hiccups occur.

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Conrad Cortes

Real Estate Agent · Houston, TX · Member since 2020 · 56 posts · 34 votes

3y

Quote from @Account Closed:

Most people don't understand the real estate transaction process. You do. It's actually not very complicated, but before the internet, it wasn't easy to find the information.

The MLS is also secret information in many states. There's a lot of lobbying by NAR and the other associations, too.

Most consumers don't know how any of these things work and don't want to, and would sue anyone in a heartbeat if anything went wrong, so it's important to keep that in mind.

There is always the path of becoming a wholesaler, if you really do know what you are doing.

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But the agents who compare themselves to pilots of 747s... gimme a break :-) lots of people have done wholesale and off market transactions.

This reminds me about the other day when I heard some agents debating about if you should accept less than 6% and one of them had the audacity to say "you wouldn't negotiate with a doctor would you"... like gtfo! Yes we add value but there's a reason the barrier to entry is so low... I think when people hear stuff like that they realize that it's just a 'sales' job and that's probably all we know and don't expect much more.

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