Why use a Real Estate Agent?

Member since 2019 · 17 posts · 24 votes

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!

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Corby GoadeBusiness Member

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

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.

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James Hamling
Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes
3y
@Billy Knox Maybe my mind is wired a bit different but I got the sense you were looking for information based replies vs the avalanche of opinion and emotion based replies I am seeing here.
- The first and largest reason in volume for utilizing an agent is the simple obvious which is most people can-not navigate the process. There is a entire component of marketing or searching out a property and while many can bodger there way through, most can not do it on a proficient level. Than contracts, most are clueless as to what contracts to use, when, how etc. and don't have the ability to figure it out. It's capability, the exact same argument for a person working on there auto vs going to an auto shop. Now some can do all this, want to learn it, navigate it, but I find way too often they have these over-pressed ideas how everyone should do it there way. Often it's more showing the chip on there shoulder vs anything else.
- Proficiency. Look, your smart, you laid out how you can sort your way through all these things and put together the pieces to get things done. And with all that your still only as much as 5% proficient as myself. Your doing it what, 1, 2, 3 times ever? I have done it hundreds. There is much to be said of experience, such as knowledge of all the un-said and un-written facets, knowing hang-ups, things to do to mitigate ___ etc.. Best way I can think to explain this is the person who has landed on a flat-top a couple times vs the one who's done it 147 times.
- Network. So let's say your going to list your own home for sale, how do you market it? To who? I hear this often of "oh, you just put it on the internet and that's it done" Lol, yeah that's a great way to leave $ on the table which is by the #'s not only enough to pay agent fee's 100% but also additional profits the seller is also missing out on, AND having to do all the work and risk of things. This is all I do, I know the mortgage brokers by first name, when i start a listing I already know exactly who my ideal buyer that's going to pay the most is, AND I have an idea of who they may be getting financing via. For example FHA. So I direct market to the brokers, the gate-keepers. Sure, you Mr No-name could try but, how are you going to know who to reach out to? Network directly results in $$$$'s. I KNOW who to connect with on any 1 certain action.
- Volume. Since this is all I do, all day every day, I am simply "in-it" in a level far beyond any novice trying to putter there way through. I have access into a volume of on-market and OFF-market actions the novice does not. I see things coming in advance that nobody does. And with this I also have a pulse of market novices do not, I know inner workings of local gov. novices do not, I know the un-posted details. I speak with various officials, financing pro's, property owners, all the various around R.E. and know the "water-cooler" knowledge which reality is, that's the first to know.
- Dissemination. Good example, when Saint Paul was starting the process of rolling out the strictest rent controls in U.S., I knew exactly what it would all mean. I had insight to the process and knew it was going to be a mess day 1 that's not workable, I knew it would be a train wreck of changes, and I knew market reaction. I was able to position my clients for the shift, before the shift happened. Novices are at the whims of REACTION vs proactive measure.
- Negotiation. Sure, you can find an attorney to do negotiations, and you can also dance to elevator music at a wedding. There getting a fee, hourly, what's there dog in the fight? Yup, just slogging through he process because either way, there paid, whatever. That's a solid game-plan for "good enough". Me, I eat what I kill! On the buy, I'm a freaking assassin! Enough is never enough, every time I am out to get "the deal", and I am brawling it out to destroy that selling agent and to take EVERYTHING. There is no such thing as enough, I press and press, every bit I get I go for more. because again I eat what I kill, I have a dog in this fight. My reputation hinges on it, and with that my income. Not to mention I am a possessed freak obsessed with the hunt, that's why i do what i do. And when listing it's same in reverse. Market value is $300k, ok, how do I get $400k and make it stick? I am making a pit fight and inspiring buyers to slit throats and brawl it out, throwing ridiculous $ at things. Yes, it's psychopathic, absolutely 100%! And my clients love it, because I am there psychopath. No, no hourly "good enough" can compare, I know because I have faced off with them and man-alive I LOVE facing off with them because it's just a big green-light for me to take em to the cleaners. yeah, that's the truth of it. I know there "good enough" and looking at billable hours AND all i gotta do is make it "easy" for them and they will "sell the farm". Again, I don't care about that other-side, I don't, I am there to conquer.
Now, is every agent "worth it", oh HELL NO! The entire reason this whole debate exists is because of all the novice dog-sh#t agents out there. That's also the reality, arguably 50% of agents are just worthless garbage. And another 30% of agents are "ok", they can get things done but very "meah" results. But the 20%..... were freakin rock-stars! Good luck trying to compare with our results. yes, we walk on water, because we do things others scratch there head and say "how'd you do that?" and for us it's just a Tuesday. Oh, covid moratorium, no thanks, f-that, i'm not doing big default rates, and we do it, LEGALLY. I had 98% rent collections through moratorium. $300k cma on home, nah screw that, let's get $350k, and I do it, and it closes!. I took a property that 2 different agent teams tried selling for a year, that did price reduction down sub $100k, and I sold it in 60 days for quadruple the price others couldn't get it done.
Problem is, in every argument of agent or self-done, nobody factors the 20% of agents, like myself, who are LEGIT Pro's. It's like comparing a person working on there own car to a NASCAR crew, no there is 0 comparison and it should be OBVIOUS. No amount of YT or self-work books can get anyone to our level. You'd have to work in it FT, for years, DECADES and be an obsessed, driven, Alpha, self-competing R.E. psychopath on top of it all, because WE ARE. And our results show it.
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Account Closed
Investor · Scottsdale Austin Tuktoyaktuk · Member since 2021 · 4k+ posts · 4k+ votes
3y
Quote from @Billy Knox:

@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.

My son is an officer in the Navy, 15 years.

Your comment: "Try and tone down the condescension next time."

If a little wit bothered you, you should not try and sell you own house. You’re too sensitive. Rather than seeing the funny side, you want everybody to follow your commands. This isn't the Navy out here. You will miss the nuance of buyers, you will be offended and prolong the process and end up selling for less than the property is worth.

When I buy or sell, I am serving the interest of the other party. I ASK them what they want to accomplish. It isn't a competition to me. I qualify them, which most FSBO sellers don't do (many agents don't do) and they waste a lot of time working with someone who can't buy. If the deal doesn't work, then it doesn't work and I don't worry about it. I understand the contracts, financing ( I was a loan originator), what can and can't be done, I know what keeps you from getting sued, how to set a price, I'm not offended during a walk through if the house isn't perfect and someone makes a disparaging comment (they are thinking out loud to see if it sounds right to them) maybe it's not actually a deal killer. I know what the competition is and what other choices they have. I'm available at odd hours to show the property.

It's not about knowledge, you can learn that.

It's about personality and working with people who don't have to follow commands. 80% of real estate agents don't make a living selling houses. They couldn’t sell their own house. They are broke or have to work other jobs. 20% make an okay income and 5% shine. The 5% work long hours and have great skills and can get along with people. If you possess those skills you can learn the other things.

I'm professionally trained to sell.

I sold very expensive computers (to the Navy and Boeing and others.) I'm from Seattle (Lots of Navy) and have never even been inside a 747 where they were made. My sales were to black projects (lots of Boeing, DOD, DOE etc), perhaps something you've been trained on.

With all of that, Anybody can sell their house without a real estate agent. Most agents find it too much to ask then to try and sell a house. They simply list in the MLS and call it good. I think that is humorous.

One of many examples, I had a 5 bed 3 bath that I contacted a couple of different agents and had them do a BPO for what they would put the house on the market for. I decided once again, to sell it myself and got over $100,000 more than they would have listed it for. Thusly, I had no real estate agent fees. In my case, agents didn't add value. But, I've also bought houses from people when the house went "off market" No agent on either side. And, if an agent brought a buyer, well, then they’ve done their job and I pay them a fee. No problem.

Anybody can sell their house without a real estate agent. They two questions are addressed in previous posts

1. Should they - (time, effort, availability, people skills, resources)

2. If they choose to use an agent, what is an appropriate fee

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Rhonda McDaniel
Realtor · Tulsa, OK · Member since 2019 · 76 posts · 42 votes
3y
From a Realtor and Investor. It comes down to doing a job for you. You pay lots of people to do jobs for you: lawn care, attorney, eve the checker at Walmart gets paid…. Part of that work should have been taking all the calls, doing all the showings, providing professional advice on the presentation and preparation of your home for the listing. I understand wanting to save money…But also the worker is worth his/her wage. It’s a job with great value, because Realtors deal with the stressful sides of transactions, the stuff others shy away from.
Now if you’re a buyer why not use a Realtor? Often it’s free to you- commission is most often paid by the seller. The Realtor on this end writes contracts, negotiates, and stays in contact with your lender and the title company to keep the deal on track and get you to closing.

So why did I become a Realtor? Yes, I get to save the realtor fees when I purchase or sale, but I anlso spend HOURS more on the buying or selling process. Becoming a Realtor is a great way to go “all-in” on real estate, and finally quitting that day job.
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Gary Lucido
Real Estate Agent · Chicago, IL · Member since 2017 · 53 posts · 48 votes
3y
Quote from @Rhonda McDaniel:

Now if you’re a buyer why not use a Realtor? Often it’s free to you- commission is most often paid by the seller. The Realtor on this end writes contracts, negotiates, and stays in contact with your lender and the title company to keep the deal on track and get you to closing.

As a realtor I've always found that that argument rings hollow. If the seller wasn't paying that fee they would accept a lower offer. And a buyer can get much of that commission back as a rebate if they work with the right realtor.
1 Reply
Keenan Fitzpatrick
Realtor · Anchorage, AK · Member since 2017 · 230 posts · 179 votes
3y
According to NAR and a bunch of other sources, real estate sells for more than the expense of a realtor when a realtor is used so why wouldn't you use one? You can literally do less work and make more money. And the seller pays the buyer's agent so again, why wouldn't you use an experienced professional fiduciary to protect you and guide you along a complex transaction that is almost always the biggest financial decision of peoples lives when you don't even have to pay for it?
1 Reply
Steve K.
Realtor · Boulder, CO · Member since 2016 · 3k+ posts · 5k+ votes
3y
Adding my thoughts to the mix...

1. I learned a lot of what I know about investing and my local market by working with some really great agents on my personal transactions (prior to getting my license myself obviously). I paid A LOT in commissions before I got licensed myself, and IMO it was worth every penny because I learned so much. It would have taken me literally decades of trial and error to learn all of that by myself, or I may have never learned it all because my chances of making a fatal mistake would have been a lot higher flying solo. Not all agents are great, but working with a great one as an investor is well worth it, in my experience, simply for the access to their knowledge and referrals to other great teammates like lenders, inspectors, contractors, etc.

One example that stands out in my memory: I had found a property for sale off market and asked my agent if she would handle the transaction for a greatly reduced fee since I had found the property and already negotiated the price. She took a quick look at the deal, knew the property already and told me the price I had negotiated was too high. She then negotiated a lower price from the seller (despite pricing in her full commission) and ended up both saving me money and making the transaction super easy and stress-free. That's probably the most concise moment when I realized the value of having a good agent working for me. If she hadn't been involved, I definitely would have overpaid without even knowing it.

Now as an agent, I come across situations like this on the regular: buyers and sellers always think they know more than they actually do, and often screw something major up without even realizing it. Anyone doing this casually just won't have the intimate local market knowledge or experience that agents who are constantly networking with other agents and investors and handling transactions every day will have.

I just didn't know what I didn't know yet back then. No offense but you probably also just don't know what you don't know yet either. It was the same when I was actively involved as a day trader in the stock market. Your typical layperson investor just can't compete with the full time traders who do it every day and network with each other constantly.

2. Most, in fact nearly all, of the terrible situations I've encountered in this business were FSBO/DIY sales gone sideways. I have tons of horror stories for you from times when somebody pumped me for free info, didn't end up using any agents for the transaction, then called me back a month later to cry about something that went wrong with the deal, asking what to do now, if they should sue, etc. FSBO's have a terrible track record, and data shows that FSBO's sell for less than listed properties, take longer to sell, have a high rate of failure/ usually end up being listed, and often end up in litigation (usually failure to disclose issues). Much of what agents do is hold deals together. Buyers and Sellers have opposing interests inherently and will always work in their own self interest/ try to screw each other over. Agents are there to act as mediators and keep the crazy train on the rails. Going directly to the listing agent as the buyer is a terrible idea as well, it's like using your ex's divorce attorney instead of getting your own. Don't do that.

3. To your point that the data needed to find properties these days is widely available... True, but where do you think that data comes from? Zillow, Redfin, etc. have IDX feeds directly from the MLS, which is data entered by... real estate agents. No agents= no MLS= no Zillow or Redfin (both of which are actually brokerages themselves which is why they have access to the MLS to begin with). A lot of people don't realize that. The MLS is controlled by the local Realtor's Association and we all pay annual dues so you can have access to that "open source" information.

4. To your point about Real Estate Attorneys being able to perform the same services as RE agents. That's not how it works in my market. I've had clients have their attorney review a contract or deal with an issue before, but they're not going to show properties or list homes for sale. I've had several clients who are RE attorney's themselves who use me for all of their transactions. They practice law everyday, they don't know the market, have access to deals, etc. and they're certainly not out there performing the tasks that people hire Realtors to do in my experience. If they did, they'd probably end up costing a lot more! I'd love to charge an attorney's hourly rate to show properties...

5. Commissions do seem really high in expensive markets, and they are. But most people don't realize the agent isn't pocketing that entire commission, and they also have a lot of expenses. For example there is an initial split paid to the brokerage (could be 75/25, 80/20, 90/10 etc. or as much as 50% paid to the brokerage if the agent is on a team). Then after that split is taken out, we pay income taxes to Uncle Sam, errors and omissions insurance (in case there's a lawsuit), Realtor's Association dues, MLS fees (so you can look at properties on Zillow), monthly technology/desk fees to our broker, health insurance, car insurance, gas, maintenance, clothing, computer, cell phone, software, marketing, etc. Most agents are 1099 with no salary or benefits paid by their broker (most actually pay their broker to work there), and those occasional big commissions have to cover all those business expenses. So it seems to many people like our commissions are really big (and sometimes they are), but not as big as it first appears once you do all the math with expenses factored in. Plus we probably work on 10 deals for every 1 that we actually get paid for.

3 Reply
Gary Lucido
Real Estate Agent · Chicago, IL · Member since 2017 · 53 posts · 48 votes
3y
Quote from @Keenan Fitzpatrick:

According to NAR and a bunch of other sources, real estate sells for more than the expense of a realtor when a realtor is used so why wouldn't you use one?
That is actually a myth. Show me the source and I'll point out the statistical flaw. For instance, in the past the NAR looked at average prices of homes sold with and without realtors and attributed the difference to the use of a realtor. Seriously? That's the only variable? How about people with less expensive homes are more likely to try to sell them themselves?
2 Reply
Linitha Tadsina
Member since 2023 · 2 posts · 2 votes
3y
In Bay area. My Neighbor sold the property for 2.2 million and it went on pending within 4 weeks they left the property. And guess what the Last name of both seller and buyer agent is the same. Why should seller loose so much money?
1 Reply
James Hamling
Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes
3y
Quote from @Gary Lucido:

Quote from @Keenan Fitzpatrick:

According to NAR and a bunch of other sources, real estate sells for more than the expense of a realtor when a realtor is used so why wouldn't you use one?
That is actually a myth. Show me the source and I'll point out the statistical flaw. For instance, in the past the NAR looked at average prices of homes sold with and without realtors and attributed the difference to the use of a realtor. Seriously? That's the only variable? How about people with less expensive homes are more likely to try to sell them themselves?

Ok, try to riddle the "statistical flaw" with fact of investors buying seller direct, and than selling it via an agent, for profit?
If self-selling a home is exactly equal to using an agent, why is the literally an entire industry in existence of buying from those self-sellers to than market sell via "standard" system of agents, FOR PROFIT.
Bueller....... Bueller....... Bueller.......
1 Reply
Gary Lucido
Real Estate Agent · Chicago, IL · Member since 2017 · 53 posts · 48 votes
3y
Quote from @James Hamling:

If self-selling a home is exactly equal to using an agent, why is the literally an entire industry in existence of buying from those self-sellers to than market sell via "standard" system of agents, FOR PROFIT.
Bueller....... Bueller....... Bueller.......
You are comparing apples and oranges - i.e. sellers who place their home on the MLS without a traditional agent and those that never put their homes on the market but do a private deal. Why do you think all these investors want homes that are NOT on the MLS? Because there is no valid price discovery for them. They are buying from naive sellers and getting a discount. However, if those sellers put their house in some kind of marketplace they would get a higher price and investors know that.

For instance, I have investors call me all the time wanting to buy properties that are not on the market. When I tell them that we don't sell properties without putting them on the market they suddenly lose interest. Riddle me that!

And just to clarify...putting a home on the market is not equivalent to using a realtor.
0 Reply
Doug SmithPro Member
Lender · Tampa, FL · Member since 2013 · 2k+ posts · 2k+ votes
3y
Hi @Billy Knox. My wife is an agent in the Tampa Bay area and she, herself, is an investor. I agree that a vast majority of RE agents have not honed their craft. She has. Her undergrad is in design with a heavy dose of building codes, etc. She "apprenticed" for lack of a better word under a very skilled broker where she learned the ins and outs of FL contracts, MLS rules, tricks of the trade etc. Early on, she worked for a private equity firm handling the rehabs and sales of foreclosed properties. She knows building codes inside and out. She currently has over 20 listings (not a misprint)...most from investors with the majority of them already under contract. She, herself, has either flipped or built scores of houses. She knows her stuff. The investors she works with lean on her for advice. She's constantly keeping them from doing stupid things. If you can't tell, I'm incredibly proud of her. That being said...that's why you need a rock-star of an agent. You need someone that's honed their craft and really knows how to work with investors. Personally, I think she doesn't get paid enough for the value she's bringing. She's making those investors a ton more money they then are paying for her years of experience.
1 Reply
Carlos Ptriawan
Member since 2019 · 7k+ posts · 4k+ 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!

we use real estate agent .............. if they are worth their value LOL
one agent to another is vastly different.
0 Reply
James Hamling
Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes
3y
Quote from @Gary Lucido:

Quote from @James Hamling:

If self-selling a home is exactly equal to using an agent, why is the literally an entire industry in existence of buying from those self-sellers to than market sell via "standard" system of agents, FOR PROFIT.
Bueller....... Bueller....... Bueller.......
You are comparing apples and oranges - i.e. sellers who place their home on the MLS without a traditional agent and those that never put their homes on the market but do a private deal. Why do you think all these investors want homes that are NOT on the MLS? Because there is no valid price discovery for them. They are buying from naive sellers and getting a discount. However, if those sellers put their house in some kind of marketplace they would get a higher price and investors know that.

For instance, I have investors call me all the time wanting to buy properties that are not on the market. When I tell them that we don't sell properties without putting them on the market they suddenly lose interest. Riddle me that!

And just to clarify...putting a home on the market is not equivalent to using a realtor.

That chip on your shoulder, against anyone succeeding where you've failed, is blatantly obvious.
This whole thing highlights the entire stereotype for "Discount Brokerages". I don't understand why your answer to business operations is a race to the bottom. But more importantly, the disdain for everyone else who does not base there entire value proposition on "I'm the single CHEAPEST person you can find anywhere, I will do it for less, less, LESS".
We don't bash your stripped down, bare bones, operational stance with blind rage. We could, oh how we could, but we don't.
You have a niche, those happy to leap over dollars to snag those pennies, and that's a-ok, bravo for you, seriously. But it doesn't change the fact of it, doing less GET's LESS. And more COSTS MORE.
Fact is it costs a lot to deliver a lot. Not every property and situation requires it, but yes MOST do, or I should say will be handsomely rewarded for such.
Again, plenty of bad agents out there over charging and under delivery, I say good riddance to them. But that is not the standard for the industry. The standard is a small army of people backing up that 1 agent people see. That's how so much get's done so fast, with exceptional high degrees of accuracy and proficiency. Again, more costs more.
Your self-listing people are EXACTLY the same as those direct selling. They are operating from there own basis alone, there is 0 difference between the two, 0.
You gave no credible retort, which tells me you don't have one, just more rant how all agents other than Discount Agents like yourself, suck. I get it, because your entire value proposition is your cheapest, so you clearly think ONLY price matters, and have ignored what your doing, what your delivering, PROBLEM SOLVING.
0 Reply
Wale LawalBusiness Member
Real Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes
3y
@Billy Knox
The proliferation of services that help homebuyers and sellers complete their own real estate transactions is relatively recent, and it may have you wondering whether using a real estate agent is becoming a relic of a bygone era. While doing the work yourself can save you the significant commission rates many real estate agents command, for many, flying solo may not be the way to go--and could end up being more costly than a realtor's commission in the long run. Buying or selling a home is a major financial (and emotional) undertaking. Find out why you shouldn't discard the notion of hiring an agent just yet.

1. Better Access/More Convenience

A real estate agent's full-time job is to act as a liaison between buyers and sellers. This means that he or she will have easy access to all other properties listed by other agents. Both the buyer's and seller's agent work full time as real estate agents and they know what needs to be done to get a deal together. For example, if you are looking to buy a home, a real estate agent will track down homes that meet your criteria, get in touch with sellers' agents and make appointments for you to view the homes. If you are buying on your own, you will have to play this telephone tag yourself. This may be especially difficult if you're shopping for homes that are for sale by owner.

Similarly, if you are looking to sell your home yourself, you will have to solicit calls from interested parties, answer questions and make appointments. Keep in mind that potential buyers are likely to move on if you tend to be busy or don't respond quickly enough. Alternatively, you may find yourself making an appointment and rushing home, only to find that no one shows up.

2. Negotiating Is Tricky Business

Many people don't like the idea of doing a real estate deal through an agent and feel that direct negotiation between buyers and sellers is more transparent and allows the parties to better look after their own best interests. This is probably true--assuming that both the buyer and seller in a given transaction are reasonable people who are able to get along. Unfortunately, this isn't always an easy relationship.

What if you, as a buyer, like a home but despise its wood-paneled walls, shag carpet and lurid orange kitchen? If you are working with an agent, you can express your contempt for the current owner's decorating skills and rant about how much it'll cost you to upgrade the home without insulting the owner. For all you know, the owner's late mother may have lovingly chosen the décor. Your real estate agent can convey your concerns to the sellers' agent. Acting as a messenger, the agent may be in a better position to negotiate a discount without ruffling the homeowner's feathers.

A real estate agent can also play the “bad guy” in a transaction, preventing the bad blood between a buyer and seller that can kill a deal. Keep in mind that a seller can reject a potential buyer's offer for any reason--including just because they hate his or her guts. An agent can help by speaking for you in tough transactions and smoothing things over to keep them from getting too personal. This can put you in a better position to get the house you want. The same is true for the seller, who can benefit from a hard-nosed real estate agent who will represent their interests without turning off potential buyers who want to niggle about the price.

3. Contracts Can Be Hard To Handle

If you decide to buy or sell a home, the offer to purchase contract is there to protect you and ensure that you are able to back out of the deal if certain conditions aren't met. For example, if you plan to buy a home with a mortgage but you fail to make financing one of the conditions of the sale--and you aren't approved for the mortgage--you can lose your deposit on the home and could even be sued by the seller for failing to fulfill your end of the contract.

An experienced real estate agent deals with the same contracts and conditions on a regular basis, and is familiar with which conditions should be used, when they can safely be removed and how to use the contract to protect you, whether you're buying or selling your home.

4. Real Estate Agents Can't Lie

Well, OK, actually they can. But because they are licensed professionals there are more repercussions if they do than for a private buyer or seller. If you are working with a licensed real estate agent under an agency agreement, (i.e., a conventional, full-service commission agreement in which the agent agrees to represent you), your agent will be bound by common law (in most states) to a fiduciary relationship. In other words, the agent is bound by license law to act in their clients' best interest (not his or her own).

In addition, most realtors rely on referrals and repeat business to build the kind of clientèle base they'll need to survive in the business. This means that doing what's best for their clients should be as important to them as any individual sale.

Finally, if you do find that your agent has gotten away with lying to you, you will have more avenues for recourse, such as through your agent's broker, professional association (such as the National Association Of Realtors) or possibly even in court if you can prove that your agent has failed to uphold his fiduciary duties.

When a buyer and seller work together directly, they can (and should) seek legal counsel, but because each is expected to act in his or her best interest, there isn't much you can do if you find out later that you've been duped about multiple offers or the home's condition. And having a lawyer on retainer any time you want to talk about potentially buying or selling a house could cost far more than an agent's commissions by the time the transaction is complete.

5. Not Everyone Can Save Money

Many people eschew using a real estate agent to save money, but keep in mind that it is unlikely that both the buyer and seller will reap the benefits of not having to pay commissions. For example, if you are selling your home on your own, you will price it based on the sale prices of other comparable properties in your area. Many of these properties will be sold with the help of an agent. This means that the seller gets the keep the percentage of the home's sale price that might otherwise be paid to the real estate agent.

However, buyers who are looking to purchase a home sold by owners may also believe they can save some money on the home by not having an agent involved. They might even expect it and make an offer accordingly. However, unless buyer and seller agree to split the savings, they can't both save the commission.
All the best!
[email protected]832-776-9582 Podcast Guest on Show #469
NETWORTH BUILDERS5236 Reviews
Website View Page
2 Reply
Account Closed
Investor · TX · Member since 2018 · 57 posts · 28 votes
3y
Quote from @Wale Lawal:

@Billy Knox
The proliferation of services that help homebuyers and sellers complete their own real estate transactions is relatively recent, and it may have you wondering whether using a real estate agent is becoming a relic of a bygone era. While doing the work yourself can save you the significant commission rates many real estate agents command, for many, flying solo may not be the way to go--and could end up being more costly than a realtor's commission in the long run. Buying or selling a home is a major financial (and emotional) undertaking. Find out why you shouldn't discard the notion of hiring an agent just yet.

1. Better Access/More Convenience

A real estate agent's full-time job is to act as a liaison between buyers and sellers. This means that he or she will have easy access to all other properties listed by other agents. Both the buyer's and seller's agent work full time as real estate agents and they know what needs to be done to get a deal together. For example, if you are looking to buy a home, a real estate agent will track down homes that meet your criteria, get in touch with sellers' agents and make appointments for you to view the homes. If you are buying on your own, you will have to play this telephone tag yourself. This may be especially difficult if you're shopping for homes that are for sale by owner.

Similarly, if you are looking to sell your home yourself, you will have to solicit calls from interested parties, answer questions and make appointments. Keep in mind that potential buyers are likely to move on if you tend to be busy or don't respond quickly enough. Alternatively, you may find yourself making an appointment and rushing home, only to find that no one shows up.

2. Negotiating Is Tricky Business

Many people don't like the idea of doing a real estate deal through an agent and feel that direct negotiation between buyers and sellers is more transparent and allows the parties to better look after their own best interests. This is probably true--assuming that both the buyer and seller in a given transaction are reasonable people who are able to get along. Unfortunately, this isn't always an easy relationship.

What if you, as a buyer, like a home but despise its wood-paneled walls, shag carpet and lurid orange kitchen? If you are working with an agent, you can express your contempt for the current owner's decorating skills and rant about how much it'll cost you to upgrade the home without insulting the owner. For all you know, the owner's late mother may have lovingly chosen the décor. Your real estate agent can convey your concerns to the sellers' agent. Acting as a messenger, the agent may be in a better position to negotiate a discount without ruffling the homeowner's feathers.

A real estate agent can also play the “bad guy” in a transaction, preventing the bad blood between a buyer and seller that can kill a deal. Keep in mind that a seller can reject a potential buyer's offer for any reason--including just because they hate his or her guts. An agent can help by speaking for you in tough transactions and smoothing things over to keep them from getting too personal. This can put you in a better position to get the house you want. The same is true for the seller, who can benefit from a hard-nosed real estate agent who will represent their interests without turning off potential buyers who want to niggle about the price.

3. Contracts Can Be Hard To Handle

If you decide to buy or sell a home, the offer to purchase contract is there to protect you and ensure that you are able to back out of the deal if certain conditions aren't met. For example, if you plan to buy a home with a mortgage but you fail to make financing one of the conditions of the sale--and you aren't approved for the mortgage--you can lose your deposit on the home and could even be sued by the seller for failing to fulfill your end of the contract.

An experienced real estate agent deals with the same contracts and conditions on a regular basis, and is familiar with which conditions should be used, when they can safely be removed and how to use the contract to protect you, whether you're buying or selling your home.

4. Real Estate Agents Can't Lie

Well, OK, actually they can. But because they are licensed professionals there are more repercussions if they do than for a private buyer or seller. If you are working with a licensed real estate agent under an agency agreement, (i.e., a conventional, full-service commission agreement in which the agent agrees to represent you), your agent will be bound by common law (in most states) to a fiduciary relationship. In other words, the agent is bound by license law to act in their clients' best interest (not his or her own).

In addition, most realtors rely on referrals and repeat business to build the kind of clientèle base they'll need to survive in the business. This means that doing what's best for their clients should be as important to them as any individual sale.

Finally, if you do find that your agent has gotten away with lying to you, you will have more avenues for recourse, such as through your agent's broker, professional association (such as the National Association Of Realtors) or possibly even in court if you can prove that your agent has failed to uphold his fiduciary duties.

When a buyer and seller work together directly, they can (and should) seek legal counsel, but because each is expected to act in his or her best interest, there isn't much you can do if you find out later that you've been duped about multiple offers or the home's condition. And having a lawyer on retainer any time you want to talk about potentially buying or selling a house could cost far more than an agent's commissions by the time the transaction is complete.

5. Not Everyone Can Save Money

Many people eschew using a real estate agent to save money, but keep in mind that it is unlikely that both the buyer and seller will reap the benefits of not having to pay commissions. For example, if you are selling your home on your own, you will price it based on the sale prices of other comparable properties in your area. Many of these properties will be sold with the help of an agent. This means that the seller gets the keep the percentage of the home's sale price that might otherwise be paid to the real estate agent.

However, buyers who are looking to purchase a home sold by owners may also believe they can save some money on the home by not having an agent involved. They might even expect it and make an offer accordingly. However, unless buyer and seller agree to split the savings, they can't both save the commission.
All the best!

This is the best answer. The liability placed on agents and brokers definitely helps. The elephant in the room, though, is the bias and NAR's monopolization of the industry. It is very hard to get an unbiased answer on using an agent ... from an agent. It's like asking a barber if you need a haircut. Or asking a car salesman if you should buy a car (from them, of course). I'm sure that if I went through the process and got a license (I've actually taken the entire course, just decided against licensing due to the liability) that it would be hard not to switch my tune because of the incentives... That's just how human bias works.
0 Reply
Marcus Auerbach
Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes
3y
The better question is: Why use ANY real estate agent?

A lot of investors on here who have commented they have done hundreds of deals without an agent (@Bob S.) - well, YOU kind of are the agent, probably better than the average agent. Because the main value an agent brings is experience. Most buyers and sellers have done zero deals or one, ten+ years ago.
When you think about it, it's a pretty bold move for a consumer to complete the largest financial transaction in your life without a professional. What could possibly go wrong!

Consumers tend think all agents are the same. The reality is that every market has a hand full of agents who personally do 50+ deals a year and have done that for a decade, compared to the average agent, who is in business less than 2 years and has done maybe a dozen deals in their career.

Experience matters when things go sideways. You may not need it in a simple transaction. And that is also why you have to take the account from someone who has sold their own home and says it's no big deal with a grain of salt, because they had a smooth transaction. When things get dicey, experience starts to matter, just like in aviation. And in RE that can translate into your bottom line or even worse into preventing some legal issues.
You are selling a duplex, 6 months ago someone shot at the house, do you disclose that to a buyer or not? What's you liability if you don't?

@Billy Knox flying a plane is not hard. Flying a helicopter is a bit harder. I am not a pilot, but had the pleasure to try both. I believe it takes 50 hours to get a private pilot license, you learn a bit about weather, airspace classification and how to talk to ATC. You get my point, that's what a new agent looks to me.

0 Reply
Gary Lucido
Real Estate Agent · Chicago, IL · Member since 2017 · 53 posts · 48 votes
3y
Quote from @James Hamling:

This whole thing highlights the entire stereotype for "Discount Brokerages". I don't understand why your answer to business operations is a race to the bottom. But more importantly, the disdain for everyone else who does not base there entire value proposition on "I'm the single CHEAPEST person you can find anywhere, I will do it for less, less, LESS".
We don't bash your stripped down, bare bones, operational stance with blind rage. We could, oh how we could, but we don't.
You have a niche, those happy to leap over dollars to snag those pennies, and that's a-ok, bravo for you, seriously. But it doesn't change the fact of it, doing less GET's LESS. And more COSTS MORE.
Fact is it costs a lot to deliver a lot. Not every property and situation requires it, but yes MOST do, or I should say will be handsomely rewarded for such.
Again, plenty of bad agents out there over charging and under delivery, I say good riddance to them. But that is not the standard for the industry. The standard is a small army of people backing up that 1 agent people see. That's how so much get's done so fast, with exceptional high degrees of accuracy and proficiency. Again, more costs more.
Your self-listing people are EXACTLY the same as those direct selling. They are operating from there own basis alone, there is 0 difference between the two, 0.
You gave no credible retort, which tells me you don't have one, just more rant how all agents other than Discount Agents like yourself, suck. I get it, because your entire value proposition is your cheapest, so you clearly think ONLY price matters, and have ignored what your doing, what your delivering, PROBLEM SOLVING.
You make many assertions without evidence. What makes you think I've failed?

And what makes you think that we provide a stripped down service? We don't. We just take a lower commission. I just have never met an agent that I think is worth the hundreds of thousands that some make in our market. And we've worked with them all.

And where have I bashed other agents? I simply said they were overpaid. Many people are overpaid and other underpaid in the economy.

But I do agree that there are numerous bad agents out there. I estimate that 80% are worthless. But there is only a slight correlation between what an agent makes and how good they are.
0 Reply
Steve Vaughan
Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
3y
I've sold 22 by owner, 3 with listing agents. The LA was worth it 1 time. I had an expired lease option 3 states away and she was invaluable.

I sell long-time rental houses by owner net of commissions. My target is a first time buyer and I want to pass the savings on to them.

If they have an agent, they pay more a la carte. I say in my posting- if you have an agent, just offer higher to cover their fee. Same if you want closing/borrowing cost help. It is easier for me when they have an agent and most do. Tell them how you're buying agent services 'are free to them'. They finance it over 30 years, but it ain't free.

I've purchased 3 with a buyer's agent, 3 dozen without. Twice the agent was worth it as I was brand new or out of area. The 3rd one was forced on me and I resent that. I wasn't able to get on the showing list without one, so I retained one of my tenants.

2 of my 3 listing agents were tenants as well. If you have to pay to play, might as well pay your people.

The collusion makes me bitter. Sellers are forced to pay for their future counter-parties representation. No other industry does this. Can you imagine? I'm here to negotiate against you and you also have to pay me.

The MLS is a Tammany-esque club where the consumer pays just to get access. I sold a house to a friends' kid. They 'lawyered up' (got an agent, convinced it was free) so I had to get one, costing us $18,000. Little value was added.
I would've much rather given my friends kid (a first-time buyer) $16,000 in price discount and concessions.

2 Reply
Sam McCormackBusiness Member
Real Estate Agent · Cincinnati, OH/NKY · Member since 2021 · 1k+ posts · 834 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.

That is so weird to me, money is money. I don't know how people will see that amount of money and simply not work for it. Waive a $5 in front of me and I will go for it, lol
[email protected]859-443-4952
Sam McCormack Realtor
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0 Reply
Ika Sargeant
Real Estate Agent · Reston, VA · Member since 2017 · 296 posts · 163 votes
3y
@Billy Knox I am sure by now you understand on some level why you need to hire a real estate agent. I am very sure you understand having information or access to it, does not tell you everything. Experienced agents see the layers of information and understand which layer carries more weight. They know what to hunt for when you are buying a home of a certain age or certain neighborhood, we look at all the nuances including local laws. Real estate is like a giant octopus with so many tentacles and connections. Everything in your transaction went smoothly because your agent was plugging and closing every whole. Settlement lawyers I have come across use agent to buy, I will not go to any state that I am unlicensed in and buy without an agent. All of us from the inside understand, things can go smoothly and then the octopus turns on its back. Suddenly you are out of thousands. But to reverse your question, simply ask... with so many changes in the industry and so many bright people ...why haven't we got rid of agents?
0 Reply
Jay ThomasPro Member
Real Estate Agent · Houston, TX · Member since 2021 · 1k+ posts · 715 votes
3y
Selling a home can be a daunting process, with many details to manage and decisions to make. Real estate professionals are essential in helping navigate this major milestone, providing much-needed guidance throughout the transaction. For buyers, they provide assurance that all the necessary steps have been taken and that they're not overpaying for their property. Similarly, sellers benefit from the help of experts who understand how to maximize their return on investment. Real estate agents play an important role in making sure both parties get the best possible outcome out of their respective transactions – something no one should go without!
[email protected]832-889-5607
0 Reply
Craig Janet
Member since 2019 · 223 posts · 261 votes
3y
I've bought plenty of off market deals. I will contact the seller, view the property, and then make a offer. If its accepted, I call an attorney to draw up a purchase agreement. Then we close on the property. If there is any problems the attorney will contact the person needed. I don't see what value an agent would have given either party.
The only value I see with an agent is to show the property. Because people will always want to look at it at the worst times. Many won't even show up. Many others can't afford the house or they are just kicking the tires. No way that's worth 6% which could be tens of thousands of dollars.
1 Reply
Kevin Pickrell
Member since 2023 · 3 posts · 3 votes
3y
I had a great agent who had many years of experience. But he retired. Since then I have found no good agents and have tried several that people recommended to me. Here in North Carolina real estate school is 75 hours and most of the agents that have seen it shows. I'm new to BiggerPockets and I see that there's recommended agents on here and I think I'll check some of them out next time I decide to buy a house. I'm guessing the recommendations from folks on here is going to be much much better than my local recommendations.
0 Reply
Wale LawalBusiness Member
Real Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes
3y
Quote from @Account Closed:

Quote from @Wale Lawal:

@Billy Knox
The proliferation of services that help homebuyers and sellers complete their own real estate transactions is relatively recent, and it may have you wondering whether using a real estate agent is becoming a relic of a bygone era. While doing the work yourself can save you the significant commission rates many real estate agents command, for many, flying solo may not be the way to go--and could end up being more costly than a realtor's commission in the long run. Buying or selling a home is a major financial (and emotional) undertaking. Find out why you shouldn't discard the notion of hiring an agent just yet.

1. Better Access/More Convenience

A real estate agent's full-time job is to act as a liaison between buyers and sellers. This means that he or she will have easy access to all other properties listed by other agents. Both the buyer's and seller's agent work full time as real estate agents and they know what needs to be done to get a deal together. For example, if you are looking to buy a home, a real estate agent will track down homes that meet your criteria, get in touch with sellers' agents and make appointments for you to view the homes. If you are buying on your own, you will have to play this telephone tag yourself. This may be especially difficult if you're shopping for homes that are for sale by owner.

Similarly, if you are looking to sell your home yourself, you will have to solicit calls from interested parties, answer questions and make appointments. Keep in mind that potential buyers are likely to move on if you tend to be busy or don't respond quickly enough. Alternatively, you may find yourself making an appointment and rushing home, only to find that no one shows up.

2. Negotiating Is Tricky Business

Many people don't like the idea of doing a real estate deal through an agent and feel that direct negotiation between buyers and sellers is more transparent and allows the parties to better look after their own best interests. This is probably true--assuming that both the buyer and seller in a given transaction are reasonable people who are able to get along. Unfortunately, this isn't always an easy relationship.

What if you, as a buyer, like a home but despise its wood-paneled walls, shag carpet and lurid orange kitchen? If you are working with an agent, you can express your contempt for the current owner's decorating skills and rant about how much it'll cost you to upgrade the home without insulting the owner. For all you know, the owner's late mother may have lovingly chosen the décor. Your real estate agent can convey your concerns to the sellers' agent. Acting as a messenger, the agent may be in a better position to negotiate a discount without ruffling the homeowner's feathers.

A real estate agent can also play the “bad guy” in a transaction, preventing the bad blood between a buyer and seller that can kill a deal. Keep in mind that a seller can reject a potential buyer's offer for any reason--including just because they hate his or her guts. An agent can help by speaking for you in tough transactions and smoothing things over to keep them from getting too personal. This can put you in a better position to get the house you want. The same is true for the seller, who can benefit from a hard-nosed real estate agent who will represent their interests without turning off potential buyers who want to niggle about the price.

3. Contracts Can Be Hard To Handle

If you decide to buy or sell a home, the offer to purchase contract is there to protect you and ensure that you are able to back out of the deal if certain conditions aren't met. For example, if you plan to buy a home with a mortgage but you fail to make financing one of the conditions of the sale--and you aren't approved for the mortgage--you can lose your deposit on the home and could even be sued by the seller for failing to fulfill your end of the contract.

An experienced real estate agent deals with the same contracts and conditions on a regular basis, and is familiar with which conditions should be used, when they can safely be removed and how to use the contract to protect you, whether you're buying or selling your home.

4. Real Estate Agents Can't Lie

Well, OK, actually they can. But because they are licensed professionals there are more repercussions if they do than for a private buyer or seller. If you are working with a licensed real estate agent under an agency agreement, (i.e., a conventional, full-service commission agreement in which the agent agrees to represent you), your agent will be bound by common law (in most states) to a fiduciary relationship. In other words, the agent is bound by license law to act in their clients' best interest (not his or her own).

In addition, most realtors rely on referrals and repeat business to build the kind of clientèle base they'll need to survive in the business. This means that doing what's best for their clients should be as important to them as any individual sale.

Finally, if you do find that your agent has gotten away with lying to you, you will have more avenues for recourse, such as through your agent's broker, professional association (such as the National Association Of Realtors) or possibly even in court if you can prove that your agent has failed to uphold his fiduciary duties.

When a buyer and seller work together directly, they can (and should) seek legal counsel, but because each is expected to act in his or her best interest, there isn't much you can do if you find out later that you've been duped about multiple offers or the home's condition. And having a lawyer on retainer any time you want to talk about potentially buying or selling a house could cost far more than an agent's commissions by the time the transaction is complete.

5. Not Everyone Can Save Money

Many people eschew using a real estate agent to save money, but keep in mind that it is unlikely that both the buyer and seller will reap the benefits of not having to pay commissions. For example, if you are selling your home on your own, you will price it based on the sale prices of other comparable properties in your area. Many of these properties will be sold with the help of an agent. This means that the seller gets the keep the percentage of the home's sale price that might otherwise be paid to the real estate agent.

However, buyers who are looking to purchase a home sold by owners may also believe they can save some money on the home by not having an agent involved. They might even expect it and make an offer accordingly. However, unless buyer and seller agree to split the savings, they can't both save the commission.
All the best!

This is the best answer. The liability placed on agents and brokers definitely helps. The elephant in the room, though, is the bias and NAR's monopolization of the industry. It is very hard to get an unbiased answer on using an agent ... from an agent. It's like asking a barber if you need a haircut. Or asking a car salesman if you should buy a car (from them, of course). I'm sure that if I went through the process and got a license (I've actually taken the entire course, just decided against licensing due to the liability) that it would be hard not to switch my tune because of the incentives... That's just how human bias works.

I am always happy to share my knowledge and experience.
Get as much knowledge and experience as possible and find a mentor.

Join real estate investment clubs.

Get in touch with a local agent or investor and shorten your learning curve and save you a lot of headaches as they tend to understand the market better.

Keep learning and sharing.

All the best!
[email protected]832-776-9582 Podcast Guest on Show #469
NETWORTH BUILDERS5236 Reviews
Website View Page
1 Reply
James Hamling
Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes
3y
Quote from @Account Closed:

Quote from @Wale Lawal:

@Billy Knox
The proliferation of services that help homebuyers and sellers complete their own real estate transactions is relatively recent, and it may have you wondering whether using a real estate agent is becoming a relic of a bygone era. While doing the work yourself can save you the significant commission rates many real estate agents command, for many, flying solo may not be the way to go--and could end up being more costly than a realtor's commission in the long run. Buying or selling a home is a major financial (and emotional) undertaking. Find out why you shouldn't discard the notion of hiring an agent just yet.

1. Better Access/More Convenience

A real estate agent's full-time job is to act as a liaison between buyers and sellers. This means that he or she will have easy access to all other properties listed by other agents. Both the buyer's and seller's agent work full time as real estate agents and they know what needs to be done to get a deal together. For example, if you are looking to buy a home, a real estate agent will track down homes that meet your criteria, get in touch with sellers' agents and make appointments for you to view the homes. If you are buying on your own, you will have to play this telephone tag yourself. This may be especially difficult if you're shopping for homes that are for sale by owner.

Similarly, if you are looking to sell your home yourself, you will have to solicit calls from interested parties, answer questions and make appointments. Keep in mind that potential buyers are likely to move on if you tend to be busy or don't respond quickly enough. Alternatively, you may find yourself making an appointment and rushing home, only to find that no one shows up.

2. Negotiating Is Tricky Business

Many people don't like the idea of doing a real estate deal through an agent and feel that direct negotiation between buyers and sellers is more transparent and allows the parties to better look after their own best interests. This is probably true--assuming that both the buyer and seller in a given transaction are reasonable people who are able to get along. Unfortunately, this isn't always an easy relationship.

What if you, as a buyer, like a home but despise its wood-paneled walls, shag carpet and lurid orange kitchen? If you are working with an agent, you can express your contempt for the current owner's decorating skills and rant about how much it'll cost you to upgrade the home without insulting the owner. For all you know, the owner's late mother may have lovingly chosen the décor. Your real estate agent can convey your concerns to the sellers' agent. Acting as a messenger, the agent may be in a better position to negotiate a discount without ruffling the homeowner's feathers.

A real estate agent can also play the “bad guy” in a transaction, preventing the bad blood between a buyer and seller that can kill a deal. Keep in mind that a seller can reject a potential buyer's offer for any reason--including just because they hate his or her guts. An agent can help by speaking for you in tough transactions and smoothing things over to keep them from getting too personal. This can put you in a better position to get the house you want. The same is true for the seller, who can benefit from a hard-nosed real estate agent who will represent their interests without turning off potential buyers who want to niggle about the price.

3. Contracts Can Be Hard To Handle

If you decide to buy or sell a home, the offer to purchase contract is there to protect you and ensure that you are able to back out of the deal if certain conditions aren't met. For example, if you plan to buy a home with a mortgage but you fail to make financing one of the conditions of the sale--and you aren't approved for the mortgage--you can lose your deposit on the home and could even be sued by the seller for failing to fulfill your end of the contract.

An experienced real estate agent deals with the same contracts and conditions on a regular basis, and is familiar with which conditions should be used, when they can safely be removed and how to use the contract to protect you, whether you're buying or selling your home.

4. Real Estate Agents Can't Lie

Well, OK, actually they can. But because they are licensed professionals there are more repercussions if they do than for a private buyer or seller. If you are working with a licensed real estate agent under an agency agreement, (i.e., a conventional, full-service commission agreement in which the agent agrees to represent you), your agent will be bound by common law (in most states) to a fiduciary relationship. In other words, the agent is bound by license law to act in their clients' best interest (not his or her own).

In addition, most realtors rely on referrals and repeat business to build the kind of clientèle base they'll need to survive in the business. This means that doing what's best for their clients should be as important to them as any individual sale.

Finally, if you do find that your agent has gotten away with lying to you, you will have more avenues for recourse, such as through your agent's broker, professional association (such as the National Association Of Realtors) or possibly even in court if you can prove that your agent has failed to uphold his fiduciary duties.

When a buyer and seller work together directly, they can (and should) seek legal counsel, but because each is expected to act in his or her best interest, there isn't much you can do if you find out later that you've been duped about multiple offers or the home's condition. And having a lawyer on retainer any time you want to talk about potentially buying or selling a house could cost far more than an agent's commissions by the time the transaction is complete.

5. Not Everyone Can Save Money

Many people eschew using a real estate agent to save money, but keep in mind that it is unlikely that both the buyer and seller will reap the benefits of not having to pay commissions. For example, if you are selling your home on your own, you will price it based on the sale prices of other comparable properties in your area. Many of these properties will be sold with the help of an agent. This means that the seller gets the keep the percentage of the home's sale price that might otherwise be paid to the real estate agent.

However, buyers who are looking to purchase a home sold by owners may also believe they can save some money on the home by not having an agent involved. They might even expect it and make an offer accordingly. However, unless buyer and seller agree to split the savings, they can't both save the commission.
All the best!

This is the best answer. The liability placed on agents and brokers definitely helps. The elephant in the room, though, is the bias and NAR's monopolization of the industry. It is very hard to get an unbiased answer on using an agent ... from an agent. It's like asking a barber if you need a haircut. Or asking a car salesman if you should buy a car (from them, of course). I'm sure that if I went through the process and got a license (I've actually taken the entire course, just decided against licensing due to the liability) that it would be hard not to switch my tune because of the incentives... That's just how human bias works.

A lot of this is just assumption, assuming a Real Estate Agent is ONLY arguing to defend there profit generation. The truth is it's a LOT more like a surgeon trying to share and explain why it's foolish to try and do your own surgery, yourself.
Look, in the vast majority of cases a real estate transaction is in the hundreds of thousands of dollars. It's a lot of money, years and years worth if not decades worth of income, right, the risks are BIG from screw-up's, one mess-up easily costs thousands and tens of thousands.
Reality is Real Estate Transactions are complicated. Yes, a person "can" do it "simple", and one "can" do a surgery with a chain-saw, doesn't make it correct.
The thing in Real Estate Transactions, and newer wholesalers run into this a lot, is finding out you only did the basics, and missed things, big things, expensive things. This is law were talking about, ever seen a law library? Ever try reading a legal statute? Yeah, it ain't easy. An agent's main thing isn't for the simple obvious stuff, any ya-hoo can do a fill-in-the-blanks basic PA. An agent, like an attorney, exists for all the sh#t that SINT commonly known, for the DETAILS. On average MOST transactions have no less than 7 addendums, if done correctly. Yup, and that's just basic 101. Most is "CYA" doc's so nothing comes back after the fact, months or years later, to bite one in the arse.
There is a mountain of variables to every transaction, and knowing which applies, which does not, how to best address it for the stance one is in, how it legally impacts, THATS what an agent exists for. This whole argument of doing it one-self has stood on an assumption "it's EASY" and "Anyone can do it", which NO, that's not true, it's NOT easy and no not anyone can do it, anyone can try and most likely do it really poorly, with lots of screw-ups, and get into litigation which there ya go, that's 10X the cost an agent would have been.
Look, I simply tell the truthy, that's it. About 15% of my client base is people who did try doing things themselves, and learned the hard way. They ask me often "how do you do it" when it seems so easy that I get done "the things". It's one simple fact, this is what I do, every day, FT, for years, decades. It's infantile to think a person with 0 experience can get same or similar results to one who does it FT day in and day out.
No person would argue they can cook ANYTHING as good as Gordon Ramsey, a chef. They don't say "well, anyone can cook, so Chef's are a waste of $, I can throw together whatever they do no problem". No, everyone would laugh at that. Why is it not equally as common sense about a complicated legal process involving hundreds of thousands of dollars, layers of regulatory over-sight from Federal, state, county and local.
Yes, SOME can, stress on SOME. Some CAN cook as good as a Chef. That sure as hell does not mean ANY can.
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