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If I Can Research Properties on the Internet, Why Should I Work With An Agent?

I am a do-it-myselfer. I enjoy the challenge of fixing what's broken on my own, of discovering something new, and of finding a good bargain. So I have to admit I get it when people tell me they think they don't need an agent for buying a house. Between being able to search our MLS online, internet postings about open houses, and virtual tours, buyers have so many tools at their disposal, it's easy to start believing you can do it yourself. Too easy . . . because there's a lot more to buying a house than simply finding a pretty one on the Internet.

We are seeing a real trend - buyers researching properties on the Internet, attending open houses, and then trying to put in offers on their own in an attempt to save on some commission. Sometimes it works. But more often than not, the buyers' attempt to save a buck ends in disappointment. A couple of weekends ago I saw the perfect example of why you can't always do it yourself. I hosted an open house at an extremely well-priced townhome in a popular subdivision in Boulder. People were literally waiting at the door for me to open it, saying they'd seen it come up on the MLS and couldn't wait to check it out. Unfortunately, their ship had already sailed. Other buyers had already jumped on the property, having had early notice of its being on the market and having seen it before the open house. How could these open house visitors have avoided this disappointment? By having their agent alert them of the new listing and get them into the property as soon as possible to check it out.

Your agent alerting you to new interesting listings is just one small example of how working with a buyers' agent can pay off. There are so many other benefits: the agent's knowledge of the market and sales prices, which can help you avoid overpaying; the agent's experience with contracts once you make an offer; the agent's experience in bringing in qualified inspectors and professionals to evaluate the property you're buying . . . the list goes on and on.

All things said and done, after negotiating an offer, inspections, appraisals, and mortgage issues, working with an agent will often save you more than you will pay out in commission. It also avoids countless evenings filled with stress and worry over the pending transaction. Buying a house is just not the time to be a do-it-yourselfer - save that for the new kitchen remodel!

Boulder County REALTOR

www.oconnellhomes.com

303-868-3957

Posted by Ann O'Connell on 08/24/2010 05:48 PM

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79 Comments on If I Can Research Properties on the Internet, Why Should I Work With An Agent?

AUG

2010

Ann: This is an excellent post. I'd "suggest" this as must read to every agent. Thank you.

You hit the nail on the head! :O) What about those who DO buy it on their own and a year later are calling with "they didn't tell me about he MUD taxes"..... "The POA says that I can't run a beauty shop out of my house... shouldn't they have told me" or worse... "I've been paying them for over a year and just received a knock on the door telling me the house has been foreclosed on... what can I do....?"

Great post, Ann. Information is so readily available today that many buyers think they simply don't need us. We as agents need to educate buyers and explain the many things we do for them and how they benefit. Thanks for the post.

It's going to be an interesting balancing act while buyers and sellers gain access to more powerful, sophisticated, and easy-to-use tools. I think that the role of the agent will significantly change as buyers and sellers are able to more directly communicate with one another.

Ann, I reblogged this -- many eyes should see your post. You've shown buyers the benefit a full-time Realtor brings them.

You know, what you say makes sense.

In remodeling I have been proudly shown what the owners had remodeled on their own, all I can say is there's a world of difference at what a handy person can do and what a pro can do, and most people can tell the difference, but not all can tell.What can you do? People want to save money at any cost.

Now that I'm working to get my real estate license after 30 years as a contractor (with the same phone #) I find myself in yet another profession where clients see the do it yourself savings only, not the cost of the saving, not the time, the potential for trouble or the fact they may have spent more and gotten less.

Truth is I have sold my own homes and I know realtors who did their own remodeling, for some of us the result is very good, but for many it becomes a mess. Its hard to deny someone their dream of that perfect bath for 50% less. Lucky for us we can still sell our skills as a value not a cost.

Ann, I found this thanks to Lottie's reblog and am doing same plus suggest. Well Done. Thanks.

AUG

2010

In the end, is a buyer going to end up saving a commission? Probably not, because the listing agent is probably going to just have a double dip.

It makes sense that a seller would try to save paying a listing agent and maybe even a listing agent a commission...and then ask a REALTOR to list their home after they've had first hand experience with how that goes!

Nice post- Ann! I think you hit the nail on the head. These folks thought they were ahead of the game. A good agent is always more in TUNE with whats happening than the average joe. The funny thing is that their buyer's agent commission would have been paid by seller anyway!

I have had people try to negotiate commission with me because "I found it on the Internet so I found the house". Well, not exactly. I paid to have that on the site that you found it on. Without me going through the effort and expense of doing that, you wouldn't have found it.

Great post Ann!

Ann - Very well put and to the point. I could not agree more. I just love being asked why they should use me. My response depends on my mood, but a favorite is: 'you can pull your own teeth, but I don't advise it...'.

Ann,

From a lender's perspective, things can get very very complicated without an agent representing a buyer...I refer all my credit union borrowers to buyers agents rather than having them try to go it alone. Way too many pitfalls when you don't have the expertise and experience you only get from a seasoned agent.

I'm reblogging, this is great advise.

Hey-it is easy to search for properties. However, it takes an experienced Realtor to close the deal. That is the difference. Closing the Deal$ in my opinion.

The market is changing so rapidly, a buyer could not have enough information. There is the financial reform act, shortsales, REOs, inspections and appraisals. Whee!

Great Post Ann, well written and something buyers should seriously consider before they consider dealing privately.

Ann - this is a GREAT post and I'm so glad to be able to reblog it. I'd like to get it in front of as many eyes as possible. Thank you for sharing!

You wrote: trying to put in offers on their own in an attempt to save on some commission

But buyers don't pay a commission, not in my market anyways. The commission structure is the SAME. Just because a buyer shows up unrepresented doesn't mean they'll get an extra reduction. The listing agent will keep ALL the commission. It's the same to the seller and the agreement is between the seller and the listing BROKERAGE, not the seller, listing agent and unlicensed buyer.

Anytime a buyer pulls this I explain exactly what I just typed. Are you looking for commission kick-backs or a HOUSE?

Where's your focus mister buyer? Now beat it!

Gee, other than experience, advocacy and the common sense that one would not remove their own appendix or tooth, sure, go it alone.

Outstanding explanation.

Hi Ann,

An excellent post

Thank You

ebrahim

How much money could this possibly save? Lets say at the outset that an agent's agreement with the seller is just that: an agreement with the SELLER - not the buyer. The buyer has nothing to do with that contract. Buyers seem to want to take a slice of that pie - and I think a lot of this activity has been augmented by rebaters. It feeds the illusion that there is tons of fat in the real estate transactiion which is simply not true. But here is the issue. They think they are going to be able to tuck away half the commission - and save all that money for themselves. Uh - no way. Even IF a lisitng agent offers a concession because they are double dipping - its not going to be half the commission. THey spent time and money on marketing which brought that buyer in....Not to mention the fact that dealing with both sides of the transaction through pre-contract, contract, inspectors appraisers, repair estimates - not to mention getting the loan secured (an adventure in itself) and the closing. There is no way they are giving up half the commission because its time and money to do both sides. There is also additional liability. So - best case scenario - the buyer goes through all of this themselves - exposes themselves to additional legal issues and risk to save a few hundre to $1000 in most cases? WHY??? That's a small price to pay for what could go wrong.

Thanks for all the great comments, everyone! I love the analogy of pulling your own teeth. Also, it's true that the likely result is that no commission will be saved. The double dip point is also a good one - here in Colorado we can act as transaction brokers, so a double dip is possible - and likely - when an agentless buyer comes along.

Torgie's point is also well-taken. As more tools are at the disposal of agentless buyers, we agents will have to do more and more PR to educate the public about the fact we do so much more than find the right home. I know my buyers have no clue about how much more work I do than just find properties - as their agent, I try to make the process as painless as possible for them and not burden them with unnecessary details. I'm starting to think it's not a bad idea to keep track of EVERYTHING I do, to serve as an example for when a buyer asks what value I add. Or, perhaps, an hourly fee structure might better serve all involved as the way people search for the perfect property evolves??? But that's a discussion for another post . . .

I always ask "if you needed brain surgery, would you do it yourself?"..."if you were facing an IRS audit, would you represent yourself?"..."if you were be sued, would you be your own attorney?"

Trying to save a commission can end up costing you a lot of money.

Great Post - Thanks Ann - Going to reblog this great information.

Related: a lot of Sellers in my market are asking for a commission structure up front (in the listing agreement) that reduces the commission if a Buyer comes in without an agent. Heck, I used to demand that 15 years ago, before I was an agent, so I understand the mindset ;) I'll occassionally agree to it, but usually not unless it's a very good client... usually meaning repeat or ready to buy another home through me once the subject listing is sold. But not more than 1% less. When that unrepresented Buyer comes in demanding similar, my response is always the same... that is a contractual agreement between my Seller and me, not part of a Buyer's negotiation strategy.

I don't agree with the surgeon, dentist, lawayer analysis. All of these professions require many years of schooling and extremly difficult testing before you can become licensed. Unfortunately to beome a real estate agent doesn't take anywhere close to that. I wish it did as I feel our job is equally importatnt as these other professionals, but it simply does not. As a buyer's agent you need to establish your value to the transaction. The points your raised in your post are excellent, but with more and more information being made available to the consumer our business model will need to change to keep up with the changing times.

Great post Ann. As mentioned above, I have also seen do it yourself buyers coming directly to listing agents asking for the buyer side of the commission to be reduced off the purchase price. I usually find these buyers have more time than sense.

Fantastic Post Ann! I re-blogged it because of the awesomeness!

What a great post Ann! So many buyers don't see the true value in having representation from a Realtor. This was a needed reminder of everything we do fro buyers.

Lets face it the Internet is a great research tool. You can hardly argue its convenience and it is open 24/7-365.

Its a starting point nothing more, buying real estate is a contact sport you have to see it touch it and get information from a trusted professional a real real-estate coach in the form of a qualified Realtor to get the best possible end results.

Its clicks and bricks that make the best possible buying experience click on it and get to a Realtors office that can help you sort out your options (bricks).

Ann, what a super post and definitely worthy of a reblog. So many buyers wind up costing themselves far more in the long run than they save. If only we could get them to see it from the get go. Your post lays it out so clearly.

Excellent post. Anyone can use the internet to find properties. Real Estate Professionals offer so much more than "finding properties."

Yeah, well I can find out how to extract an impacted wisdom tooth on the Internet too. Doesn't mean I'd be doing that on myself, or someone else, anytime soon! And BTW, amazing that you had folks lining up for the property.

They need us, but accept the fact that they start their search online first. That's reality and it is not going to change anytime soon. That's why 100% of us are on AR right now.

Ann,

Also, I've had a couple of deals that held together BECAUSE I am a Realtor®.

Ann, agents have BETTER search tools, knowledge of the process and contracts, training and experience, and they do this every day. The do it yourselfers are doing themselves a disservice thinking they can do it all on their own.

I don't think a lot of buyers or sellers realize how things can fall apart on the inspections and financing. Then, there is no professional to help them work out a compromise or figure out how to work out the "messy" details.

HI Ann,

Pfanntastic Post and as a few other, I will reblog this to our outside blog, thanks a bunch for putting it so clear.

Happy selling

Wonderful post! And very true. If you need another example, how about one of my recent listings. The present owners bought it from a for sale by owner, who told them it was a stick built home. Well, it isn't. And the current owners are unhappy it has to be listed as a modular.

Ann - I really enjoyed your post because of your "gentleness" - the way that you phrased everything was not harsh in any way. I think that is what buyers are looking for these days - an agent who really cares and is not out for the buck only. Congrats on the feature and keep up the good work!

Ann,

Great title to your blog post as it caught my attention right away! It's entries like this that make ActiveRain a great read.

Cheers,

Rich

The bargain hunters are always trying to squeeze agents out of the deal to save a few dollars. I'm finding more and more that those people end up using an agent because they realize the complexity of inspections, disclosures, and negotiations are worth the expense.

Great post. They'll eventually get it.

Great post and very true. Thanks :)

It makes no sense not to get yourself a buyers agent in todays complicated world of real estate. Buyers agents are worth their knowledge in gold especially as most sellers pay the commission. Research is one thing, buying is another.

Buyers today, and sellers are not aware of the minor miracles we perform for each sale.

I don't know how buyers come up with the mindset that if they are not working with an agent that it entitles them to a commission. You are not a licensed agent, you are buyer representing yourself and nothing more.

Greast article. Worth a re=blog in my book. Thanks! Sally

Ann - Good stuff here. It's not as easy as some buyers would like to believe. :) With regard to the kitchen remodel, I'm not sure if you've ever seen "Renovation Realities" on TV, but many of those folks probably wish they had also hired professionals.

I always remind my buyers that shopping for the home is the easy part, and yes all of the technology available today has made that part of my job much easier, but once we write the offer is when the real work begins. Most buyers and sellers think that Realtors just hop in cars and show houses all day, that is the part of the day where we get to take a deep breath and relax before the real work begins.

NOT everybody IS a do-it-yourselfer. And even the ones who are often want an agent to handle the deal- we pay people to do things that we COULD do ourselves, because they can do it quicker and easier and they have the right tools.

Great post Ann! In today's environment of everything at your fingertips, too many people lose sight of the process and the true value a realtor brings to the table.

Ann - That's a perfect example of why buyer's need to work with an agent. So many of them think they're saving on the commission when in fact the listing agent is now getting both ends.

Ann--Thanks for the great post. Maybe we should list every last detail of what we actually provide--that would bowl them over!

Smart people do dumb things...I sold my neighbors home in June. He (former shoe store owner) and his wife (an RN) moved about 150 miles in with her mom and dad (way out in the country). I told them if they found a home that was not listed (not unusual in rural Nebraska) let me know and I would come out and write the contract.

They found a house for sale by owner in late July...took out my contract from when I sold their home in June...rewrote it using only parts of the highlights of my regular contract...they took out the earnest money contingency clause if they couldn't get loan approval...gave the seller $1,000 EM...and then all the small town banks in the area said they could not loan on sellers property because it had so many different lots and buldings, they could not do a residential type loan... Smart people do dumb things. Bye Bye grand and back to square one for them.

Hi Ann, as others have said, you did hit the nail on the head. I have an example of a time when the buyers actually came to this realization themselves. I helped out a colleague by covering a showing appointment for one of her listings. As we walked down the hall to the condo unit, the buyers suddenly blurted out "we wish we had began using an agent when we started the process months ago." Working with an agent focused their search and provided them with a more productive experience. They said that their opinion changed so much that they now make sure to recommend that their friends and family always use a Realtor instead of trying to buy or sell on their own.

All these comments are awesome! I'm going to link to this post from my website, and preserve this information for all to see in the future. I've learned a ton of new arguments for working with an agent from all the comments. Thanks, everyone, and keep 'em coming!

You said it girlfriend...I have nothing to add...well maybe a couple of things...but you'll cover them in the next post I've got a feeling. Thanks for taking the time to educate.

You know, it really doesn't bother me. Either the do-it-yourselfers will succeed or they'll fail. If they succeed--unlikely but possible--more power to them. If they keep failing, they'll eventually turn to a Realtor.

Another comment above compared the do-it-yourselfer to Harry Homeowner doing repairs. Good analogy. Or, I'd compare it to someone working on their car--trying to do a somewhat complicated task like a transmission rebuild or a full brake job. There are some folks who can do it, but many/most can't. And I'll tell you: mechanics love cars on which the owner has tried, unsuccessfully, to do some repair.

At least when someone tries to buy (or sell) a home on their own, it's usually not a case of life-or-death. On the other hand, if someone's done their own electrical wiring, or their own brake job, and they've muffed it, then it really can be a matter of life or death.

And there are lots of folks out there who are just convinced that they're right. Until they try it themselves. That's the only way some of them learn. So, let them.

Ann - We tell our quote unquote clients this all the time.... I too have nothing to add... Point taken very well written and I am re-blogging... Thanks for putting it so succinctly...

Thanks for the good post today. It's appreciated.

Patricia/Seacoast NH

Great post. I agree. We offer value that is not easy for our clients to grasp but its there.

very good point. Would you want to work with an agent who KNEW what you wanted to buy in your price range and get you the best possible deal? Probaly. And, buyers don't pay the commission, duh.

There is so much information for the buyer to look at on the internet. I do question if they know which information is fact and which is fiction? Do they make their offer based on a Zillow zestimate or do they want a comparative market analysis, done by a professional who is looking out for their best interests.

Representing both the seller and the buyer is a fine line to walk. Do both parties get treated equal or does the seller get special treatment from the listing agent? If I were a buyer I would want someone looking out for my best interests and trying to get me the best price and terms. I think that the buyers lose the agent commission concessions during the negotiations anyways.

There is a lot more to making one of your largest financial investments than just finding a house you like.

All true, not to mention that buyer doesn't pay for personalized service and expertise. Why drive when you can be driven?

that's a great question...

how's that e and o insurance working for you?

who you gonna sue?

what if you knew you'd lose 5k by doing it yourself?

AUG

2010

What a great post. Buyers really do need a REALTOR® when searching for a new home.

Buyers believe me when I tell them the need me when over 70% of the houses they really like are already under contract. I provide them with fresh, pertinent information every time I do a search from my state's MLS. I also know more about the area statistically than Realtor.com or Zillow will ever know :o)

Hi Ann~ I think part of the problem is that we make it look so easy. They just don't understand all that goes into it.

Third party negotiations yield best results. What about inspections? How mad is a buyer going to be when they realize they didn't require a Seller's Disclosure of the property and/or didn't do a proper inspection, then they find termites or that the air compressor is bad?

I think our industry needs to educate the general public better about exactly what we do. Until they're better informed, many will think that we are simply door openers.

This is awesome!! I enjoyed this as I can just picture some of the people being so proud they found it on their own, but with an agent to represent them, it could have been found faster!!

As long as a buyer realizes he is hiring an amateur...

Ann, you have hit a really good point on this blog. There are so many pitfall one can encounter when buying a house, one really needs the local expert Realtor to represent them. I'm going re-blog this for my Ct. associates ~ DAve

LOL, Mozzletov: here is a congruent excert form my top ten objections guide:

Why can’t I do what you are saying without you? I am a do-it-yourselfer:

This need not be a hot-potato issue: people who try to do everything by themselves to save overhead simply fail: ask yourself these questions: • Would you represent yourself in court? • Would you operate on yourself? • Can you grovel and blow your own horn at the same time? The obvious answer to all three is NO: so why is it that people try to catch up with online marketing experts and over 20 years of experience...LMAO

As a buyer, my thoughts after reading the blog and all the comments:

#9 "Buyers Agent commission would have been paid by the Seller"

#64 "And buyers don't pay the commission, duh"

Isn't the money coming from the Buyer to the Seller? If there is no buyer is there any money? (really want to add a Duh here) Are there multiple buyers for most properties out there so you can dismiss ones you don't like?

#17 "The listing agent will keep ALL the commission. It's the same to the seller and the agreement is between the seller and the listing BROKERAGE, not the seller, listing agent and unlicensed buyer..... now beat it" Really? Telling a buyer to get lost is a bit over the top. And is it in the Seller's best interest?

Why is this scenario not viable? No buyers agent. Offer is made at a lower amount, with explanation of 4% total commission instead of 6%. The selling agent/broker are better off, the buyer really does pay a lower price and the seller is a few hundred dollars better off with a more competitive price to actually sell the house.

Some numbers: $300,000 house - offer made at $294,000. $6,000 real dollars less cost to the buyer. 4% commission to selling side ($11,760) instead of 3% on $300,000 ($9,000). Seller nets $282,240, which is $240 more than $282,000 on 6% commission at $300,000. The agent/broker are both actually better off (30% more commission dollars than sharing a commission) than the seller (maybe the 4% should be 3.5%)

Or would you not present the offer that way and double dip? Wouldn't seem to be in the best interest of the client to take 6% ($17,640) on the $294,000 - netting the seller $276,360 à$5,880 less. Then it is the sellers money since the buyers offer terms were changed. And does not seem in the sellers best interest.

Back to #17 - Yes, it does change the original agreement. Amendments happen all the time to signed contracts given changing circumstances. Final result, house sold, win for buyer (lower price), win for seller (house sold with a few extra dollars) and selling agent/broker win with 30% more commission money.

Why is this not a Win/Win/Win situation for those involved? Or would you rather "stand firm" and not complete the sale with more money in your pocket because you want to potentially double dip even though it hurts the seller?

#25 has a good perspective - real estate is not brain surgery or dentistry or IRS audit... Some people are able to handle the process themselves - some can't. Do you choose not to work with them or explain it to the seller and let the seller make the choice?

#58 also has good points. Let them learn. Or help them learn so maybe they turn to you in their next transaction. Or give you a referral rather than belittling us which I see throughout many of the blog comments.

#46 "I don't know how buyers come up with the mindset that if they are not working with an agent that it entitles them to a commission." Perhaps buyers don't see why sellers have to pay a full commission and have a higher selling price. Are you saying the full commission should be selling agent even though it was meant to be split. Seems greedy.

#75 "As long as a buyer realizes he is hiring an amateur". Another take on the attorney joke about Attorney representing himself having a fool for a client. Part of the issue is there are amateur real estate agents. An amateur won the World Series of Poker a few years ago....

Again, my thoughts as a potential buyer. Thanks for your time and hopefully you will consider another perspective. This is anonymous - after reading some of the caustic comments (not just here) I choose not to provide an email or name. I'm going to take 17's advice and "beat it now"

People skills unique to the emotional roller coaster of listing, marketing, selling real estate means a trained professional to help steer the process and avoid land mines, quick sand will never go out of style. More on line resources to get the details of the property out helps the process and can free up the broker if tons of images, real full motion video, details on the listing and community salt and pepper the internet for the buyer to glean, digest. But the offers, legal angle, logistics of domino real estate deals, possession, and when screw ups happen perspective on do this, or do that guidance needs one captain leading the way. It's all they do day in and out. To sheperd folks to a closing.

Great blog Ann. Tough topic and good discussion.

SEP

2010

Thanks Ann - Enjoyed the post and some of the comments-Going to reblog this great information.

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Ann O'Connell

Boulder, CO

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Real estate agent at Pedal to Properties

Office Phone: (303) 497-0633

Cell Phone: (720) 239-2537

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