When buying or selling a home, a common misconception is that the best way to save money is to avoid using a REALTOR®. Just the opposite can be true, however. Often, using a REALTOR® can actually save you money.
How it works when buying a home
If you are buying a home, there really is no benefit to not using a REALTOR®. REALTORS® typically get paid commission -- a percentage of the sales price of the home. The buyer does not pay the commission though. The seller does. The REALTOR® works for the buyer, helping them find a home and negotiate the sale, including the legal aspects if a purchase takes place. If a home buyer chooses not to use a REALTOR®, then s/he must do all of the legwork him/herself to find homes to look at, plus the buyer has the added headache of making sure all of the contracts are valid, etc. For the buyer, a REALTOR® does provide a lot of service, at no cost to them. So, for the home buyer, there really is no advantage to avoiding a REALTOR®.
Why it’s smart to use a REALTOR® when selling a home
Although many accept that this is true for the buyer, it is a different story for the seller. A seller must pay the REALTOR® a commission that is usually between 5 and 6 percent of the sales price of the home. This commission is then split between the buying and selling agents. In a hot market, a home can almost sell itself. Is it really worth it to pay a REALTOR® $12,000 on a $200,000 home that sells in a matter of days?
The answer is yes, in many cases. The seller who goes the for-sale-by-owner route also opts for a lot of headaches that a REALTOR® usually takes care of for them. For example, advertising. When using a REALTOR®, the home gets listed in the MLS so that hundreds of other REALTORS® also see the home and can show it to potential buyers. Those who list their house for-sale-by-owner are usually not able to list their home on the MLS. When it comes to advertising an open house, the for-sale-by-owner seller has to pay for the ad out-of-pocket while the REALTOR® takes care of it for his/her clients. If there is any problem with an appraisal, a REALTOR® has more potential to get the situation worked out than someone who has no relationship with the appraiser and no expertise for that situation.
Save time and enjoy peace of mind
Time is also very valuable. When selling a house on his or her own, the seller has to be home to let people look at the house. If using a REALTOR®, a lockbox with a key is placed on the house so that no one has to be home for it to be looked at. Instead, the REALTOR® representing the potential buyer calls the agency and gets the code for the lockbox. This can be safer as well as convenient. Instead of the seller having to show strangers through the home, a professional accompanies them.
Finally, having a REALTOR® saves time when it comes to closing. With the for-sale-by-owner option, the seller has to find appropriate contracts and find legal representation for the closing. When using a REALTOR®, s/he takes care of all of these aspects. It is far easier to just show up at closing knowing that everything has been taken care of for you.
For some people, it still may be preferable to choose for-sale-by-owner. For someone who knows a lot about the legal aspect of buying or selling homes, or someone who has a home that can sell itself, not using a REALTOR® may be the best option. However, for most people, using a REALTOR® saves time and money in the end.
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