Who needs a real estate agent?

By
Managing Real Estate Broker with Flexit Realty "Flexible Home Selling Solutions"

I was discussing the marketing of real estate with a client that feels he is on top of his game when it comes to real estate.  He is purchasing a home from one of my agents.  I filled in for the agent while he was on vacation out of state. 

This buyer had limited knowledge of customary issues and real estate is definitely not his game.  He is about as savvy as a stump when it comes to real estate.  That was evident in the first few minutes of our conversation.  This buyer was more interested in impressing me with his knowledge than finding out what he really needed to know.  

On the other hand I have met some very well versed buyers and sellers.  They have had real experience in real estate transactions flipping homes, building homes, buying investment properties and they use Realtors for their selling and purchases.  check list

What reasons do you think most people use a real estate agent? 

Here is a short list.

  • To make sure all the legal aspects of the transaction are covered properly.
  • To market to other Realtors on the MLS.
  • To take advantage of a Realtors experience and negotiating skills
  • To make sure the property is priced correctly for the market.
  • To maximize selling exposure with an effective proven marketing plan.
  • To Help buyers obtain financing and insure their best interests are maintained.
  • To review and control the transaction process for either the buyer or seller depending on whom being represented.
  • To maintain communication throughout the selling or buying process with the client.
  • Coordinate appointments and showings for buyers and sellers

The list can go on and on...but the reasons are personal to each buyer and seller yet they have a common goal.  They want to sell or buy real estate and need expert help in achieving their goal.

Having a agent do the work for you may seem costly when it comes time to pay them.  

BUT when there is a mistake in your sale or purchase....having a Realtor can save you thousands of dollars.

  •  Or when you buy the wrong property
  •  Selling for lower than market is willing to pay
  •  Paying more than you should in fees
  •  Not having the paperwork completed properly
  •  Being involved in a law-suit could prove to be much more costly than any fee an agent will charge
     for services.

throwing money away

So don't throw your money away just because you thought you would save a few bucks!

Other interesting facts about agent fees you may not know. 

  1. The typical transaction...the agent splits the fee 50/50 with the buying or selling broker...depending on which side of the transaction the agent represents. 
  2. The agent has marketing expenses, printing costs, newspaper, magazine ads, cable advertising costs, monthly Internet fees, monthly MLS fees, National dues, continuing education fees
  3. Transportation costs, just like you going to work, insurance only usually for a higher limit because the agent has to insure for passengers.
  4. Monthly brokerage fees

So the big number you see is not the agents to keep.  The agents keep a percentage after splitting off chunks of the fee to others just for the luxury of being in real estate.

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Rainer
6,744
Joe Keyes
Team One - Coldwell Banker Residential Brokerage - Hill AFB, UT

This is our drum beat, isn't it? I know I had no idea how much work it is before I started. I had the same ideas then, that I now have to explain was wrong. A large part of our job is education.

May 21, 2008 12:50 PM #1
Rainer
366,564
Dwight Puntigan
DRP Realty, LLC - Saint Peters, MO
Dwight Puntigan

I wish you wrote for our local newspaper here in St. Louis, Mo.

May 21, 2008 12:56 PM #2
Rainmaker
1,074,014
Gary White~Grand Rapids Home Selling Pro Call: 616-821-9375
Flexit Realty "Flexible Home Selling Solutions" - Grand Rapids, MI
Real Estate Services You can Trust!

Hi Joe, many people do not a good concept on the real estate profession and sometimes we do not help them understand.  Thanks for your comments Joe.

May 21, 2008 12:56 PM #3
Rainer
70,582
Matt Moxhay
Prudential Fox & Roach - Moorestown, NJ
Moorestown Real Estate

Gary- This posts represents what I had been mulling about for some time, but hadn't been able to put into words.  This is a great post and I've bookmarked it to come back to.

May 21, 2008 03:02 PM #4
Rainmaker
717,706
Ruthmarie Hicks
Keller Williams NY Realty - 120 Bloomingdale Road #101, White Plains NY 10605 - White Plains, NY

Excellent post...very hard to put those things into words.  I came into the business thinking the costs were absurd and that we could easily change them if we wanted to....oh boy did I change my tune fast.  There were so many hands in that commission check I couldn't believe it!  Between the E&O, the transaction fees, the franchise fees, my broker's cut, the other side's cut etc.  As a newer agent I generally see about 20% of that big check -even less sometimes. That's BEFORE taxes, advertising, gasoline, printing, and insurance. Plus this is high touch, high maintenance work.  A lot of hidden work.  Usually I have about 50+ emails - God only knows how many phone calls per deal. Also, right now, a lot of deals are not working and people are sitting in the fence.  It's a lot of work to pry them off.  That's more hours and you haven't even earned a penny.  If you add it all up,right now I walk away with about $15 an hour - WHEN THE DEAL WORKS.  I don't even want to talk about the hours spent when it doesn't.

May 21, 2008 03:31 PM #5
Rainmaker
173,450
Richard Glesser
North Country Appraisal Services - Gaylord, MI

Gary,

It amazes me when I appraise a FISBO home how unprepared the sellers are to complete the necessary steps to close the sale.  In today's environment, safety has got to be a major issue in marketing your own home.  Who in their right mind would not only open their home to undocumented strangers, but advertise to encourage anyone to walk through their home.  Especially in more urban areas I would believe this is extremely dangerous.

May 21, 2008 04:40 PM #6
Rainer
139,927
Kelly Sibilsky
Licensed Through Referral Connection, LTD. - Lake Zurich, IL

I don't believe that we would have seen the increase in FSBOs if we did not have several boom years of a seller's market. A real estate attorney that I know sold his home himself a few years back and later regretted it. He said it was a huge pain in the neck for him and his wife and that every potential buyer came in with a low offer, automatically reducing their offer by a perceived commission percentage that was being "saved" by the seller. In the end, he and his wife did all the work but did not save any money, and admitted to me that he should have hired a REALTOR. 

May 22, 2008 01:05 AM #7
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Rainmaker
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Gary White~Grand Rapids Home Selling Pro Call: 616-821-9375

Real Estate Services You can Trust!
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