Why Hire A Real Estate Agent?

If you are buying a home for the very first time, maybe taking advantage of a first time home buyer benefits (which you should!), or selling your home you've been in for awhile, you might be thinking why should I work with a real estate agent?

A great and totally fair question! It's no secrete, and if it was well the cats out of the bag, you don't legally NEED a Real Estate agent to buy or sell home (in most cases). There I said it! Much to the dismay of some of my colleagues and to the relief of your neighbor  who just put a For Sale By Owner sign in his lot across the street.

Even though you don't technically NEED a real estate agent, I want to give you three things to consider BEFORE you decide if hiring an agent is your best move. I know you're thinking this is my little sale spiel on why agents are the best, blah blah blah. Honestly, we are, but more importantly an INFORMED buyer or seller is a GOOD buyer or seller. When you have the knowledge and understanding of what agents do, and don't do, this will only HELP in your conversations, negotiations and decision making! So no sales pitch, I promise, just good ole information.

ONE: More Money in Your Pocket

That's right! MORE money, not less, at the end of the day in your pocket. According to a 2020 National Association of Realtors study, For Sale by Owner (FSBO) homes sold for, on average, 11% higher than the average agent assisted home. Like much of 2020, this was odd and lower than usual, in 2019 FSBO homes sold for, on average, 40% higher than the average agent assisted home! 

But what about all that commission? First of all it depends if you are the buyer or seller, depending on you state, region or sometimes the market, will determine who pays the commission. Now, there is no 'going rate' or fixed price for a buying or listing agent. This may very and is due to change but statistically you can expect to pay about 6% in total commissions! I'm in Boise, Idaho and here usually the seller pays the commission for BOTH agents. If you do decide to represent yourself and not pay a listing agent the vast majority of the time you will still have to pay compensation for the buyers agent (3%). All of this might sound like too much commission and way too steep… unless you do the math!

Let's assume we stay at the modest 11% 2020 increase in sales price from FSBO's vs Agent Assisted home sale, and run the numbers on a $300,000 home.

FSBO home sale: 

Price: $300,000 - $9,000 (3% buyer’s agent commission) = $291,000

Agent Assisted home sale: 

Price: $333,000 (11% with agent bump) - $19,980 (6% buyer AND listing agent commission) = $313,020

Net Gain from hiring an agent: +$22,020

That's 20 grand in your pocket just for having someone in your corner who knows that they are doing. Also, a little side note, everyone's doing it. Almost 90% of homes bought and sold last year utilized an agent, just saying!

TWO: Agents know what they are doing 

(Most) Real Estate Agents know what they are doing! We are the experts. Agents look at houses ALL DAY LONG. We are going to recognize the good deals from the bad, consider the market, the school district, crime rates, location; and let you worry if your 70 inch will have to be wall mounted or sit on the entertainment center.

Let an agent do the heavy lifting, we are familiar with that 12 page purchase agreement and can spot red flags in contracts from a mile away. We have seen a lot of house and are most likely going to notice that sinking roof, water damage, furnace issue or mold build up much sooner than you.

Agents can run real time market analysis (CMA's) on ANY property you are considering. Whether you are buying or selling, utilizing an agent with access to your local Multiple Listing Service (MLS) is the only sure fire way to ensure your price (buying or selling) point is going to be competitive. Unless, you want to rely on your BFF who is CONVINCED your house isn’t worth a penny more than theirs…

 THREE: Marketing!

As a Real Estate professional listing a home is our bread and butter. Part of that "crazy" commission, we outlined above, goes to cover the cost of our superior marketing. We are going to tell everyone in our network about your home, post your home on various listing sites (we're talking Zillow, we're talking Realtor.com, we're talking your local MLS!) all over the web, with top of the line photos/videos/virtual walk throughs. We'll sit and run open houses, screen buyers, promote with signage, knock on neighbors doors, do whatever we need to get your home sold!

That marketing advantage doesn't end with only listing your home, agents will put that to work on the buying side as well. We've built up a network of agents, real estate professionals and community members to inform us of upcoming sales, sometimes before they even hit the market! We'll be the first to know of new listings, first to show you around, unlock doors, make that significant connection with a seller and their agent giving you the upper hand in any transaction.

Wrap it up

You don't technically NEED an agent, but if you want more money in your pocket, a professional with your best in mind and a marketing genius who knows how to buy and sell homes, it might be your best bet. Do your research, know what you're looking for, and don't settle for a decent agent if you decide to use one, you are paying them for a reason! Maybe that was a little salesy…  

Stay tuned for more, comment below or follow along. Take it easy!