Few words about benefits achieved from involving the real estate agent.
There’re conceptually different goals set during the real estate deal from a seller perspective and the buyer’s perspective: one desires to get the property at the lower price, while another strives to sell at the highest one. Despite the fact of such contradicting there’s still a common goal for both – to make the deal completed. For such a case the side may significantly benefit if they can find a professional agent for assistance during the transaction.
Let’s see how the agent’s involvement can influence the deal outcome from the seller’s perspective and buyers from the following study prepared by Signature Homes professionals.
1. Financial Side of the Deal
If you plan to sell the property and think that you can do it on your own (so-called FSBO deals) and save some money on commissions you’re right, but only partially. First of all, because the majority of property sold without an agent’s involvement lost in price up to 30%, which is significant (according to data provided in 2017).
The second of all, you probably will be still required to pay in case the buyer found your property with the help of his agent. Because usually the total commission paid by the seller is divided between the listing agent and buyer’s representative. Although the amount of commission will be lower than in the case of having a personal agent by your side, your interests will be protected by nobody. The decision regarding is it the proper way to save money is up to you.
From the buyer’s perspective involving the agent usually costs nothing, because commissions and fees are usually covered by the seller. Although there’re always weak chances that the seller would refuse to pay for your agent if it matters to you can always check other options and other objects for sale with more wise sellers.
2. Tricky Details
It’s impossible to be competent in all spheres at once, thus chances that it would be difficult to check all the details described in a transaction agreement are high. First of all, because the average agreement has at least ten pages except for addendums and attachments. Second of all, because some juridical aspects can be complicated and not clear to the average client.
Considering the necessity to clearly understand what you acknowledge with and what aspects the agreement brings without matter are you a buyer or a vice versa a seller you might need a third party competent help, which can be found from the side of agents.
First of all, the agent may work with similar documents for years and can easily explain each clause and its consequences. Another reason is that your agent is always by your side and serves for protecting your interests, so you can be sure you’ll avoid some unpleasant obligations that appeared with the tricky agreement. And the last one reason to hire a professional in a real estate firm is that an attempt to save some money on commission may cost you double payments in case of tricks with an agreement or simple mistakes made by you without having appropriate experience.
Still not sure? Let’s see an example, where buyers make an offer on a certain home, but the final decision depends on the mortgage committee conclusion, which is not still received. The mortgage loan is the only way the buyer can enter the deal, no other options to purchase a property exists for him. In case the respective clause, which allows the buyer to go out from the deal safely without lost in case of negative response from the mortgage committee, will be omitted from the offer, the buyer will be obligated to buy a property (and we remember he cannot do it) or pay a fee to the seller.
As an alternative option, you can just apply for broker’s services for a one-time agreement review and respective consultancy received to avoid unpleasant mistakes and respective losses.
3. Privacy Protection, Confidentiality, and Fiduciary Duty
The key pint to attracting an agent to the deal is to have a person who’ll be absolutely loyal to you and will protect your interests in any part of the transaction. This point is explained by the fiduciary duty, which appears at a legal level when you start to cooperate with an agent and obligates the agent to put the client’s interests in the first place.
Another side of the fiduciary duty is an obligation to keep any data related to the deal and client confidentiality. Thus, the question of whether you will be ok with trusting information to the seller acting on the FSBO-basis, which is not obligated to keep your data confident? The same is applicable to the listing agent, which bounded by fiduciary duty only in relation to the seller. At the same time the agent, who will work on your behalf will filter requested information and sort it by relevance to the deal protecting you from any tricks.
All in all, if you suffered from the action of the listing agent, like for example, your confidential information was disclosed or some material facts regarding the deal were hidden or not properly disclosed to you, you can send the complaint to the professional association of the agents (like NAR). But in case the seller is FSBO you’ll not have places to recourse. All of this can be prevented by hiring an agent, who will protect you and your interests through the deal.
4. The Expertise Matters
When it comes to buying a house it’s common the image of the perfect place of living already exists with the number of baths, bedrooms, and other must-haves. And it’s also very common when there’re several houses, which may satisfy the majority of the buyer’s criteria, so the final choice should be made and the desired goal will be achieved.
In such a case, when the little step separates the client from so desirable house and the thoughts of having it may obscure other thoughts the agent can be very useful. Because he can independently check the house regarding any malfunctions and serious disadvantages according to his expertise and experience, which is impossible to do is just an average client.
Such expertise can either save you from significant investments for repairs or be the negotiating factor for lowering the price. All in all, it can also save you from buying a dangerous place of living which shouldn’t be bought at all.
From the seller’s perspective, the agent can easily help with the market price identification and saving the object’s price from unnecessary negotiations regarding price lowering. Having appropriate experience and expertise, similar deals closed recently and knowledge regarding market prices, agents can make you deal easy and beneficial.
Additionally, agents can use their knowledge during the preparation of researches regarding the object, its location, the objects of infrastructure and even criminal statistics of the neighborhood. This can be very useful for sellers, who are able to represent the object in a more positive way and for buyers who should consider the variety of factors selecting the place for life.
5. Agent’s Superpower
The majority of people, who are involved in real estate transactions don’t have experience in negotiations, in contradiction to the real estate agent, who deals with that almost every day. Hence, the fiduciary responsibility of the hired agents gives this superpower of negotiating skills to your command and the agent should apply it in order to make the deal’s conditions the most comfortable for you without matter are you a seller or want to purchase the property.
Except for experience and even own negotiating methodic applied in different situations the real estate agent is able to stay independent and far from emotions, so the decisions they propose will be the most objective and will consider all mattering factors.
The wise though provided by Henry Ford can clearly illustrate the dilemma regarding hiring the real estate agent. The approximate meaning was that hiring the people, who’re smarter than you in specific situations, means that you are smarter than them. The main point comes down to identification of those specific situations, when you may require a qualified help and attract professionals who can provide you with it.