According to NAR 87% of buyers purchased their home through a real estate agent or broker which has steadily increased from 69% in 2001.
92% of sellers use a real estate agent when they sell and only 8 percent sold privately.
Based on these numbers it is easy to see why a buyer or seller needs to have a professional advocate working on their behalf to protect their best interest in a real estate deal.
For most we are talking about the biggest financial transaction of a person’s life and one of the most contractually intensive events they will ever participate in.
Given the magnitude of what we are talking about when it comes to buying and selling a personal property combined with the statistically stacked against you fact that when you buy or sell your home the other side of the transaction will have professional, exclusive representation through some form of agency agreement. It would be foolish to buy or sell without some type of professional representation.
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Just from a point of negotiation it is beneficial to have someone do the heavy lifting of negotiating key elements that transpire over the span of the average real estate deal. Take it from me it can get emotional when negotiating the finer details of a real estate offer.
I have helped numerous people on both sides of the transaction over the last 20 years and through investing in real estate and having several relocation’s under my belt, I have a unique perspective on how emotional a real estate transaction can get. I understand from personal experience how easy it is to allow emotions to influence the decision-making process associated with a real estate deal.
It is easy to see why emotions can sometimes run high when you consider it is for most people the largest financial and contractually complicated event they will encounter in their life.
The emotional element combined with the finer details of the contract and negotiation phase of the deal and the financial ramifications represent numerous challenges and pitfalls that the average home buyer or seller will find difficult to navigate without professional representation. Especially if they are buying or selling to someone who is represented by a licensed professional.
Think of it this way, would you really consider defending yourself in court without an attorney if you were wrongfully accused of a crime you did not commit? Imagine how crazy that sounds right?
Of the 13% of buyers and the 8% of unrepresented sellers in NAR’s statistics it does not say how many of those people lose money by not being represented but consider this article published by NAR July 9, 2018. Click the link to read the article: http://bit.ly/2LHfaJ0
In the article Research Survey Analyst Amanda Riggs states ““As it turns out, FSBO’s make less money on their home sales than buyers who work with a real estate agent. According to the report, the median selling price for all FSBO homes was $190,000 last year. When the buyer knew the seller in FSBO sales, the number plunges to the median selling price of $160,300. For homes sold with the assistance of an agent, the median selling price was $250,000 ̶ that’s $60,000-90,000 more for the typical home sale.” (Note: Home sale prices vary according to many factors, including the type of home, location, a city’s cost of living, and for example, whether a home is sold at “arm’s length”).”
The fact that a FSBO who sold to someone they knew cost them nearly $30k in value illustrates why I am so emphatic about being represented by a professional while entering into a real estate transaction and having up to date information with which to base your decisions on.
Representation is key to keeping emotions in check and providing you with the best overall chances to achieve the best financial outcome when it comes to your next real estate transaction.
Having professional representation in a real estate transaction can help you by providing up to date pertinent information on the market and real estate trends and provide an emotional buffer when it comes time to negotiate the finer details of a real estate offer and contract.
Having an experienced licensee represent you during the purchase or sale of your home could potentially save you $100’s if not $1000’s of dollars during the negotiations of the sale by helping you keep your emotions in check and will save you from agreeing to terms that you might regret later.
For those of you who despise real estate agents and look at them as no more than a shady used car salesman chasing commissions and stealing your hard-earned equity, consider how much equity you could lose by selling yourself.
If that doesn’t scare, you into using a licensed professional then I wish you good luck and admire your courage.
However, I would like to point out that you have alternatives to paying a commission and still retain professional representation.
In most markets you can find discounted real estate services. There are companies, brokers, and agents out there who provide various real estate services for flat fee or hourly compensation, so you don’t have to pay a commission when you sell.
Simply google “discount real estate broker” or “discount real estate services” and chances are you will find someone.
But beware not all providers listed when you do a google search are equal and you will most likely have to make a few phone calls to find a professional you are comfortable with.
For example, many of the google listed discount services are National companies that will sell your name to a local professional as a lead or will not provide the service promised.
I describe some of these pitfalls in a post on my blog about flat fee real estate services you can read it here by following this link: https://johngonline.com/flatfeerealestate/
Hopefully this article and resources have convinced you that going into a residential real estate transaction without professional representation by a licensed broker/agent when you buy or sell your next home is a costly mistake and that you will consider hiring a licensed professional to help you when you do buy or sell your next home.
An additional resource and further evidence of why it is so important to be represented when you buy our sell your next Tucson home. Follow the link to a video and watch from the 44 sec mark to about five and a half minutes in to see why an ibuyer may not be the best option. Click here to watch the video: https://thenationalrealestatepost.com/ibuyer-whisperer-says-ibuyers-are-okay/