Sometimes when a homeowner is selling their home, they see dollar signs and consider ‘saving’ the 3%-6% commission paid to a realtor and try to sell it on their own, aka For Sale By Owner or FSBO!
But in reality is this way of thinking actually pennywise and dollar foolish?
In other words does the value-added provided by a great realtor result in what it is that the homeowner truly desires…The quickest possible sale at the highest possible price that results in the greatest amount of money post-sale in the home sellers pocket!
From my experience as a homebuyer back in the mid-1990’s, a process that took about two-years, I would say that utilizing an agent is absolutely in the home sellers best interest and from personal observation and participation here’s one simple reason why.
Potential homebuyers, even back then in the pre-internet age, know that when a homeowner is selling FSBO they will not be paying an agent or broker a commission.
The net result therefore, is that most potential buyers making an offer will adjust that offer down the 4% or 6%.
So what are some of things that a real estate agent does to earn their commission? From an article at Realtor.com…
8 Things Realtors Do to Earn Their Keep By Craig Donofrio
So if you’re wondering what agents do to earn their paycheck, we’ve compiled a list of things they do when you’re not watching (or should be doing—if they’re not, maybe you need a different agent!).
They shop property online
Don’t we all? And yet, their real estate research goes beyond oohing and ahhing over a few photos on a Saturday night. Darbi McGlone, a Realtor® with Jim Talbot Realty in Baton Rouge, LA, estimates she spends about two hours each day researching potential properties.
“This could include looking up flood zones, previewing the homes for out-of-state clients, or any number of specific things,” she says.
Plus, listings come and go fast in the real estate world, so agents need to check their multiple listing service database constantly, or else they’ll miss out. Sometimes the process of matching up properties with clients can take a very long time.
“I have a client who wants a Mid-Century Modern house in Carlsbad, but there aren’t many there,” says Rachel Collins Friedman, a Realtor with Sotheby’s International Realty in San Diego, CA. That means that she’s been searching the database regularly for that particular kind of property for three years (here’s hoping all that patience pays off).
They go prospecting
Of course, there’s nothing like seeing a house in all its brick-and-mortar glory, which is why most Realtors worth their salt spend tons of time driving around checking out new listings. In Friedman’s San Diego area, they call it “caravan day.”
“It’s a good way to preview properties, and it’s a good time to network with other agents and talk up your listing,” she says.
They attend pitch sessions
Agents don’t spend all their time sizing up homes. According to Friedman, they also spend tons of face time with other pros at pitch sessions—gatherings of local agents at cafes where they swap listing info in order to spread the word about your property if you’re selling, or to find the house that checks every box on your wish list if you’re buying.
They spend their own money on marketing
In addition to not getting paid until a deal is done, selling agents also spend their own money on marketing: magazine and newspaper ads, fliers, hiring a photographer, glossy prints, and premium placements on listing sites.
“Agents can spend thousands marketing a property,” says Friedman.
They write up offers and counteroffers
Offers and counteroffers are an extremely important part of the transaction, as they can save or net you thousands of dollars on a sale. Yet getting to the right price requires written offers and counteroffers every step of the way.
“It’s time-consuming to be writing them up, explaining to the client how to counteroffer and the ways to do so, and just keeping track of it all,” Friedman says.
They stick around for inspections
You might not be present when it’s inspection time, but a good agent will be. This gives the agent an immediate knowledge of what’s going on. Anything from termites to an iffy foundation can be relayed to the buyer immediately, according to Friedman. McGlone estimates inspections take roughly two hours.
They smooth bumps in the road
Not every sale goes smoothly—buyers and sellers get difficult all the time—but good agents try to shield their clients from the high drama unless there’s a reason to fill them in.
“It’s called putting out fires,” says McGlone. “It’s just fixing issues that a lot of times buyers and sellers never needed to be made aware of.”
They keep you calm when the pressure’s on
Good agents don’t just hand you a house. They can also act as a therapist, making your sale much less stressful.
“People get emotional. You have to be a problem-solver and keep a positive approach and come up with a positive solution,” Friedman says. “It might not take a lot of time, but it takes emotional energy.”
Tell that to your therapist.
Article written by Hallmark Abstract President Michael Haltman who also serves as Board Chair of the combat veterans 501(c)(3) Heroes To Heroes Foundation.
- Who is your underwriter?
- What is the claims experience of your title insurance provider?
- Do you know whether the non-title insurance premium fees you are paying are fair and reasonable?