When to use a Real Estate Agent, and when not to…
Most real-estate agents will tell you it is ALWAYS best to have an agent involved. Which makes sense (since the more Agents involved, the more they get paid) but it is not always true.
Here is my take: It depends on whether you are are the buyer or the seller and whether or not the home involved is a For Sale by Owner (FSBO) or not.
Here are a couple of common scenarios and whether or not you will benefit from having a full-commission agent on your side.
Anytime you are searching for homes (to buy) that currently listed on the MLS or by other agents you should absolutely have an agent on your side. The #1 reason is IT COSTS YOU NOTHING. Agent commissions are usually paid by the SELLER. When they decide to sell their home, they enter into an agreement with their Listing Agent to offer a 6% commission (normally) that will be split as 3% to the Listing Agent and 3% to the Buyer’s Agent. If, however, you approach the Listing agent directly without your own Agent / Broker involved, the Listing Agent normally gets to keep the entire 6% commission while you miss out on the benefit of having someone to represent your interests. They get paid double and you are left to negotiate your deal against an experienced real estate professional.
Since it doesn’t cost you anything, ALWAYS involve an Agent on your side when you are looking to buy something listed by another Agent. You will come away with a much better deal and experience—and you won’t pay a dime.
If, however, you looking at homes that are For Sale by Owner—whether or not to use an agent is debatable. Since the seller is not in an agreement to offer commissions, you may end up paying your agent out of your own pocket—so it may or may not make sense.
When selling your own, whether or not to involve an Agent depends on a couple of factors. Are you looking to get the absolute highest price, even if there are commissions involved? Or are you looking to save every possible penny and feel comfortable doing it on your own? Do you already have some potential buyers who might buy the home in a “hand-shake” transaction?
If looking to get the most exposure and the absolute highest price, definitely enlist an Agent and get it on the market and on the MLS. A good agent will add enough value to the transaction (through better exposure, more offers and a higher selling price) to cover the additional costs incurred.
So, if you decided to use an Agent, look through samples of their previous listings, find out how long that Agent’s listings have normally taken to sell (Days on Market), and how much those listings have actually sold for vs. the original listing price. (Just because one agent promises your home will sell for a higher price than some others, doesn’t necessarily mean they are a better option). If there is value to be added, let the Agent’s get involved and choose the one that works best for you.
If you are interested in talking through some of these scenarios and deciding on the absolute best option for you, we would love to talk. Give me a call. We would love to be involved in your next purchase or sale and know if we can add value to your transaction. And if we can’t, we will not be offended a bit.
All the best,
Jeremy
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