The pros and cons of hiring a Realtor

When considering buying a home, you might look for ways to cut costs or avoid some of the hefty fees associated with real estate purchases. Finding the perfect location, building a mortgage loan and settling closing costs are expensive steps towards homeownership, leading to savvy buyers and sellers seeking out ways to save money and get the best possible deal.

Commission payments for real estate agents make up one of these expenses. Usually 6%-7% of the home’s sales price, these commissions can be a burden for sellers. Hiring a real estate agent is not required by law, but it is expensive, which may lead you to ask yourself, “Do I need a real estate agent?” Buyers do Not pay agent commissions in Florida. The Seller’s side pays the commission to the corroborating buyer’s agent.  On average, a For Sale by Owner (FSBO) sells for much less than one that is sold with a Realtor, this more than pays for the commission.

• FSBO homes sell for an average of 26% less than agented homes (median of $217,000 vs. $295,500).  Source

Selling a home is never an easy process, so before moving forward without a real estate agent, it’s important to understand the pros and cons of hiring a real estate agent and how managing a sale on your own could cost you even more down the line. Sellers wouldn’t want to have to deal with any possible litigation during or after the sale.

Navigating local regulations, state laws, negotiating prices and finding the perfect place for their clients makes these professionals the best resource you have for a successful home purchase.

What does a real estate agent do?

For both buyers and sellers, real estate agents bring know-how to the mortgage process. Housing market trends, local regulations and proper documentation are a mystery to typical buyers and sellers. Without a background in real estate, tackling a home sale without one of these experts on your team can quickly leave you overwhelmed.

Beyond knowledge of mortgage jargon and the loan process, real estate agents provide important services that help all parties get the most out of a complicated venture.

Both buyers and sellers will usually have their own agents, but the services provided for each of these parties differs.

Real estate agents for buyers

For buyers, a real estate agent helps narrow down options by establishing a price range and matching their clients to a property that suits their needs.

Once a prime location has been settled on, a buyer’s real estate agent will assist in negotiating the right offer. The offer is based on not only price, but other terms of the contract, such as inspection period and other contingencies. Recent comparable sales also factor into the equation. If the home may not appraise for what the buyer is willing to spend on the property, there may need to be an appraisal gap added. After attending the home inspection and communicating with the seller’s agent throughout the process, your real estate agent may be able to renegotiate the offer.

Finalizing a home sale is never as easy as signing a few documents. Settling a property’s closing costs is a detailed step, involving unexpected fees and last minute negotiations. It’s important to have a professional on hand who can navigate every aspect of closing and ensure the best possible arrangement for the buyer.

Real estate agents for sellers

For sellers, real estate agents play an important role in establishing the sales price of the home. With a deep understanding of the area’s history and current market trends, these agents are able to strategically price a home that will appeal to buyers while getting their client the maximum possible value.

Agents for sellers also have access to marketing tools that can help your property stand out in a crowded real estate market. Quality photographs, interesting listings and knowing where to invest in marketing for the home are essential in finding an interested buyer and getting the best possible offer. A seller’s real estate agent will know how to execute these marketing strategies and draw in attractive offers as a result. A Realtor also has access to other real estate agents, either through their own office, or region, that they can market to.  Working with a company such as Coldwell Banker exposes the property to a variety of avenues where the property is displayed to any potential buyers of other real estate agents.  Marketing is critical to get as many eyes on the property as possible to reach potential buyers.