Buying or selling a home can be an incredibly stressful experience. The world of real estate brings forth both emotional and financial considerations, leaving many potential buyers and sellers wondering how to navigate the process best.
One of the common debate points is whether or not buyers and sellers should involve a realtor. If you are wondering which path forward is right for you, consider these positive and negative sides of hiring a realtor.
Pro 1: Market Expertise and Process Knowledge
The primary benefit of hiring a realtor is access to knowledge and expertise. A realtor can tell you what to expect in the local buying home process, including the average pricing, average time spent on the market, and what to expect in terms of bidding and negotiations.
From the seller’s perspective, a realtor can also highlight what improvements to make to your home to get a better ROI. Your realtor will also guide you throughout the process, using their knowledge of the legalities and terminology in real estate transactions.
Making mistakes when buying or selling a home can be financially devastating; now isn’t the time to take risks.
Pro 2: Less Chance of Costly Mistakes
Selling a home goes beyond staging and setting the right price to attract qualified buyers. Similarly, buying a home goes beyond attending open houses and putting in a bid.
There is a ton of highly detailed, tedious paperwork that goes along with the process. Instead of watching out for the fine print, you’ll need to treat every single line like fine print.
As mentioned previously, one of the most compelling reasons for hiring a realtor is avoiding costly mistakes. They’ll be able to crunch the numbers for you and give you a more realistic picture of what you can afford. Keep in mind that the online calculators and free tools are for a rough idea of what you’ll pay for a home and aren’t meant to be used verbatim.
If you make a mistake in your calculations and buy a house that is too expensive or sign off on a sale that doesn’t cover your existing mortgage and closing costs, you are in big trouble. You are in the kind of trouble that stays with you for years.
Not only is a realtor less likely to lead you into one of these mistakes, but you’ll be covered if they do. That sense of security is well worth its weight in gold.
Pro 3: Less Stress and Better Time Management
When buying or selling a home, there is a lot of research, paperwork, and back-and-forth communications.
Hiring a realtor allows you to delegate this tedious process to someone else so that you can focus on the other aspects of your life. Even without handling the transaction side of your home purchase or sale, you’ll still be busy with viewings, cleanings, etc.
Working with a realtor allows for better time management and less stress throughout the process. In many cases, this feature is well worth the opportunity cost of paying an agent. That being said, choosing the right agent is integral when considering this aspect of the process.
There are many real estate agents who themselves lack effective time management skills. This pitfall can lead to communication gaps and frustration during a stressful process. It’s important to look for an agent who comes well recommended.
Don’t hesitate to ask who else they have working on their teams, such as a personal assistant or an office manager for several realtors at one agency.
Pro 4: Potential for Better Negotiations and Pricing
Realtors are skilled in navigating the negotiation process. They’ll be able to help you set a competitive price when selling and negotiate on your behalf.
When purchasing a home, your realtor will help you negotiate and develop contingencies to make the process beneficial based on your lifestyle, needs, and goals.
In addition to having the market knowledge on their side, a realtor has the benefit of taking a purely analytical approach to negotiations. In other words, they have no true emotional attachment to the outcome.
Conversely, homeowners are more likely to experience panic when presented with an offer that has a quick turnaround or make an unrealistic counter offer based on a sentimental attachment to the home. A realtor plays the special role of talking you down when dealing with stressful negotiations to ensure you make the right call.
Just because you choose to move forward without a realtor doesn’t mean the buyer or seller you interact with will follow suit. In this scenario, you would be positioned against a skilled realtor when trying to negotiate a deal, making you less likely to get the best possible results.
Con 1: Extra Closing Costs
While the benefits of working with a realtor far outweigh the disadvantages, there are a few to consider.
The overarching downside to working with a realtor is the cost. If you enlist the services of a seller’s agent, you can expect to pay five to ten percent of your sales price in commissions.
Depending on your agreement, you could also be responsible for covering various marketing expenses, such as Facebook ads or video tours. There are several benefits to investing in high-quality marketing efforts, but you need to understand the additional costs before committing.
Buyers’ agents either take a portion of the seller’s commission or negotiate a fee that’s wrapped into the sale of the home. It is essential to understand what you are agreeing to when working with a buyers’ agent and read the fine print.
Con 2: Potential for Feeling Neglected
As mentioned before, if you end up working with a realtor who has poor client relations or time management skills, you could end up feeling neglected.
Many realtors will take on several clients at once without additional administrative support. This overbooking could lead to missed calls, poor communications, and missed opportunities to secure a deal.
Con 3: Broken Communication
Finally, working with a realtor essentially means adding an intermediary to communications rather than communicating directly. This extra person can slow down the communication process and result in mixed messaging.
Having a go-between isn’t necessarily a bad thing when negotiating a home purchase or sale. As mentioned previously, delegating these tasks to a skilled professional will save time and stress. However, if you are someone who needs control over the process, this aspect of working with a realtor could be a challenge.
Final Thoughts: Hiring a Realtor
Deciding whether or not to work with a realtor is a personal decision. In most cases, it makes more sense to invest in the skills and expertise of a reliable realtor to handle the purchase or sale of your home. This approach means less risk of costly mistakes and the potential for a higher return on investment.
However, if you’ve bought and sold a few homes already and have the capacity to manage the process, there are cost-saving considerations to handling the process yourself.
Even so, you’ll want to hire a lawyer to review all of the paperwork before signing. It is also worth meeting with your bank to ensure you understand exactly how much money you need to cover the mortgage.
Take some time to weigh the pros and cons, and determine which approach is right for you.
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Wendy Dessler is a super-connector who helps businesses find their audience online through outreach, partnerships, and networking. She frequently writes about the latest advancements in digital marketing and focuses her efforts on developing customized blogger outreach plans depending on the industry and competition.