If you need to draw up a legal contract, you go to a lawyer. If you need to prepare a tax return for your business, you go to a certified public accountant. They’re all professionals who have the experience and technical knowledge needed to do the best job.
The same goes for home buying or selling. If you're in the market for a house or you're selling your own, the best decision is to go to a real estate professional who is a realtor. Here’s why.
What Is a Realtor?
A realtor is a licensed and experienced real estate agent who belongs to the National Association of REALTORS® (NAR). Realtors have a strict code of ethics and always put the interest of their clients first. Not every real estate agent is a REALTOR®.
Real estate agents work on commission only. They only get paid if the deal closes. The work is time-consuming and they can spend a lot of time and effort looking up houses for sale that meet their clients’ needs, taking clients to visit houses, negotiating, and all could go for nothing if the deal doesn't close.
An agent’s commission can range from 5 to 7 percent. A single agent does not get to keep all this commission. It must be split between the seller's agent and their broker and the buyer’s agent and their broker.
Many homeowners try to avoid paying real estate commissions by advertising their house as for sale by owner (FSBO). However, even if a homeowner is able to sell their house by themselves, they usually still pay a commission to the agent representing the buyer. The other problem is that when prospective home buyers see a house listed FSBO, without a listing agent, they know the homeowner doesn't intend to pay a commission, so they lower their offering price.
Reasons to Use a Realtor
Realtors look out for you because they have a strict code of ethics that requires them to put the needs of their client first. Your real estate agent can offer many benefits throughout the process of buying or selling a home, saving you a lot of hassle throughout the homebuying process.
Years of Experience and Knowledge
Real estate is full of acronyms and jargon, and realtors understand that lingo. They know that a 3B/2B with an EiK means a three-bedroom, two-bathroom house with an eat-in kitchen.
Real estate transactions require numerous forms, disclosures, reports and other legal and technical documents. Realtors can guide their clients through the administrative bureaucracy to close a deal without making costly mistakes or causing delays.
Extensive Searching Power
Although the internet has given everyone incredible access to listings of homes for sale, your realtor has even better information. A good real estate agent knows about even more listings, such as properties that are available, but not advertised.
A good local realtor knows the ins and outs of a specific neighborhood much better than a prospective homebuyer ever could.
Read More: What Does Agent Owner Mean in Real Estate Listings?
Experience With Negotiations
A real estate agent has had experience negotiating home sales over the years and has seen all the tactics that people use to move prices up or down. A homeowner gets involved in buying or selling a house every 5 or 10 years, while realtors do this every day. You don't want to be the amateur at the table; you want a professional on your side.
Because of their market knowledge, realtors know what the best price will be for their client. While homeowners can be emotional, realtors can remain detached when dealing with counteroffers and focus on getting the best deal for their client.
Extensive Network That Is Connected With Everyone
Realtors have a Rolodex with a go-to list of all the professions related to the real estate business. Their list includes home inspectors, real estate attorney practices, mortgage brokers, staging firms, interior designers and general handymen that might be needed for last-minute repairs.
Read More: How Do Bidding Wars Work In Real Estate?
Objective Information and Opinions
Superb real estate agents look at houses objectively. They're not emotionally attached to any house and are able to see the good points and flaws immediately. A home buyer may fall in love with the cherry tree in the backyard while their realtor sees a leaky roof that needs to be replaced. An unbiased realtor helps you stay in line with your buying objectives and within your price limitations.
Want to know about a good Italian restaurant in a neighborhood? Your realtor can give you the name of one and also tell you where you can do your grocery shopping, where to find the best local deli and the nearest dry cleaner.
If you have special requirements, like handicap access, your realtor can make you aware of local zoning rules and give you a list of contractors.
Advice On Setting a Price
Real estate agents stay up to date with the market conditions and can give you the best advice on pricing your home, staging your house for sale and competing with other houses that are for sale.
If you're trying to sell your house yourself, using the Zestimate from Zillow will not give you the best price for your house. This figure is only an estimate based on publicly available data used in a proprietary formula. You need an experienced realtor who knows the local market and can look at your house to highlight its best features and set the best price for current market conditions.
An agent can make suggestions for repairs or cosmetic work that will improve the attractiveness of your house and help you get the price you want.
Realtors know how to market your property on multiple listing services (MLS) holding open houses for other real estate agents and potential buyers. They don't just list your house on several real estate websites and wait for offers to come pouring in. Top-notch realtors know how and when to advertise and which medium to use.
Marketing is about knowing what features buyers are interested in. A realtor can take this knowledge and highlight the features of your house that will attract the most buyers. Each house has its own unique personality, so there is no one-size-fits-all marketing plan.
Buying or selling a house can be emotional. If you're the seller, you may not like to hear people making bad comments about your house during an open house. You have an emotional attachment to your home and may resent the negativity of potential buyers. That's why real estate agents suggest the owners not be present during an open house.
Emotions can take over when you're looking to buy a home, too. You may fall in love with a house and become too willing to ignore any problems and defects or an unreasonably high asking price.
These are situations when an experienced realtor who is not emotionally attached can step in and bring you back to reality. This kind of guidance can prevent you from making a serious mistake while selling or buying a home.
- USA.gov: Help Buying a New Home
- U.S. Bureau of Labor Statistics: Real Estate Brokers and Sales Agents
- Internal Revenue Service: Publication 523 (2020), Selling Your Home
- Realtor Magazine: 7 Reasons to Work With a REALTOR®
- Homelight: 14 No-Brainer Reasons Why You Should Use a Real Estate Agent to Sell Your House
James Woodruff has been a management consultant to more than 1,000 small businesses. As a senior management consultant and owner, he used his technical expertise to conduct an analysis of a company's operational, financial and business management issues. James has been writing business and finance related topics for work.chron, bizfluent.com, smallbusiness.chron.com and e-commerce websites since 2007. He graduated from Georgia Tech with a Bachelor of Mechanical Engineering and received an MBA from Columbia University.