Do I need a Real Estate agent?
Most of my clients assume up front that they need a real estate agent, but that's not true. This article will discuss the benefits and drawbacks for both the buyers and sellers in a transaction whether they elect to have a Real Estate Agent or not.
Who pays the Real Estate Agents?
If you are a buyer, I would always recommend having a real estate agent, especially because the buyer does not have to pay their Realtor ANYTHING. All of the driving and property showings and advice you are getting from the agent is free to you. The seller actually pays BOTH your agents commission and their listing agents commission out of the proceeds of their home sale.
What does the buyer's Real Estate Agent do?
A good buying agent should be knowledgeable about local tax rates, HOA dues and community data (nearby schools, parks, crime rate, average age, etc.). They will also negotiate on your behalf, be able to recognize great deals/ over priced homes, and needed repairs upfront. An excellent real estate agent is great at LISTENING to you. It is imperative that your agent knows exactly what you want so that you only see homes that you could actually see yourself living in and not waste your time!
What does the sellers Real Estate Agent do?
A good listing agent will search for local comparable sales in the area, take all of the special features of your home into consideration, and strategically place the home on the market to get you the most activity and ultimately the best offer possible. They will advertise your home to the local neighborhood, put photo's and video's online, and even potentially share your property with other agents just in case they have a buyer looking for a property like the one you are selling. This agent helps to take the liability off of the seller, using all California required disclosures- many of which protect the seller. They will also help to negotiate repairs and screen incoming offers. A great Real Estate agent will help you get your home ready to sell with trendy suggestions on what can be done to appeal to what buyers are currently looking for.
What is a "For Sale By Owner" deal?
"For Sale By Owner" deals typically do not involve real estate agents, and I have done quite a few for my clients. The advantage of these deals is the seller doesn't have to pay agent commission, so they may give a better deal on the home price to the buyer, however there are definitely draw backs to not having an agent.
The buyers have no one else negotiating for them and no buffer between them and the sellers, which can get ugly if disagreements arise. Instead of having real estate disclosures, disclosures are limited to escrow disclosures. Instead of a purchase contract, escrow instructions serve as the contract between buyer and seller. Bottom line is in a "F.S.B.O." type deal, both the buyer and seller have no one to represent their interest in buying or selling the property. There tends to be a high level of liability associated with these deals. I would not recommend them!
What if both of us (buyer and seller) use the same agent?
The benefit of using the same agent, or having an agent "double end" a deal is that the agent will typically drop their total commission fee (since they will make more than if they had to split it with another agent) which saves the seller money, and could result in the seller dropping the price of the home, giving the buyer a better deal.
The drawbacks are that the agent will essentially be representing both the buyer and the sellers interest in the transaction, which often results in a conflict of interest. The seller wants top dollar, while the buyer wants a good deal on the property. The agent has to try to keep both sides happy as well. It is a fine line to straddle, but a seasoned real estate agent may be able to do a good job representing both parties.
Bottom Line: I would always recommend a Real Estate agent, if you're a buyer, it doesn't cost you anything, if you're a seller, it can ultimately save you money from liability issues, and help you get top dollar for your property.