A few things to know before buying or selling a home.
Real estate can be a complicated business. A good real estate agent can help simplify the process, and manage all the important details to ensure a smooth transaction.
Sometimes, consumers miss out on leveraging the expertise and assistance of a good real estate agent because they have some misconceptions about what agents do, or how the business works. So here are some answers to some common questions, and explanations around some common misconceptions.
- How do real estate agents get paid?
Typically, agents receive a commission from the seller that is a percentage of the final price. In most cases, there’s no cost to the buyer, and the seller benefits from having the agent handle all the details, from preparing the home for listing and marketing the property to handling showings and taking care of all the necessary paperwork/details.
- Agent sales commissions are too much.
It may not be as much as you think. Consider these factors:
- Commissions are split between the buyer’s agent and seller’s agent, typically 50/50
- Agents’ brokers then take a percentage of what each agent receives
- Agents often pay monthly “desk fees” to their brokers, in order to have an office, access to office equipment & materials, etc.
- Agents pay for all marketing themselves, from the cost of yard signs to print/postage for mailings, online ad campaigns, newspaper ads, etc.
- Agents pay annual fees to be part of the local real estate association, and part of the local multiple listing service (MLS), which is where properties are listed for other agents to see
- Then there are taxes and insurance premiums, which are often higher for self-employed individuals or those that spend a lot of time in their cars driving customers around town
- Fees for licenses, continuing education & more
- If I’m building a new home, can I get a discount by not using an agent?
Typically, no. Just as with a travel agent, you’ll pay the same fare, whether you book it yourself, or let the agent do the work. Agents will often have insight into what items a builder may be willing to negotiate on, what special promotions may be available to you, and if there are any “hidden” fees or costs that you should be aware of and take into account when making your decision. Bottom line, having an agent on your side to look after your best interests, as opposed to the builder’s, is always a good idea.
- I’ll save money if I buy or sell a home without an agent.
It’s debatable. Lots of studies show that sellers actually get more money for their homes when working with agents. And buyers going direct to a For Sale By Owner (FSBO) property could inadvertently overpay if they don’t have a good idea of what market value is for a home in a particular neighborhood. A real estate agent can give you the most up to date data/tools you need to make a fair offer.
- All real estate agents are Realtors®.
Not so. You can be a real estate agent without being a Realtor. Realtors are members of the National Association of Realtors, and vow to abide by the Realtor Code of Ethics.
Have any other questions about real estate, real estate agents or buying or selling a home? Contact us anytime…