Why Use a Realtor?

How to decide if you need a Realtor.

Most people do not realize that all licensed real estate agents are not the same. The term “Realtor” only applies to real estate agents who have been accepted for membership in the National Association of Realtors (NAR). In the same way that the term “CPA” designates the best accountants, “Realtor” designates the best residential real estate agents.  Realtors subscribe to the NAR’s comprehensive Code of Ethics and receive leading-edge education.  If you’re thinking about hiring a real estate agent, make sure you get a Realtor.

But why use a real estate agent at all? Why not just sell your home yourself? If it works, you save the cost of a full real estate commission. If it doesn’t work, you can always hire a real estate agent later and try again. Why not try it yourself for a while?

In real life, FSBO (For Sale By Owner) usually works in two situations: (1) When the home can sell itself (ie., the home is clearly the best in its price range with strong demand and minimal or no competition), or (2) the homeowners have a reasonable understanding of marketing (both print and internet) and contract law and have the time to market and show the home themselves. Usually, you’ll find that people who have the time to market their own home do not have the necessary expertise. Those that do have the necessary expertise generally do not have the time to do it themselves. That’s one of the reasons why Realtors exist.

The downside to FSBO arises when the home fails to sell, despite the best efforts of the homeowner. What’s the downside? The downside is that – right or wrong – the market no longer thinks the home is worth what the homeowner originally asked. If it was, it would have sold, right? But it didn’t, so there must be a problem. In reality, the only problem might have been in the marketing or presentation, but that’s not how the market will see it. Once the original asking price fails, it’s very difficult to reestablish it with a new marketing campaign. You only get one shot with your initial asking price so you want to make it good.

So, are Realtors worth the commission? You be the judge. Here’s what Realtors bring to the table:

Performing a Market Analysis. One of the reasons many FSBO properties fail to sell quickly is that the owners set the sales price too high, either out of fear of loss or because they have failed to perform a credible market analysis on their property. A market analysis takes into consideration recently sold comparable homes in the neighborhood, similar homes that are currently for sale and homes that did not sell and were withdrawn from the market. For more on home pricing, see Setting the Ask Price.

Preparing the Home for Sale. FSBO sellers often fail to critically assess the saleability of their property, ignoring details such as curb appeal, clutter inside the house and other distractions that may leave a negative impression on a buyer. Real estate brokers who deal with buyers regularly learn to anticipate buyer objections and can suggest changes to the buyer before these problems affect the sale. Learn more about properly staging a home for sale by reading First Impressions Matter.

Marketing.  Perhaps the most important thing a Realtor can do for you is design a sophisticated marketing campaign with maximum market coverage.  For most homeowners, this is a difficult undertaking for several reasons.  First, a Realtor has an existing, established web presence.  The Realtor’s website network (including social media) is the best way to reach potential buyers with information about available homes, communities and financing options. Your home will be prominently featured on this web network, showcasing your home to a huge universe of agents and buyers.  Typical marketing campaigns also include newspaper ads, brochures and open houses.   Second, Realtors have established networks of contacts, usually buyer’s agents, that will bring more prospective buyers to your home.   Finally, Realtors are able to produce professional marketing campaigns much more quickly and economically than an individual homeowner could ever accomplish.

Security and Convenience.  It is not always easy for FSBO sellers to be available when potential buyers ask to view the house, which could mean lost opportunities. It is also risky for sellers to let strangers into their home.  When a property is marketed through a Realtor, the Realtor will pre-screen and accompany qualified prospects through your property.  The Realtor will handle all phone inquiries, appointments, showings, and information requests.

Offer Evaluation.  Your Realtor will help you objectively evaluate every buyer’s proposal without compromising your marketing position.  Remember, this initial agreement is only the beginning of a process that includes appraisals, home inspections and financing – each a potential pitfall.  A Realtor can help you write a legally binding, workable agreement that will more likely survive this process.

Contract Negotiation and Closing.  Unless a homeowner is familiar with the sale process, dealing with written contracts, negotiations, home inspections, title companies and closings can be confusing or even intimidating.  Realtors will explain these procedures to you in advance and assist you to whatever extent you like.  It’s not uncommon for the Realtor to take the lead in each of these areas while reporting back to the home seller.  By using a Realtor, you’ll know for sure the transaction has been completed properly and in accordance with law and practice.

To sum it all up, qualified people sell their own homes every day (the key word here being “qualified”).  Qualified people are those comfortable with marketing and contracts and who have the time to design and implement a legitimate marketing program.  That’s not as common as you might think.  If you’re thinking about taking on this task, ask yourself if you feel reasonably sure you can successfully pull it off on the first try.  If the answer is “yes”, then go for it.  If you’re not so sure, then you’re probably better off hiring a professional Realtor.  You’re likely to net more money with a lot less hassle.  Not to mention that everyone’s time is worth something.

If you’d like to see how we market homes, go to Enhanced Value Marketing™ for the details.  We’ll be happy to talk to you about marketing your home and the best way to achieve your goals.