Why Use A Real Estate Agent?

“Why should I use a Realtor® to sell my home?”

“Does selling my home myself save me money?”

Let me begin with this statement. “In any profession you have the good and the bad.” In any professional service performed for a fee, you usually get what you pay for. 

Realtors® are a member of the National Association of Realtors® and have to adhere to a higher standard of care than a licensed real estate agent. If a Realtor® is doing his or her job properly, they will complete up to 200 steps with considerable time and effort put forth in order to get the property sold. In this market that has ever tightening home loan requirements, inspections, tests and disclosures, sometimes the property goes under contract multiple times before arriving at a successful closing, and you have to have someone with knowledge to fjord that stream! Navigating a transaction to a completed sale is a complicated process. Years ago you might have been able to place a sign on the property, write a contract, wait two weeks and close with no problems. Those days are long gone!

So the question is “What value does the Realtor® bring to the sales process? Does it justify the commission they charge?

Answer – The right Realtor® brings years of marketing experience, knowledge and tools of the trade to the table. Proper use of this knowledge, marketing and experience will:

  1. Sell the home faster,
  2. Net more money to the seller than they could if they were to sell “By Owner”,
  3. Narrow or eliminate the pitfalls of selling “By Owner”.

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As local Realtors®, we collect a lot of statistics about this and the data shows conclusively that only 10% of “For Sale By Owner” attempts are successful. About 10% of the “For Sale By Owner” attempts end up with the property being removed from the market and the sale abandoned. The remaining 80% of “For Sale By Owner” attempts hire a real estate professional to get the job done.
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According to National Association of Realtors® (NAR) statistics, sellers who are represented by a real estate professional get 20% more money for their homes than sellers who successfully complete a “For Sale By Owner” transaction.

A part of that is due to the unrepresented seller’s tendency to overprice their property in the first place with the end result that they have to discount more heavily because it becomes “stale” on the market. In a transaction involving a real estate professional, we work very hard at the beginning to properly price the home and consequently they sell more quickly, and in this market, with multiple offers.

Secondly, there is the issue of advertising. A house won’t sell if nobody knows it is for sale. A “For Sale By Owner” sign stuck in the lawn is only a start (and a weak one at that). A Realtor® may spend anywhere from 6-10% of the expected commission on advertising in addition to the cost of placing the listing in the MLS, and the cost of a professional sign placed on the property. Additional costs may be incurred for placing the listing on certain web sites and for other techniques that the agent uses to increase exposure for the property. I personally use many avenues that other agents don’t, and that is why my listings sell fast! In addition, most companies now have mobile apps that can be used to find your property if it is listed. More and more buyers are “going mobile” these days and you might end up being as invisible in that world as a “For Sale By Owner”.

Third is the need to deal with potential buyers. Buyers and their agents need to set up appointments and are likely to call at all hours sometimes with limited advance notice. A Realtor® will have an office that people can call for these appointments 7 days a week. A Realtor® will also try to pre-screen potential buyers and only set appointments for those that he/she feels are valid buyers for the property. Place a “For Sale By Owner” sign in your front yard and you are inviting the whole world to walk through your house, without any knowledge of them even being qualified to be there! 

The fourth issue is one of time – time that the agent would spend sitting in open houses, so you don’t have to, and the time that you’ll lose on the sale just due to it being an unrepresented sale. Without the benefit of the exposure that the Realtor® will provide for the house through the Multiple-Listing Service and his/her advertising and marketing efforts, the unrepresented home is likely to stay on the market quite a bit longer than a listed property. Statistics tell us that an unrepresented seller’s house can stay on the market almost twice the average for a listed property in the same area. Remember that you’re making payments during that extra time and very little of that money flows to your equity bottom-line.

Fifth, 89% of buyers used a Realtor®, and so did 88 % of sellers.

For Sale By Owner (FSBO) Statistics

  1. FSBOs accounted for 9% of home sales in 2013.
  2. The typical FSBO home sold for $184,000 compared to $230,000 for agent-assisted home sales. Roughly a 20% loss to the unrepresented seller.

FSBO methods used to market home:
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Most difficult tasks for FSBO sellers:

  1. Understanding and performing paperwork: 18%
  2. Getting the right price: 13%
  3. Preparing/fixing up home for sale: 12%
  4. Helping buyer obtain financing: 3%
  5. Attracting potential buyers: 3%
  6. Selling within the planned length of time: 7%
  7. Having enough time to devote to all aspects of the sale: 6%

Source: 2013 National Association of REALTOR®S® Profile of Home Buyers and Sellers

Home Seller Statistics

  1. The typical home seller in 2013 was 53 years of age, had a median household income of $97,500, and lived in their home for 9 years.
  2. 88% of sellers were assisted by a real estate agent when selling their home.
  3. Recent sellers typically sold their homes for 97% of the listing price, and 47% reported reducing the asking price at least once.
  4. The typical home sold was on the market for 5 weeks.
  5. 39% of sellers who used a real estate agent found their agents through a referral by friends or family, and 25% used the agent they previously worked with to buy or sell a home.
  6. Sellers who definitely would use same agent again: 65%

Source: 2013 National Association of REALTOR®S® Profile of Home Buyers and Sellers

Home Buyer Statistics

First-Time vs. Repeat Buyers:

  1. First-time buyers: 38%
  2. Median age of first-time buyers: 31
  3. Median age of repeat buyers: 52
  4. Median household income of first-time buyers: $64,400
  5. Median household income of repeat buyers: $96,000
  6. The typical home purchased in 2013 was 1,900 square feet in size, was built in 1992, and had three bedrooms and two bathrooms.
  7. Among those who financed their home purchase, buyers typically financed 90% of the home price.
  8. 88% of buyers purchased their home through a real estate agent or broker—a share that has steadily increased from 69 percent in 2001.
  9. Buyers who definitely would use same agent again: 73% 

Information sources used in home search:

  1. Real estate agent: 89%
  2. Yard sign: 51%
  3. Mobile of tablet website or application: 45%
  4. Open house: 45%
  5. Mobile or tablet search engine: 42%
  6. Print newspaper advertisement: 23%

Source: 2013 National Association of REALTOR®S® Profile of Home Buyers and Sellers 

Contact me for information on selling your home or buying property at (214) 609-7123 or jtrump@kw.com

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