Why use an agent? Age-old question attracts techies
By Jessica Swesey, Thursday, March 27, 2008.Bookmarking Sites
When the market gets tough, many people look for ways to cut expenses so it's no surprise that tech videocaster extraordinaire Chris Pirillo presents the idea of conducting a real estate transaction without an agent in a recent episode.
Todd Carpenter, a mortgage industry insider and blogger at Lenderama, suggests a real estate agent should step in and debate the tips presented in the show.
Couple of issues here:
1. As Dustin Luther points out, the tech crowd approaches the real estate transaction differently -- they see it as an inefficient transaction that could be made more efficient through technology. (I actually think this feeling goes beyond the tech crowd.) And thus was born many sites like Zillow and Trulia. Ask any newer online real estate company what sparked its birth and you will inevitably hear a story along the lines of "When I bought my first house I thought it was an inefficient process and felt that more information needed to be available to me."
2. In the so-called information age where a lot of real estate info such as listings and valuations are readily available, younger consumers will need to understand more of the agent's value proposition beyond information gatekeeper. It may seem like we constantly go through this back and forth of consumers questioning whether they need an agent or not -- and some may be fine on their own -- but isn't that a symptom of folks not getting how an agent could help them? Or, this may even be based on subpar experiences with agents they've transacted with in the past.
So agents, here's your chance to explain the value to a group of young techies. Have at it.
All rights reserved. This content may not be used or reproduced in any manner whatsoever, in part or in whole, without written permission of Inman News. Use of this content without permission is a violation of federal copyright law.
You must login or register to post a comment.
Submitted by Kevin Schmidtchen on March 27, 2008 - 3:34pm.
Jessica,
Good post. I would be happy to talk with any potential buyer or seller about the pros of using an agent in any real estate transaction.
Let's just say that I am a big fan of paying experts to do what they do.
Go earn your money doing what you do for a living rather than taking your time to do something you are not an expert in because you think you are saving $$$...but instead you are taking away from your time to earn $$$.
Painting your home...we can all do it but it takes away a lot of time is just one of 10 examples I could run off.
I think people get caught up in the commissions too much and end up feeling happier about selling a home for $900,000 and not paying a commission out when an agent could of marketed the home and sold it faster and with less hassle most likely for $950,000 with all their expertise etc.
Anyhow...I could write a bunch more about this.
I know of 3 first hand experiences where buyers also did not use an agent and had to deal with all the issues, legalities and paper work themselves...and paid too much. They thought they were saving money but in the end they spent more $$$ and time than they should of.
Submitted by Mary Pope-Handy, CRS, ABR, E-Pro, SRES on March 27, 2008 - 6:13pm.
Buyers and sellers don't need agents to help them find each other. Technology has enabled them to do that mostly without professional real estate agents. If your view of an agent is that of "house finder", or "buyer finder", then you'd see no value there.
But that would be a short sighted view of what a good agent could do for you.
The main reason to hire a Realtor is for representation - yes, marketing if you're a seller, but for both buyer and seller, professional guidance and negotiation so that you can get the best price and terms possible for the market and house involved.
For buyers, your agent can "issue spot" (give you a heads up on the red flags of properties or areas you may be considering), provide you ways to investigate issues, suggest approaches, explain possible consequences, etc. For instance, a good agent will not just unlock the door to the home you're going to see, but will point out to you any issues such as cupped hardwood floors, sagging ceilings, poor grading - and why all those things matter.
For sellers, a good agent can provide you objective feedback (on your home's condition, what can be done to increase marketability, etc.) to best position your home to sell and can guide you through the process of attracting the buyer who will give you the best price and terms for you home.
For both, the knowledgeable, dilligent agent will help you to understand the disclosures, the contract and the sales process and will negotiate for you to get you the best price and terms possible to help you to acheive what you want to acheive (sell or buy). That good agent will give you data on the market conditions, recent comps and so on and will help you to make sense of it. (Having information is not the same thing as having knowledge.) Your agent will navigate trouble shoot anything that might arise in escrow. (Sometimes selling the house isn't the challenge, but closing it.)
An experienced, careful, good agent will not just make buying or selling easier, but guide you, protect your interests, inform you, and help you to maximize your position in the transaction and minimize the chance that problems will creep up after you close escrow. On top of all that, agents often work closely with folks who may be very emotional (buying and selling is far more than just a straight business transaction and can be complicated by death, divorce, job loss, relocation, etc.). Just like most folks will opt to hire an attorney to assist them with a will & trust rather than get a do-it-yourself kit from an office supply company, most folks realize that buying and selling real estate is very complex and includes complicated paperwork (contracts, disclosures, closing papers), issues that may need to be spotted in the property itself, professionals who may need to be called in to help with particular problems or surprises, as well as the myriad of small details that need to be handled to get the transaction to closing.
While there will always be a reason for some folks to sell on their own or with very limited assistance, the vast majority of real estate transactions are involved enough that buyers and sellers are greatly benefitted by professional real estate representation.
Submitted by Anna Novikoff on March 28, 2008 - 10:35am.
Information is Power -
To paraphrase the old saying, "Knowledge Is Power". Consumers today have more access to information about real estate than most people have time to digest - let alone absorb - to the level of competency of a real estate professional. Unfortunately, there's no substitute for wisdom and experience in any profession.
Wisdom and Experience Pay Off -
Your first real estate purchase, if handled properly, is your stepping stone to financial independence. It has been said that homeowners retire with security but those who own multiple properties retire with wealth.
An Ongoing Relationship -
Establishing an ongoing relationship with a qualified real estate broker is key - much like establishing a long term relationship with a trusted advisor such as an insurance agent, family attorney or financial planner. The wealthiest people don't "do it themselves".
Skillful Pricing and Negotiation -
The 2 most important skills a real estate professional can provide are skillful pricing and negotiation. Proper pricing is part art and part science combined with intimate knowledge of sales and trends in a given area over time. This depth of experience is not easily learned over the internet.
Real Estate Pays Dividends -
Yes, motivated buyers and sellers can, and should, do the legwork to scope out the type of property and neighborhood they prefer or watch the sales trends in their neighborhood before calling in a broker to work with. A skilled broker can translate pertinent real estate data into information and provide an integrated solution for pricing and marketing the property to maximize your profit or provide solid statistics and historical data to validate your offer to purchase.
Time Is Money -
The basics of advertising, holding open houses, writing and printing flyers and mailings and being available at all times to show the property are tasks that many people are willing to take on. In the tech industry, some people are the architects, some are builders, others test and the last group integrates. Rarely does one person encompass all of these skills successfully. Your broker should be the professional “implementer” for your real estate investment goals.
Anna Novikoff
ek Real Estate Group
www.ekreg.com
www.condomaximums.com
Submitted by Joe Cline on March 30, 2008 - 5:56pm.
Hmm. I read Chris Pirillo in Computer Power User Magazine every month and I thought he was a smart guy. I'm not so sure now. You can buy and sell by yourself, but is that smart? Kind of like going to court and representing yourself.
I learn something new on close to every transaction and I know that I had no idea what I was doing when I bought my house (before I was an agent). Knowing how litigious people are now a days and how emotional a transaction can get, I wouldn't dream of doing a sale without representation. I think the unbiased, emotionally detached and rational third party helps get things done and makes sure you see all aspects of the transaction.
Lastly, how are these random folks getting into the houses? I'm not opening my house to the general public when it's time to sell. Nope. I want someone trustworthy and responsible to be with the prospective buyers.
Joe
Austin Texas Real Estate Blog | Circle C Ranch TX Homes
Submitted by Rob Aubrey on March 31, 2008 - 5:27pm.
Real Estate for the most part is an offline transaction. Looking online for property or for comparable data is one thing. Admittedly most Realtors are not very tech savvy.
First I want to make a distinction between your friend that just got a license and a seasoned professional there is no comparison.
I think the emotional factor is where buyers and sellers lose the ability to finish the deal. I am NOT saying that about all people and all transactions.
Real Estate transactions usually have a lot of emotions before the real estate ever enters in the picture.
For example- Marriage, Divorce, Death, Birth, Debt, Job Transfer, Lost a Job… I don’t know what percentage of transactions that those items encompass but based on my experience a lot.
When good folks are involved in those circumstances they are in need of a reliable and an experienced agent to help them make decisions and negotiate. They can be very vulnerable and become shark bait. The investment seminars that sell tapes and programs teach buyers to seek out this type of seller.
Then there is the selling and buying of another home. That process can be overwhelming for agents let alone a family trying to do it in their spare time. Combine that with the financial decisions that are being made. Take a family that has a total gross income of $90,000. They are selling a home for $200,000 and buying another for $350,000. Let’s say the $90,000 nets $7,500 per month, they are now involved in $550,000 worth of transactions. That is almost 75 times their normal financial comfort zone. Combine all that with moving a family and you have a lot of emotions. Not just the one family, but sometimes these transactions have a domino of 4, 5 even 6 families. This is where a well seasoned agent shines.
So in summary you don’t need an agent to sell or buy a home. But like accountants, attorneys or a financial advisors, the GOOD ONES don’t cost money they make you money.
Submitted by Greg Holt on April 1, 2008 - 5:55pm.
Great post! What if you could combine the two? Having an agent be enough tech savy and ahead of the crowd that they are using all the tools available to the consumers online. This was the situation I was in trying to sell my home with a real estate agent stuck in the past and not willing to utilize concepts and techniques that were needed to sell my home. Thus, I dropped my agent and have looked for alternative solutions to sell my home. I believe the two being tech savy and a real estate agent are both critical pieces to a real estate transaction. Individuals want to know that their agent is turning over all the stones to sell their propety quickly.
Greg Holt
CEO
Pad4Pad, LLC
www.pad4pad.com
Submitted by Rob Aubrey on April 4, 2008 - 7:57pm.
Hi Greg, There are actually a lot of tech savvy agents out there. For the most people use someone they know rather than use the best or better.
More and more people are finding an agent online. Blogging has given individual agents more of a level playing field. Actually smaller local agents sometimes have the advantage in the hyper local marketing as it is called over some of the big power houses.
Another interesting note is that tech savvy and the sales behavior are not usually the same styles. In fact the two behaviors can drive each other crazy. A good sales person may know it is a good deal and tell the tech savvy consumer just buy it, the tech savvy agent has a thousand questions… I realize not all sales people are going to be good and not always know what a good deal really is. However I am talking about professionals that really know their market and their product.
Submitted by Barry Preusz on September 30, 2008 - 6:35pm.
Almost any of us can represent ourselves. Professional athletes can self-represent in negotiating their team contracts or in negotiating with sponsors. However, most of the high paying athletes are represented by agents. Why?
Do we need lawyers? There are several cases where individuals have represented themselves quite well in the legal arena without an attorney. The fact is you can make a case for any professional service – do you really need them? Perhaps that is the wrong question. Maybe the question should be what is the most efficient and effective use of your time and resources?
How efficient is the use of your time in researching and representing yourself in the 3 to 12 real estate transactions that you will conduct during your entire lifetime. Will you be informed of the changes in government regulations and legal precedents that have taken place between each of the transactions. I think that most reasonable people who conduct their own cost-benefit analysis will choose to hire a full-time professional to represent them in completing a rather difficult and complex transaction that can have long-term and high-cost implications.
Anyone who has tested the quality of the information on Zillow knows that you are in deep trouble if you think this is a reliable resource. Have you ever called "For Sale By Owner" properties listed on Zillow. I have and most of them are outdated and many are properties that do not even exist.
Barry Preusz
Realtor | Residential Specialist
Equity Real Estate – Burgundy Canyons Group
http://www.luxuryhomeutah.com