The Common Sense Investor

Do you really save money by trying to sell or buy a house without realtors? And, if you do save money, is the amount you save enough to make up for the the extra time and effort you put into the process?

With the growth of do-it-yourself selling through things like FiSBO (for sale by owner), you may think that you don’t really need a realtor to sell or buy a house. It can’t be that hard, right? It’s a good question.

Most people never spend as much money on anything as on a real estate transaction. Most transactions are into six figures. Realtor fees are often upwards of 6% of that transacation. That’s not chump-change by anyone’s calculations. If you don’t think you need a realtor, here are some things to consider.

1. Realtors help you determine how much you can spend, and they can help you maximize the buying power that you have. Your realtor can also get you hooked up with a good mortgage broker, though you should be careful that they are not getting commissions to send you to a mediocre mortgage rep.

2. Realtors know properties that are going on the market before anyone else does. Your perfect house may be sold before you even read about it if you don’t use a realtor.

3. Realtors know where to go to find out everything about your property, including average utility costs, zoning regulations, schools and hospitals, and more. They also know which markets are hot (for those who plan to be able to sell their property later) and which are cooler (for those who are ready to settle down in a stable neighborhood).

4. Realtors are expert negotiators, and they know who to talk to. Price, financing, terms, possession date, and even repairs and furnishings to be left are all up to negotiation. Realtors often have twenty years or more of experience in getting their customers ““ buyers or sellers ““ the best possible deal.

5. Termites, anyone? Realtors can help you vet homes for termites, dry rot, asbestos, weak structure (either in plan or in construction), roof condition, water testing, ground stability, and many other hazards that can turn your dream home into a money pit. They can also assure the title to your home is clear, with no liens or odd rights of access left on it.

6. In all things financial, your realtor can save you time, stress, and money. He or she can help you understand your financing options, find qualified lenders, and make sure your closing goes smoothly. If you’re selling a home, your realtor can ensure your home is priced right, and warn you against pitfalls, competing properties, and any issues that are coming up.

7. Realtors market properties publicly and privately, and they can help you identify for repair the tiny little things on your property that can make a huge difference in its saleability: changing a gutter style, doing some paint work, or getting rid of oil stains, for instance. In addition, the other party in the sale will probably have a realtor helping him or her get the best possible deal; not having a realtor in a situation like this can be like not having a lawyer in a courtroom.

8. Realtors are experts at knowing how to market your house and minimize the intrusion of the market into your home. Realtors will only bring qualified buyers with genuine interest into your home.

9. A realtor can say “no” for you. They can work as an objective go-between, helping you evaluate the proposal of a buyer without committing to anything. And your realtor will keep you from accepting the first offer, instead helping you navigate the maze of negotiations, appraisals, and inspections and coming out on the other end with a legally-binding agreement. They’ll also help finalize the sale, keeping unexpected repairs or title issues from sabotaging your sale.

The question really is, can your realtor save you more money than he or she will cost you? You’ll have to look at your own situation, but chances are, the answer is “yes.”