The Advantages Of Using A Realtor ® And Staying Loyal

Dated: 10/26/2017

Views: 541

By Scott Albright, REALTOR®

The M Real Estate Group 

(505) 247-1002 ext. 156

Recently I lost a potential client because I wanted her to sign a buyer-broker agreement – a document which basically says the home buyers promise to use me and only me as their realtor. The document helps to prevent buyers from switching realtors after that realtor has put in hours of work showing houses and preparing documents. It’s a protectionary document, ensuring realtors that they will earn their keep at the end of the day, and will not be working for free. This potential client I had said more experienced realtors don’t use buyer-broker agreements, which is why she decided to go with someone else after I’d already put several hours and many miles of work in for her. Her switching realtors only reconfirmed my belief in the importance of using buyer-broker agreements. I mean, who wants to work for free?

But I get it. People are fickle. My ex-wife pulled the same stunt on a realtor that was working for us when we were looking for our first home. My ex didn’t consider the fact that the person we had showing us houses was doing us a favor and that at the end of the day that realtor lost several hours she could’ve spent on more loyal and profitable customers. Yes, realtors are real people who still need to pay their bills and feed their kids. We wouldn’t be in the business if we only wanted to be volunteers. But we also know how to cut our losses and move on. For my potential client I wasn’t losing much, as I can still write off all those miles spent behind the wheel when tax time comes around, plus I still gained from the experience of preparing documents for a type of home I hadn’t dealt with before. Besides my kids losing their Sunday play time while being dragged along for the ride, the real loss came to that potential client, not me. Not only did she lose time by now having to have someone else go through the process of preparing paperwork that I had all ready to go, but she missed out on the possibility of finding an even better home she won’t be able to find with someone else.

But the owner of that other home I found, which matched my potential client’s search criteria pretty closely, is selling it on their own without a realtor, because, as many homeowners falsely think, they believe they will make more money by not having to pay a realtor’s commission. This is simply not true, as For Sale By Owner, or FSBO, homes sell for far less than those sold using a realtor. According to the National Association of REALTORS® 2016 Profile of Home Buyers and Sellers, “FSBOs typically sell for less than the selling price of other homes.” The 2016 report states that FSBO homes sold at a median of $185,000 the previous year were “significantly lower than the median of agent-assisted homes at $245,000.”[1] That’s $60,000 less! Even after paying commissions, that’s a significant amount of money DIY home sellers are losing out on.

Some reports also suggest homes sold without a realtor tend to stay on the market longer[2], thus costing more to the seller who will have to continue to make mortgage and utility payments on that home, plus extended maintenance costs, and sometimes paying on another mortgage while their home that is for sale remains vacant. Not to mention, there is a good chance that when a buyer does come around they will have a realtor of their own who will have to be paid, which will come out of the seller’s final closing costs. A seller may say they can offer a lower price because they are not paying to have a listing agent, but when that house sits on the market two to three months longer than necessary, that lower price becomes a wash or a significant loss, especially when it is sold for $60,000 less than it would had they used a realtor.

For buyers who go straight to the listing agent rather than getting their own realtor, the same logic applies. Yes, they can use that as leverage to put in a lower offer, but the seller has already adjusted the listing price to include commission costs before they even put the house on the market, so it is really the seller that is going to get the better deal, not the buyer, as the buyer doesn’t pay the commission anyway. Plus, the buyer’s leverage is minimal, as the listing agent is still working in the best interest of the sellers and will work to bring in the best price for them, not the buyer.

All that aside, there are some other really great reasons to work with a realtor. Whether buying or selling, a realtor can be a great asset. Realtors have access to tools that others do not, including Comparative Market Analysis tools, which help buyers and sellers to determine the best price points for negotiating deals. Realtors have access to their local MLS, the place where new listings are advertised and important real estate data compiled. Realtors have access to homes - they can get you inside a property to see what it looks like first hand, so you can inspect the home physically rather than just seeing it through the eyes of a photographer whose job is to show that property in the best possible light.

Realtors have access to forms and documents to ensure each and every transaction is done accurately and legally. Realtors have experience dealing with different home inspectors, surveyors, lenders, appraisers, roofers, electricians, home warranty companies, insurance agents, and the like. Most of all, realtors have the time to prepare the documents, to communicate with all the necessary parties, market & advertise properties, and to show you all those homes. That is their job, and they wouldn’t have the time if it wasn’t.

So please, do yourself a favor and hire a realtor when buying or selling your next home. Not only are you helping the local economy and providing jobs for your fellow neighbors, but you’ll also be helping yourself out in the long run. Who knows? That realtor you blew off could’ve been the one to not only sell your next home, but also to help you find that investment property which will help you to retire early. So, use a realtor, be respectful, and stay loyal. Chances are that realtor will return the favor.

[1] National Association of REALTORS®. “2016 Profile of Home Buyers and Sellers,” p. 7. https://www.nar.realtor/research-and-statistics/research-reports/highlights-from-the-profile-of-home-buyers-and-sellers.

[2] Rediger, Chris. “11 reasons for sale by owner is a terrible idea,” June 10, 2016. Inman https://www.inman.com/2016/06/10/11-resasons-for-sale-by-owner-is-a-terrible-idea/. AND The Real Estate Trainer. “FSBO vs Realtor – Infographics,” http://therealestatetrainer.com/2015/02/27/fsbo-vs-realtor-infographics/.


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