Inspired by these two comments on the BHB, today I’m going to respond to/pick apart the National Association of Realtors’ Why use a Realtor? page. I hope that few consumers had read the referenced page on Realtor.com. Numbers two, nine and ten in particular jump out as being particularly wrong/offensive to me.
If we eliminate Dual Agency and End Cooperative Compensation (have the buyer pay the buyer’s agent, seller pay the seller’s agent – simple, huh?) many of the problems, perils and public perception (reality) issues with Realtors will be eliminated.
1. Your Realtor can help you determine your buying power – by guiding you to the right lender for you. This is part professional recommendation and matchmaking. Choosing the right lender is crucial. Knowing his or her reputation, track record and competence is something that is almost impossible to do without direct person-to-person feedback. As of yet there are no tools online to rate lenders or check their professional histories. Local is usually better.
2. Your Realtor has many resources to assist you in your home search – sure – the MLS, Craigslist, Trulia, etc. Oh, wait – many of those are available to the buyers, too. The time when we controlled the flow of information is long gone.
3. Your Realtor can assist you in the selection process by providing objective information about each property. – yes and no. One of the key components is removing emotion from the negotiating process. However – a lot of questions buyers ask – Realtors can’t answer. Part of the foundation of a good Realtor is acknowledging the value of being the “source of the source” – and then knowing that source.
4. Your Realtor can help you negotiate. Absolutely. A good Realtor will look at all of the various factors. There is more to the equation that price. This is more and more a core component of one’s value proposition in today’s Buyers’ Market.
5. Your Realtor provides due diligence during the evaluation of the property. Absolutely. Good Realtors know what questions to ask, and to whom to address them. They also can recommend qualified and trust home inspectors.
6. Your Realtor can help you in understanding different financing options and in identifying qualified lenders. – Absolutely; but in today’s fluid lending market, I am more qualified to know who is the best lender than I am the best loan terms for you.
7. Your Realtor can guide you through the closing process and make sure everything flows together smoothly. It’s about the competence of the closing attorney/title company (we don’t do attorney review in Charlottesville) and the relationship and trust therein.
8. When selling your home, your Realtor can give you up-to-date information on what is happening in the marketplace and the price, financing, terms and condition of competing properties. Buyers can usually do this, too – but it’s a Realtor’s job to know this information; not yours. (What’s your time worth?)
9. Your Realtor markets your property to other real estate agents and the public. Often, your Realtor can recommend repairs or cosmetic work that will significantly enhance the salability of your property. Your Realtor markets your property to other real estate agents and the public. In many markets across the country, over 50% of real estate sales are cooperative sales; that is, a real estate agent other than yours brings in the buyer. Your Realtor acts as the marketing coordinator, disbursing information about your property to other real estate agents through a Multiple Listing Service or other cooperative marketing networks, open houses for agents, etc. The Realtor Code of Ethics requires Realtors to utilize these cooperative relationships when they benefit their clients.
10. Your Realtor will know when, where and how to advertise your property. There is a misconception that advertising sells real estate. The NATIONAL ASSOCIATION OF Realtors studies show that 82% of real estate sales are the result of agent contacts through previous clients, referrals, friends, family and personal contacts. When a property is marketed with the help of your Realtor, you do not have to allow strangers into your home. Your Realtor will generally prescreen and accompany qualified prospects through your property.
a – I want to see that study.
b – Allowing strangers into your home is the whole point of the MLS and lockbox system we use! (I have a great local anecdote about this coming soon)
11. Your Realtor can help you objectively evaluate every buyer’s proposal without compromising your marketing position. This initial agreement is only the beginning of a process of appraisals, inspections and financing — a lot of possible pitfalls. Your Realtor can help you write a legally binding, win-win agreement that will be more likely to make it through the process.
12. Your Realtor can help close the sale of your home. Between the initial sales agreement and closing (or settlement), questions may arise. For example, unexpected repairs are required to obtain financing or a cloud in the title is discovered. The required paperwork alone is overwhelming for most sellers. Your Realtor is the best person to objectively help you resolve these issues and move the transaction to closing (or settlement).
Managing the process and transaction and knowing the pitfalls and problems that may arise is one of the key components a good Realtor brings to the transaction.
It’s getting harder to say “I’m going to market your property better than the rest,” because the distribution tools are flattening; more on this in another post.
Did I mention that if we eliminate Dual Agency and End Cooperative Compensation many of the problems go away?