Buying a house, store, farm, or any other kind of property has always been a big undertaking with a variety of risks. The nature of the business and the industry is such that the real estate trade has always had a high barrier to entry. Even for people who want to join as real estate sellers or developers, it is not that easy to familiarize yourself with how this business works. The skewed spread of knowledge was a big barrier, but the internet is helping people overcome this challenge.
As the internet became mainstream and real estate knowledge became plentiful on the platform it reduced people’s dependence on print media and word of mouth.
Traditionally, real estate was advertised through print media, or it was marketed by real estate professionals who knew about the property and also knew people who would want to buy it. Though this wasn’t the best situation for the buyer or the seller, it was an ideal situation for the intermediary. In many places across the US and in other parts of the world the middleman still holds this powerful position.
Digital Real Estate
As real estate data has grown in volume online there have been a few developments. One big change is the emergence of real estate portals such as Zillow. On huge real estate platforms such as these, there are all kinds of real estate assets listed from all over the country. In some cases, they are listed by the property owners themselves, sometimes by agents, and sometimes by real estate companies that have either bought the property or they are managing it for someone else.
However, as a buyer, you get a good amount of information about the property. Whether you want to know about the history of the property, see pictures, find out the price, or compare it to other properties, you can do all this online.
The other situation is where you see information posted by an agent or a smaller company and the information has been published exclusively on their own website. You won’t find these listings in any other groups or any other large marketplaces.
This is something that wasn’t too popular in the early days but as people got familiar with the limitations of the large marketplaces they understood the benefits of working with specialized real estate agents and finding properties through their websites.
Benefits Of A Local Realtor
Getting the services of an expert is not only limited to using their website. A lot of buyers or sellers that are trying to either procure or sell a property try to bypass having to use a realtor at all, in the hopes of getting a better deal. While this can be the case in some situations it is not true for everyone, especially not for those people that already aren’t familiar with the real estate sector. Here are a few reasons why working with a realtor is still a very good option today and possibly the best solution in the modern era.
Better Negotiating Skills
If you need to decide something based on the price, the only effective way to do that is to have some prior knowledge of what a good price should be. If you didn’t know that a Bugatti was worth $1 million, and you were offered one for $500K you might still think that you aren’t getting the best deal. If you knew you were saving $500K you would probably do everything you could to arrange that sum and finalize the purchase as soon as possible.
Similarly, when you are buying something you need to know a bit about how that market works. For instance, if you have never owned a home, you probably haven’t worked with home insurance so you won’t know the ins and outs of that industry. When you are buying something off the best Realtracs MLS listing and open house alerts, you need to know about this platform to better negotiate a deal. Moreover, there are listings on online platforms from all over the country and it is unlikely that one person will know about the real estate environment in every part of the country. Having a local expert from that area gives you access to this valuable knowledge that you can use to your advantage.
If you don’t spend a lot of time talking to people, negotiating deals, or even communicating in general, deal-making probably isn’t your strongest skill set. There are certain professions in which negotiation is a big part of the job itself and real estate is one prime example. If you are a doctor or an attorney or any kind of professional who deals with a lot of people due to the nature of your work you might have the skills, but you would still be lacking the knowledge.
Having a realtor from the area that you are looking to purchase property in, gives you the benefit of both knowledge and negotiation skills and helps you get the best deal possible.
When people think of their dream home, of the things that they would like it to have, where it should be, and what it would feel like to live in such a house, they often think of it in this static form. They don’t consider that every building goes through many phases. There is the land to consider, the construction, the quality of the fixtures and fittings, the kind of use that it has gone through, and how well the property has aged. These are all things that influence how feasible a certain place will be for a new owner, and it also drastically impacts the price that people can or should charge for it.
Most private homebuyers, whether they are buying an existing home or they are buying raw land and want to build the house themselves, are doing it for the first time. They will most likely have a very clear idea of what they want, but they will often not have the faintest clue about things that they should stay away from and will not detect very clear red flags.
When buying a home there are a lot of things to consider that could potentially be the weakness of that asset and it takes a lot of knowledge to understand these things. Even someone who has built a house in the past might not be able to pick up on it. Nothing can match the knowledge and the expertise of someone who looks at houses every day and gets paid to do so. The knowledge that you get in this department from your expert realtor can save you thousands, even tens of thousands of dollars, and a lot of time and effort. One bad decision in buying a house can lead to a series of difficult situations; it is not just about buying a house in the right condition.
Your real estate agent can even help you understand whether or not you are paying the right price for it. Because they are specialists in that area they will have plenty of data and documentation about properties in that area and you can use this to help make a better decision. Your realtor will not only help in comparative analysis, but they will know about the area as much as a local would. Things like crime rates, amenities, common problems, medical faculties, schools, and the knowledge of many other things are important considerations, and an expert local realtor can help with it all.
Buying and selling physical property is not only the exchange of money and a piece of land or a building. It is also the exchange of a lot of sensitive information. A lot of people are drawn to deals that have the FSBO (For Sale By Owner) sign on them, not realizing that this could be a major privacy risk if they don’t understand what they are getting into.
When you start working with a realtor you become part of a contract within which the realtor is also bound to fulfill what is known as a fiduciary responsibility. In a nutshell, this responsibility obliges the realtor to work in your best interest and one of the main characteristics of this service is that they will do their best to protect your confidentiality. When conducting a real estate transaction, you are exposing all your private financial information to people you don’t know and might never see again in your life. A contract, such as the one with your realtor, helps to put a protective fence around this transaction.
Moreover, it’s not just your financial information that is at risk. The fiduciary responsibility ensures that the realtor works in your favor. This means they will try to get you the best possible price on the deal, try and eliminate as many potential risks in the deal, try to ensure that the person you are buying from or selling to is also acting in your favor, and they will try to guard you against any misconduct and minimize the risk on your end.
The other important thing is that when you are working with a realtor you need to make sure that they are registered and licensed. This means they will be registered with the National Realtors Association, and in the case that something goes wrong you can go to the association and voice your concerns. Even if the realtor representing the other party has mismanaged the situation, lied, misled, or harmed you in any way, you can report it to the association and the necessary steps will be taken. Having your own realtor and making sure that the other party is also being represented by a realtor will help improve your security and privacy.
Understanding the property is one thing, but understanding the paperwork that comes with real estate transactions is another ball game altogether. Just the sales agreement alone can be several pages, a small booklet in most cases, and it can have all kinds of technical aspects that the average person simply won’t understand. Then there are insurance documents, state requirements, federal requirements, and even local requirements that need to be met. Keep in mind that an error in any of these things could cost you a lot of money.
The purpose of these documents is to protect the buyer and the seller and if you don’t know how they work, you can structure them to suit your situation and get the protection that you need. If you are completely convinced that you don’t want to hire an agent at all then you should at least consider getting a broker to review your documentation before finalizing it.
At the end of the day, buyers want to buy for as little as possible and sellers want to sell for as much as possible. The real estate agent also wants to earn as much as he or she can so they naturally work for the best deal for both parties. The fact of the matter is that FSBO properties sell, on average, for 30% less than what similar properties sell for when they are handled by a real estate agent. If you want the best price then get a professional.
Even in the case that you don’t get a professional yourself, the buyer will likely have a realtor so you will still have to pay a commission. Moreover, even if you do pay a commission, the higher price that you get for the property will easily outweigh what you pay in the form of sales commission. Working without an agent on both ends might save some money but it is very risky and you will not get the best deal as a seller.
Just like how some of the best MLS platforms are only for private members and certain privileged individuals, some of the best properties in the market never make it to the main page of a real estate website. They are sold discreetly behind closed doors and the average person never has a chance to get in on the action. However, with a well-connected realtor, you can get access. If you are buying, you can get sought-after properties; if you are selling, you can get a sale much quicker and for much better prices. Naturally, there will be a price to pay for this service but it will be well worth it when you are getting something truly unique.
A lot of people shy away from hiring a realtor because they don’t understand the real value that this person brings to the table. They are not there just to drive you to locations and show you houses. They play an important role throughout the transaction. Moreover, they can help you in a lot of ways that you may not have anticipated before getting into the buying or selling of a property. For both buyers and sellers, having a realtor on your team means quick progress, better pricing, and greater security in your transaction.