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Buying or selling a home involves a lot of paper, details, and finesse. Real estate agents charge a fee for their services, so you may wonder if you need to hire one to handle your business.
The majority of real estate agents charge a 6% commission paid by the seller. It is tempting to forgo the cost of a professional and put the 6% in your pocket.
As with any decision involving real estate investment, there’s a lot to think about. Here are the pros and cons of using a real estate agent.
Benefits of Using Real Estate Agents
Real estate agents undergo extensive training and are licensed in most areas, meaning they must pass a core knowledge test. They can help you avoid the pitfalls inexperienced buyers often run into.
1. Avoid Legal Loopholes
Buying a house seems like signing your life away at times. The last thing you want to do is make a big financial error or spend more than you need. As a seller, you may be required to disclose certain things. An agent will know the rules for your area.
2. Save Time
Online listing sites don’t update as frequently as the MLS system. A real estate agent knows what is still on the market and what is pending. They can also narrow down choices quickly by the school district and features you want in a home.
3. Get the First Choice
On top of knowing what’s available, a professional may have inside info on listings getting ready to go on the market. On the flip side, an agent may already have a buyer in mind for your home if you’re selling.
4. Reduce the Stress of Negotiations
Representing yourself makes you responsible for negotiating the selling price and other elements of the process. If you are the seller and a buyer demands your grandmother’s antique hutch, you must explain why you won’t include a precious family heirloom. If you have an agent in charge, they handle the situation.
5. Gain Access to Other Professionals
Most real estate agents have a network of professionals to get the job done quickly. For example, if you are a buyer, you’ll want a home inspection. Your representative likely knows a few. If you are a seller, you may need to do some minor repairs. A professional can put you in touch with local handymen.
Disadvantages of Hiring a Real Estate Agent
There are a few difficulties in hiring a real estate agent, of course. Some of the disadvantages include:
1. Compensate with a Commission
The costs of working with a real estate agent add up. If you are the seller, you’ll pay 6% or sometimes slightly more. If you sell a $200,000 property, you’ll pay out around $12,000 in fees. Depending on the market, you may not get much more out of your home using a real estate agent.
2. Pay a Premium
Even though real estate professionals have a network of professionals they can call on, they may charge more than you can secure similar services for on your own. For example, you might get a cheaper percentage rate through another bank or pay lower points.
3. Compete with Other Clients
Agents work on commission. The more sales they make, the more income they bring in. They may have many other clients, both buyers and sellers, all vying for their attention. This can slow the process down for you and create longer wait times than you’d prefer.
Should You Hire a Real Estate Agent?
Carefully weigh the pros and cons of hiring a real estate agent. If you are buying or selling for the first time, the services of a professional can save you headaches. On the other hand, if you’re more experienced in home sales, you can save money by choosing a lawyer to handle the paperwork and avoiding the commission an agent charges. There isn’t a right or wrong choice.