Real Estate Agents Are Mandatory
Real estate buyers and real estate sellers often think by not using a real estate agent they are saving money.
Actually the opposite is the case. A few years ago I was referred to a seller who was in the real estate title business, thinking he knew real estate well enough purchase a condo on his own.
When I previewed the property I could see that on the south and east sides his land was slipping into adjoining yards. Luckily we did end up selling the property, but at a substantial loss. If this client had used a real estate agent to begin with, the agent would have insisted on a real estate contractor’s inspection. Then there would have been a discount in the sales price by asking for credit for a retaining wall.
Then there’s the example of a real estate buyer who knows it all by going on line and looking at photos and Zillow and Trulia estimates.
These estimates are computer generated and mostly based on square footage. This real estate automated value method is an over simplified valuation which does not involve a human being who has visited the property. It does not take into account parking, outside space, the height of the ceilings, storage space, light, floor plan or the condition. After previewing properties for years, Realtors know what red flags to look for—foundation condition, outdated systems, expansion possibilities and most importantly the subtle differences in neighborhood which in diverse metropolitan areas like San Francisco can vary street by street. Even Zillow’s founder’s property evaluation was off 25%!! So AVMs are not that accurate.
Furthermore a good real estate agent can help you determine what price to offer.
Realtors know what neighborhoods are hot and why, how long properties have been on the market and which lender offers the best financing terms as well as if they will actually come through with the loan. I do know of many cases when a real estate buyer has lost the property and even his earnest money deposit when the loan is not procured in the contract time period.
Nowadays in real estate transactions something always seems to come up—an unforeseen repair, an appraisal that isn’t high enough or a last minute disclosure. Real estate agents are skilled negotiators and problem solvers and can iron out the most complicated situations. They have a list of resources which they have built over the years and know who is good and who is not. And most importantly, they know other real estate agents to help bring the sale together. Good Realtors are constantly attending seminars, strategizing with their colleagues, managers and even their competitors. They are in real estate 24/7 and frankly the average real estate seller and buyer are not.
CONCLUSION: A little knowledge in real estate can be dangerous thing. Selling and buying property is a complicated process. Make sure you use an experienced Realtor to protect your investment.