- A Realtor’s value is NOT primarily about finding you your home.
- If it were, buyers’ agents wouldn’t exist – the Internet would have replaced them
- Your Realtor should be bringing a lot more to the table than just a list of homes to view
So, I’m a Realtor. The title of this article is obviously an attention grabber. Obviously a Realtor can help you find a home. And you should use a Realtor when buying a home, no ifs ands or buts.
I’ve worked with people who have complained that they found their current home themselves and that their Realtor did nothing. The buyers found it online, or driving through the neighborhood, or on a recommendation from a friend. In their minds, their agent failed at their primary job – finding a home – and therefore failed them.
Maybe the agent did fail them. But “not finding the home” probably wasn’t the reason why.
Reflecting on what I do for my buyers and how I help them, finding their home is one of the least of my responsibilities. Why? Because it is the Internet age. I have access to the MLS, yes. But so do they – literally hundreds of websites exist online that have almost all of the same information about homes for sale that I have.
I would have to be pretty arrogant to think I know what my buyers want better than they do. I have my own biases, preferences, and ideas about what makes a “good home” that my buyers may not share. Frequently I will view a home with a buyer and am surprised that they love it. Or maybe it’s a home that I think is perfect for them that they actually hate. Maybe it was some feature of the home that wasn’t on their original wish list, so I didn’t know about it. I do my best to learn about their interests and needs, but short of some Freaky Friday body swapping, my buyers are going to be better at finding homes they’re interested in than I will ever be. I just have to accept that fact.
It wasn’t always that way…
The Book of Secret Homes For Sale
Come sit around the fire and I’ll tell you a story about the dark and fearful time before Internet and the World Wide Web. Once upon a time, the only way to know which homes were for sale was the book. The MLS book, which was published once every month or so. The only way to read this magical book was to talk to the Bookmaster, your real estate agent. Then, together, y’all could thumb through the pages of this massive, well used catalog, find a few interesting homes, and then put the book back in it’s place. If you wanted to casually check it out again at any point, you’d have to come back to your agent who, like a librarian, would drag it back out so you could thumb through again.
Now, in the 21st Century, what does one do if they want to see what homes are for sale? They hop onto Realtor.com (or their agent’s search page) and in three clicks see everything on the market that meets their criteria. They can search the distance it is from their work, look up school ratings, crime stats, and check out the neighborhood’s Facebook page for insights. All the information is there for free with no middle man. It’s the Information Age!
In fact, sometimes they may even see more home options than their agent would. Zillow is a popular place for For Sale By Owners to post listings that a Realtor won’t see on the MLS. And sites like Realtor.com aggregate homes from all the MLS boards, while agents can only search the MLSes that they are members of.
It has become easy to find homes. You don’t need an agent to do it, anymore! And yet the Internet hasn’t killed off buyers agents as a profession. Why not?
Because “finding” homes is not your Realtor’s primary value to you as a home buyer.
What is a Buyer’s Agent for?
If finding the perfect home isn’t my job, what is?
Keep You From Overpaying
This item alone can be worth the commission and then some (a commission the seller pays, anyway). Finding a great home is easy. But is it a good price? How would you know?
A good agent will be able to create a CMA, or Comparative Market Analysis. A CMA looks at recent sales in the neighborhood, and then tries to compare those homes to the one you’re interested. No two homes are exactly alike, so it isn’t a perfect science. But it can easily save you $10,000s by knowing what a fair price is for the home.
You’ve found a great home that you like a lot. You found it on Realtor.com, asked your agent if you could see it, and it blew you away. You’re ready to sign a contract today!
But did you know there is a home in the same school district but with a better backyard on a cul-de-sac?
A Realtor can make recommendations on other homes to view in addition to the ones you’ve found yourself. For example, I recently took a buyer around to view eight resale homes, a foreclosure, and two builders in the school district they were looking in. They had a favorite going in, and are still moving forward with that one. But they got a complete picture of ALL the options available to them, and can now be confident in their decision that this is their best option.
This is an especially important service for people buying from a builder. You may see a great $230,000 brand new home. But did you know the exact same floorplan is for sale in the neighborhood as a resale, built just 3 years ago and for $20,000 less? $20,000! This is the kind of research and assistance a Realtor can bring to the table.
You found the perfect home driving around the neighborhood and looking at yard signs. It has a pool, a huge extra living space in the converted garage, and a sweet half acre lot. Your agent didn’t do a thing!
Though, they might have reminded you that you’re only staying in the area three years, at which point you would either have to resell the home, or rent it out. Homes with pools make for very poor rental properties because of liability issues and maintenance. Converted garages probably don’t sell as well as homes with space for the cars to get out of the heat. And while you may be in the half of the population who loves the space of half an acre, the other half dreads the idea of watering and mowing that much grass.
A Realtor works with buyers and renters every day. He knows something about what other people like, which is important to know if this isn’t going to be your forever home. They can steer you toward homes that are broadly appealing and will be easy to sell or rent when the time comes.
The cost of failing to plan ahead is to have a home that sits on the market, unsold, or that can’t sell for what you gladly paid for it – which can easily cost you $10,000s.
You saw the listing agent’s photo on Zillow and thought to yourself “I’ll skip the middle man and just make an offer directly to the seller”. You offer $5000 under their asking price and, to your glee, they accept it right away!
What you didn’t realize is that you also didn’t ask for a home warranty ($475), title policy ($500-$1500), survey, ($525), or closing costs ($3000-$6000). The seller had budgeted and planned on paying for these things, but you didn’t ask for them. So they may have dropped the price $5000, but they made that up and more in the other seller concessions they didn’t have to pay.
Or maybe the sellers didn’t care much about price, but just wanted to get it sold ASAP. Maybe you could have gotten away with a quick closing date and more earnest money (which is refunded to you), and gotten the price that was important to you.
At the opposite end – in a hot sellers market – maybe you end up in multiple offers on your dream home. An experienced Realtor will be able to guide you on how competitive your offer may be to ensure you are getting the best chance at your home without overpaying.
The cost of not having a Realtor for these items can again be measured in the $1000s. Every market is different – a seller who lives in Waco was shocked when I told him the seller often pays closing costs in our market. And the market changes every year. Knowing what to expect is an important value you get from your agent.
Navigating the Process
You’re under contract! The fun part is over and now the work begins.
Most of your time will be working with your lender to get them the documents they need. But your agent will have a long list of items and events as well to make sure this home really is your perfect home and not a lurking horror house of issues. Earnest money, option fees, inspections, utilities, title commitments, home warranties, surveys, pest inspections, walk-throughs, contingency dates, repair invoices, specialty inspections, reviewing leases, drafting offers, contracts and amendments, reviewing the CD for accuracy – all are just the basic components of getting to closing. None of this is rocket science, but it still requires a fair amount of experience and training. Having a Realtor to watch for these things is a big load off your plate when you are simultaneously trying to work with the lender, coordinate and prepare for moving, and still busy at your real job.
If you are a buyer searching for your home, use a Realtor. The first step is scheduling a buyer consultation where you and your agent will talk and get on the same page. After that, you will search homes online and your agent will also look for any they can suggest to you. But realize that you are still the most important person in your home search. Your Realtor will never know what you want like you do.
Realtors can still find your home. For example, many builders don’t advertise their homes extensively online. The best way to buy from a builder is to find a Realtor with knowledge of builders and recommend you to ones depending on what you’re looking for. Agent’s might also have “pocket listings” or know about homes that are not yet actively on the market. This is a somewhat shady way of finding a deal and I am personally opposed to the idea of “pocket listings”, but that is for a separate article.
Your agent should be a source of information, expertise, and experience, giving you confidence in your decisions about your home, guiding you through the process and possibly saving your $1000s if not $10,000s in mistakes or miscalculations. This is their primary value to you.
Finding the home is the easy part.
Disagree? Have experiences to share? Please post in the comments for everyone to see!