Real estate is an ever changing field that comes with new rules and regulations that tend to change frequently throughout the buying and selling seasons. That being said, while you can potentially save money buying or selling your home on your own, there are far greater benefits from using a real estate agent.
Skills, Paperwork, Getting the Job Done
For starters, real estate agents are highly trained and skilled individuals that have been trained and are apprised of any changes or updates to federal and local law when it comes to buying or selling a home. This means that if there is some rule or some paperwork that needs to be filed prior to the sale they are going to know before the sale takes place. This makes for a much easier and faster process overall than one would encounter if they were selling their home on their own.
Commission vs. No Commission
In most cases the commission for your real estate agent is going to depend on whether you are the buying or selling party. In most deals, you do not pay commission to a buying agent when you buy a home. More typically, you pay commission to a selling agent when you look to sell your home. There is a simple explanation for this, selling agents tend to interact with more people and tend to do a bit more foot work than a buying agent. For those deals where the selling agent is the only one getting commission, the overall price of commission is generally 5-6% of the cost of the home.
In some cases however, both the seller and the buyer will pay commission to the buying and selling agent. In these cases, the average commission is going to be 2.5% to 3% of the price of the homes. Even if you do not use an agent, there are a wide range of fees and costs that are going to have to be paid to help facilitate the sale of the house. So why would an agent work with you if they were not getting any commission? Each sale gives agents a chance to learn, grow, and add to their portfolio. This means even without commission, each sale is still valuable.
Time, Effort, and Hassle
So how much money can you really save by using an agent? The real savings do not come in the form of not paying commission but rather they come in the form of the time you save, the effort you save, and the potential to get a better selling or buying price. Agents are trained to know the market, they know how much a home is worth, they know average asking prices, they know how much inspections cost, they know how much certain repairs cost, etc. this means that they have a much better bargaining tool than you would on your own.
Your agent has the ability to truly help you start to quickly and easily negotiate your selling or buying price to get you into your new house faster and easier than if you tried to do the same thing on your own. An agent has the ability and the tools that are needed to sell your home or help you buy your home quickly and efficiently. Say for instance you find a home you love but there are certain repairs that need to be done before the bank will approve your loan.
You have no idea how to approach the seller to have these repairs completed without it adding a large monetary amount to the selling price of the home. Your agent can negotiate a drop in price for your seller to allow the sale and give you the wiggle room to fix the issues yourself. They can also negotiate to help you get repairs fixed by the seller prior to the sale so that you can get into your home without issue.
Your agent also knows about breaks that can help you get things like credits toward your buying or selling price to save you even more money. One of the easiest ways that an agent saves you money is through showings. If you were to sell your home on your own it generally takes showing the home to several different potential buyers which means you will need to set aside several hours each week to do so. If you are not living in the home you will also need to travel to the location which again takes time and money.
Those sellers that are not using an agent will also have to answer questions about the property even if they are doing other things like going to work or relaxing. Overall hiring an agent is going to save you not only money but also time and aggravation making the buying or selling process much faster and smoother for all the parties involved.