The End of the Real Estate Agent?
In today’s society, most things are evolving towards a digital application. New websites and phone applications have completely changed the way we buy and sell real estate. As homebuyers or sellers, we now have instant access to large quantities of information at the tip of our fingers.
As such, it seems that the traditional role of real estate agents has been replaced by popular websites such as Craiglist, Trulia, and Zillow. Locating listings, viewing photos, and comparing properties is now something you can do while getting coffee, sitting in your car, or even waiting for a flight.
As a homebuyer or seller, you now have access to all this information when it was previously only available to real estate professionals. Which is why it’s no surprise today more and more people are reaching out to one another to sell their homes without an agent.
Buy or Sell Yourself and Save Money
With the help of the internet today, we are able to view property information freely. Before the internet took off those looking to buy or sell their homes were at the complete mercy of real estate brokers. Brokers who often had restricted access to property information, which made it extremely difficult for the average person to learn about individual properties without having to hire that real estate agent themselves.
This meant you being stuck paying their commission fees.
Luckily today you can place your home on many different listings sites for less than half what their commission fee would be. In addition, most real estate agents charge 6% at the final sale price of the home. That means if you sold your $200,000 dollar home without an agent, you would save around $12,000!
Negotiating directly with the other party is a proven way to save money, but is it worth it?
Benefits of Real Estate Agents
It’s a common misconception that all your real estate agent does is show homes and complete paperwork. The best agents have many skills including being adept negotiators and experts in their local market. An experienced real estate agent can assist a homebuyer by guiding them through the often-overwhelming housing marketplace. Experienced real estate agents can also share helpful advice on the true value of a home or inform you about the reputation of local neighborhoods and schools.
If you’re a homebuyer moving into a new area this type of information can be an invaluable resource. Brokers who have mastered the local market may also assist sellers by helping them stand out among the local competition.
In most cases, an experienced agent will do everything they can to make the process of selling or buying a home as smooth as possible.
Should you hire an agent or do it yourself?
It depends on the person.
While you can certainly save money by buying or selling on your own, it does require hard work and planning. Running the show yourself gives you the freedom to work at your own pace. While on the other hand, hiring a real estate agent puts them in the driver’s seat. An experienced agent sets dates and schedules showings in an attempt to sell the home as quickly as possible. Some agents may be able to negotiate a better price for the home compared to what you may be offered on your own.
Of course, if you choose to hire a real estate agent you are agreeing to pay their expensive commission fees.
The traditional role of the agent standing in as your middleman is evolving. With multiple listing services available online many people are able to find what they want without needing the help of a traditional broker.
Because of this, commission rates are changing and more savings are being passed down to both buyers and sellers.
SurveyMonkey recently conducted a survey and found that one in four home sellers now sell without a traditional full-service agent. The survey went on to note, “Sixty percent of people who sold a home in the past year said they got a discount on the commission they paid to their real estate agent. The average discount was 41 percent off the typical commission.”
46% of people who bought a home in the past year reported their agents giving them refunds and rebates with the average savings amount being $3,693.
Why Sell Without an Agent?
The reasons people are selling without a full-service agent ranges. For those selling their homes for less than $750,000, the SurveyMonkey survey reported, “Saving Money” was their biggest reason to forego the traditional process. For those who sold their homes for $750,000 or more, they reported that they, “Don’t think a full-service agent is necessary” when selling their property.
While saving money and not thinking a full-service agent is necessary were the first and second most selected options, people also chose to not sell their home with a full-service agent because they “Don’t trust real estate agents” and when they “Couldn’t find an agent they liked.”
What this survey reveals to us is that the real estate market is changing. The traditional full-service broker role is going to have to grow as consumer’s change their home buying and selling practices. People are searching for an alternative to the traditional real estate model and agents are being forced to change their pricing methods.
So what gives?
Today’s real estate market is gradually being filled with millennial buyers and investors. Millennials want more control over the buying and selling process and this is changing the fundamental process of selling and buying homes. In response, traditional brokers are starting to offer a variety of different refunds and commission reductions to stay competitive.
For Sale By Owner?
In 2014, for sale by owner (FSBO) accounted for 8% of home sales. The typical FSBO home sold for $210,000. Those who sold their homes without a real estate agent used a variety of methods to market their property including:
- Yard Signs
- Open House Showings
- Online Advertisements
- Print Advertising
- Social Networking (Facebook, Twitter)
- Multiple Listing Service (MLS) Websites
The most difficult tasks for FSBOs, according to a survey completed by the National Association of Realtors, was selling within the planned length of time and understanding/completing the appropriate paperwork. So while sites like Zillow and Trulia make it easier for the average person to evaluate their options, there is still some technical aspects that can make buying or selling a home tricky.
If you use a website like Zillow to sell your home in Phoenix or Arizona, you still have to take care of the other tasks associated with selling the property. These tasks may include:
- Scheduling Showings
- Filling Out Paperwork
- Finding a Title Company
Of course, if you’re comfortable in your ability to run the show and sell on your own, then do it!
You will save thousands in the process and will have complete control of the entire transaction from start to finish.
What is the REAL benefit to Hiring a Professional Agent?
The real benefit to hiring a real estate agent is their ability to price homes correctly. When you price your property too low, you’re leaving money on the table. On the flip side, pricing a home too high will see the property sit on the market for months, which in turn, ends up costing the seller as the listing becomes stagnant. There is a happy medium that many experienced agents understand.