27 Aug Do we Really Need Real Estate Agents?
Wasn’t the internet supposed to drive them out of business? The online age has been hard on all kinds of middlemen, after all. Travel agents, for example, rendered obsolete by Orbitz and Expedia. Mortgage companies on line for clients not needing a one on one loan officer.
Soft goods retailers, for another, outpaced by Amazon.
The effect should be similar with people who sell homes: What do they have but what they know? And what of that can’t be better figured out through unbiased, publicly available data, crunched and presented on Web sites like Zillow and Trulia for free?
But the sector may have been overinflated anyway. During the boom, real estate was considered a fast way to make easy money, and the unserious didn’t survive when sales dried up. Real Estate companies did not train or support the agents.
The career business person in Real Estate benefited, because it got a lot of people out of it that shouldn’t have been in it. The ones who were in it as career, understood the transaction needs of the consumer.
And now, according to the National Association of Realtors, agents are as widely used as ever: 89 percent of buyers retained one in 2012, up from 69 percent in 2001. It’s the same on the seller side, where only 9 percent sold a home without an agent, down from a high of 20 percent in 1987. The reason is knowledge and understanding about what goes on during the transaction, and the importance of protecting the client.
Real Estate Companies are also challenging agents, they want more professional and Career driven agents. They want Realtors, not just agents. To be called a “Realtor” one must have National Association of Realtors, certification.
There are a few reasons why agents are still around.
The post-crash world is more complex: The housing crash and ensuing tighter lending standards, as well as the prevalence of foreclosures and short sales, have made the average transaction harder to navigate without expert help. Getting financing and negotiating tricky contracts, for example, probably shouldn’t be done on your own. Understanding disclosures makes the process more complicated.
The internet improves productivity: When buyers can find out the homes they want through online research, an agent has to spend less time touring them around. Then, they can come and help with closing. But there is other things that the agent must work on, understanding local ordinances, HOA regulations, title concerns. The agent of today must be more operational and pay attention to details and legal concerns. Able to seek out information for their client, through legal and accounting resources.
The internet increases agent leverage over brokers: In most states, agents have to affiliate with a brokerage. But when they can self-promote online, they don’t need as much in return. Agents are in a position where they can keep more of their money, because they’re not reliant on the brokerage to get their business. To adapt and add value, brokerages have scaled back on their office space–more agents now work from home, rather than a private cubicle–and offer trainings to deal with different market conditions. Most of the larger brokerages have old fashion large offices, and guess who has to pay for all that un-used space? (the agents). Companies like Exit Homewell Realty like smaller virtual/brick and mortar offices, and gives more efficient, support and resources to their agents and the client, Realtors like that.
The next step is a marketing plan. Often, your agent can recommend repairs or cosmetic work that will significantly enhance the salability of the property. Marketing includes the exposure of your property to other real estate agents and the public. In many markets across the country, more than 50 percent of real estate sales are cooperative sales; that is, a real estate agent other than yours brings in the buyer. At United Empire Realty we are plugged into several broker previews to expose our clients property to hundreds of Real Estate agents every week.
When a property is marketed with an agent’s help, you do not have to allow strangers into your home. Our agents will generally pre-screen and accompany qualified prospects through your property. Our agents follow California Association of Realtors home protection guidelines to protect the clients home and personal belongings.
The negotiation process deals with much the same issues for both buyers and sellers, as noted above under the buying process. Your agent can help you objectively evaluate every buyer’s proposal without compromising your marketing position. This initial agreement is only the beginning of a process of appraisals, inspections and financing — a lot of possible pitfalls. Our agent can help you write a legally binding, win-win agreement that will be more likely to make it through the process.
Monitoring, renegotiating and closing
Between the initial sales agreement and closing (or settlement), questions may arise. For example, unexpected repairs are required to obtain financing or a cloud in the title is discovered. The required paperwork alone is overwhelming for most sellers. Our agents are the best person to objectively help you resolve these issues and move the transaction to closing (or settlement).
Why use a REALTOR®?
You be the judge – People still don’t trust cheap things:
Real estate transactions involve one of the biggest financial investments most people experience in their lifetime. Transactions today usually exceed $100,000. If you had a $100,000 income tax problem, would you attempt to deal with it without the help of a CPA? If you had a $100,000 legal question, would you deal with it without the help of an attorney? Considering the small upside cost and the large downside risk, it would be foolish to consider a deal in real estate without the professional assistance of a REALTOR®.
Buying a home is a big decision, and people don’t tend to want to take a risk on a cut-rate agent, which is why there hasn’t been much undercutting or negotiation of commissions. It does take place, but at the end of the day, this is the biggest asset the consumer ever owned, so people expect top drawer service and knowledge, we at United Empire Realty believe in supporting our agents to be the best, to train and support them everyday, no question is dumb or too small. Today you must be almost a 24/7 service provider for the Realtor, because their client expects that service from them.