Investing in real estate is good for your future but might not be good for your heart. Depending on how well you play your cards it might save you a fortune or cost you an arm and a leg.
In majority of the housing deals, the buyer, the seller or both bring in a real estate agent. These realtors are the ones whose commissions are at state and they would never let you know some things out of everything that you ought to know. These are the facts that are not music to the ears but are very important for buyers. For instance, the agent will never let you know if the house you are out to buy is unreasonably expensive or the price you have offered is more than the market price of that area. Overpayment is the buyer’s blunder and he has to take the onus for it.
It is important to know a few key points that you should include in your homework before you are planning to hire a real estate agent.
1. You can sell your house without hiring a real estate agent
If you are ready to give your best shot to explore pricing and do a lot of photography, your chances of being a successful seller of your home is very high. If houses are selling like hot cakes around you, the only work for you remains to put up a ‘For Sale’ placard and pick the offer that suits you from the pile in front of you.
If you are the seller of a house, you should be well aware of its worth, because asking too much might leave your house unsold forever and pricing it low means getting into a deal that brings in nothing but loss. Likewise, if an overpriced house is later tagged with a lower amount, it will dodge away potential buyers because then it will not feature in the new-home buzz.
2. Get your own buyer, save commission
There is a popular belief that if you hire a real estate agent to sell your house and someone in your circle of acquaintances comes to know that your house is for sale, you are legally bound to do the deal through your agent in case an offer comes through. The easiest way out in this case is to put down in writing, any legitimate prospective buyers who have shown keenness in the house, before a contract is signed with a real estate agent. This way, if your prospective buyer wants to close the deal, you are not obligated to go through the broker or pay him commission.
3. You can negotiate on commission
When you sign a contract with an agent to sell your house, negotiating is always an acceptable part of the process. This becomes much easier when the agent who is selling your house and the one who is getting you to buy a new one are the same. Negotiations are easy when the deal is on expensive homes. Sellers should negotiate commissions in such a way that the agent feels that he has stiff competitors around who are more seller-friendly in terms of quoting commission. If both the buyer and seller are stuck on the price, agents are known to depreciate their commission to accomplish the deal.
4. Open house does not work for you
Hosting social open houses to sell your house does not have a high success rate. Not many of such social gatherings have resulted in successful sales for the simple reason that buyers rely more on the Internet to look for homes. The reason that some agents are keen to host open houses is that they get a free flow of people who are looking to buy homes, without the agent requiring to make any effort. In open houses, brokers can distribute their visiting cards, get hold of new business at a ready-to-use venue; your house, to market their services.
5. Size of agency does not matter
Big brands in real estate with huge marketing budgets do not mean that they are the best or better than the rest. On the contrary, the downside is that they barely compromise on commission in comparison to smaller agencies. Also big realtors are overstressed which means it is a slim chance that your work gets the right kind of attention. Smaller realtors are more likely to be better in terms of customer service. The point here is that your agent should be qualified for the work and should be able to devote the required time for it.
6. Look for the fine print in your contract
Home buying and selling contracts are usually made by real estate brokers. The important part to look out for is the ‘Disclaimer’. This section might say that you are playing the role of a buyer in this sale and without any dependence on oral statements from brokers or sellers. Obviously, even in practicality, you do not have much to rely on. To ascertain that your contract does not have a clause to waive off rights and that it has clauses to safeguard your rights, hire a legal professional to scrutinize the agreement. For one of the most important investments of your life, an additional fee to make certain that your contract is fair will never hurt.
7. Price is not always the most important factor
The belief that a real estate agent will work hard to get the highest price for your house is not always true. In case where the agent has more than one transactions in his kitty, he might not want to spend more time on getting a good price for your house when he can get two deals done in the same time frame. The total earnings for the broker in both these deals might be much higher than in a single one. Agents at times focus on higher volumes even if they have to compromise on the price simply to avoid the risk of losing other transactions.
8. Buyers and sellers can validate the conduct of brokers
It is always better to do a validity check on the conduct and track record of realtors. Buyers and sellers should make it a point to check the track record of any agent they are considering to hire. Picking an agent who has no record is inviting chances of bad deals or unproductive offers.
If you ought to hire one, get the best agent
All realtors have skeletons in their cupboards but it does not mean that they are suspicious. Deciding on not using an agent means agreeing to put in extra effort and time to go through prices in the realty market, do your own home hunting and learn the inside-outs to close a deal without an agent.