Question Do I really need a Realtor when the market is so hot? Answer by Carl Kvale, a real estate agent with Edina Realty, Alexandria
This question I think comes up a lot in a seller’s market, which is one where we see very few homes on the market and a lot of buyer demand. So it seems to beg the question… “Why do I need to hire a realtor to sell my home when it’s so easy to find a buyer?”
I’ve been helping people buy and sell homes in the Alexandria area for over 20 years now, so I’ve worked through good markets and bad markets. We typically think of a “good market” as a “seller’s market” in which values are increasing, and a “bad market” being a “buyer’s market” in which values are decreasing. The truth is, both types of markets pose challenges. It just depends on whether you are buying or selling and why. And what I call the “rules of engagement” are dependent on which type of market you are finding yourself in.
Carl Kvale, a real estate agent with Edina Realty, Alexandria.
So back to the original question… “Why hire a realtor to sell my home when I can find my own buyer?” Well I think it’s important to talk a bit about what it is that you are spending your dollars on when you are paying out a commission to a realtor. Does the entire value of a realtor boil down to simply finding a buyer? If it does not, then how much of that commission should I feel is going toward the efforts of a realtor in finding a buyer for my home? I think these unanswered questions are a paramount issue in the real estate industry. I feel that the industry I work in does not do a great job of helping the consumer understand what it is they are really paying for. It is the real estate industry’s own fault that the average consumer places the brunt of an agent’s value on simply finding you a buyer. Because we brag about how good we are or how fast we are at finding that buyer. Plain and simple. This convinces the general public that this is where the majority of value in a Realtor lies. But this is NOT the case.
For a number of years now I’ve been saying that finding a buyer for your home is a small sliver of the value I bring to you as a seller. Just like on the buy-side, finding you a home is a small percentage of the value a good realtor offers. Because let’s be honest, in today’s marketplace anyone can find a buyer on their own. And with all of the listings on the Internet, a buyer can find a home to buy. So what is it then that you are gaining as value from an experienced and ethical realtor? Advice.
I believe it truly comes down to the quality of the advice that you will gain from a realtor that determines the value you are paying for. The danger in not hiring a qualified Realtor lies in the danger of “not knowing what you don’t know!” Often folks make mistakes without even knowing it. They simply don’t have an understanding of the complexities of the real estate market to know when they have made a mistake that cost them potentially thousands, if not tens of thousands of dollars. From incorrectly pricing their home, or not understand how marketing to reach maximum exposure affects them, to not being versed in the art of negotiations. From saying the wrong thing to the other party you are negotiating with that hurts your negotiation leverage, to not understanding how the terms of an offer can often be as important as the price. An experienced and ethical Realtor will give you valuable advice on each and every small and large decision that needs to be made throughout the process of buying or selling a home. I’ve learned that something as small as how fast or slow we respond to an offer can affect how negotiations proceed to one’s advantage or disadvantage. These subtleties or what I call “dust particles” of the real estate market and process of selling or buying real estate, truly are where the difference is made in making or losing money. Between being a winner or loser in the game of real estate.
So then, the key to ensuring that you are maximizing your profits on a sale, or not overpaying on something you want to buy, or winning the battle of negotiations, is to find yourself an experienced and ethical Realtor. The dollars you are paying in commission go toward protecting your money based upon quality advice. And very little of that money is going toward finding you a buyer or a home. Yes I know this goes against conventional thinking, and even flies in the face of what the real estate industry itself promotes as value to you, the public. But when we think about any professional we hire to counsel us in an area in which we are not experts, it is the knowledge and understanding that professional possesses that is the true value we are paying for.