Real Estate Frequently Asked Questions
Click on the questions below to find the answers to the questions.
Questions:
Do buyers need a real estate agent?
Do sellers need a real estate agent?
What should I look for when choosing a real estate agent?
What is involved in selling a house?
Should sellers sell their home FSBO?
What extra benefits can a real estate agent provide?
How much does it cost to use a real estate agent as a seller?
How much does it cost to use a real estate agent as a buyer?
Should I get a home inspection?
Should I measure my own house?
Questions & Answers:
Do buyers need a real estate agent?
While not required to use a real estate agent, buyers should certainly consider using a real estate agent to purchase a house, especially if they are first-time home buyers. Even investors who have bought dozens of properties used licensed agents for many different reasons, of which will be mentioned below. Buyers should get a real estate agent to represent them in a real estate transaction for several reasons. Firstly, as long as they are not buying from a For Sale By Owner (FSBO), they will not be paying any more for the property than if they would have bought without representation from someone other than the seller's agent. Secondly, all things equal, the buyer's agent can give the buyer more information and help them through the process to avoid any pitfalls. The agent can negotiate on behalf of the buyer to get a lower price for the property. The real estate agent can avoid giving information to the seller that the buyer may would have been given to the seller had the buyer not had representation. The buyer could be advised by the agent of any adverse factors that could affect the property that the buyer would never have thought of. For example, perhaps the condo complex was built on previously known wetlands and it is only a matter of time before the complex really starts to see a shifting change. (It has happened.) Perhaps the road is going to be widened, making the two-lane road into a four-lane highway. Not only will this produce more noise for the homeowner, but also will extend the road 15 feet onto the homeowner's property. The traffic will be closer to the home, and the yard will be reduced in size. (It has happened, too.) There are many other reasons that an inexperienced buyer should get an agent to represent them in a house purchase, and if it doesn't cost anything out of pocket then why not? Back to Top
Do sellers need a real estate agent?
While sellers are also not required to have a real estate agent represent them in the sale of their house, not getting representation in a real estate transaction is very similar to not getting a lawyer to represent someone in a court of law. Sellers should get a real estate agent, too. Sellers need an experienced party to represent them. Selling is a full-time job, and if the seller intends to save money, then the seller will need to understand that they will need to invest the effort and the time involved in the sale in order to get top dollar for their property, not to mention should be very knowledgeable about the present market conditions and real estate sales. Yet, even when the seller puts forth good effort and much time, without the experience a trained agent has the seller isn't guaranteed success. If a seller's house is worth 200K and the seller markets at 235K, then his time and effort is being wasted. Even if he secures a buyer, when the appraisal comes in, the home seller will have to face the reality of his home being unable to appraise. One part in a real estate agent's job is to tell a seller if the house is overpriced or not. Inexperienced sellers don't know the market value of their home, and wonder why their house isn't selling. Most of the time, it isn't the seller's effort put forth that doesn't sell a house. It is generally the seller's asking price that gets in the way of a sale. A good agent can help the seller price right from the start, get the house looking the way it needs to be, get the house on the market, and get the house sold quickly in relation to the market in its present condition. Sometimes 3 months is a good turnaround for a house in one market, when in another housing market it is not. Agents can also provide other benefits, like accurately measuring the house, distinguishing total square footage from living square footage, finding neighborhood restrictions, and much more. Back to Top
What should I look for when choosing a real estate agent?
1.) Full-time agent: Do you really want an agent marketing your house and also working part-time at the library? It takes a lot of work selling a house. Even before listing a property there is so much involved in preparing a house for sale that often goes unnoticed. Having a full-time agent will not only increase the likelihood of the house being marketed effectively and continually, but it will also mean that they are in step with the local real estate market.
2.) Experienced in your subdivision: The agent needs a past history of selling houses in your specific geographic area, better yet your own subdivision. If that agent has sold a house down the street in the same neighborhood, he likely can sell your house too.
3.) Creative: Sometimes creativity is what it takes to sell a house. Sometimes when everything else doesn't seem to work, a creative agent will think of a new possibility to help market your home better. This is key in a down market. Back to Top
What is involved in selling a house?
The sales process is basically this:
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The house is prepared to sell.
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Information is collected about the house.
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The house is advertised.
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The property is shown to buyers.
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Offers are made on the property.
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Negotiations take place.
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The seller and buyer agree on a price and terms.
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The buyer gives the seller a deposit.
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The buyer works with the bank to get financing.
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An inspection is done.
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Repairs, if any, are made.
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A walk-through is performed.
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An appraisal is done.
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The papers are signed and finalized.
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The seller receives funds.
Every sale is different and sometimes buyers cannot get financing or the seller does not have a clear title to sell, which postpones or delays this process. Back to Top
Should sellers sell their home FSBO?
For Sale By Owners (FSBO) often make the wrong decision by selling their house by themselves. Almost always the reason is to save the amount it will cost in paying two agents a commission on selling the property. It depends on how much time and effort they are willing to put forth to market their property, as well as their experience in selling real estate, but most of the time FSBO's end up losing more money than saving. Statistics show that FSBO sellers end up not selling for as much as those who use real estate agents. Not only that, but there are more services that real estate agents provide that far out-weight the monetary savings of selling FSBO. Back to Top
What extra benefits can a real estate agent provide?
Generally an experienced agent can sell your property for more than you could by your own efforts, sell it quicker, make the process smoother, reduce your liability and make sure that all matters of the sale are taken care of promptly. Back to Top
How much does it cost to use a real estate agent as a seller?
There is no set cost, but generally you can expect to pay around 5 or 6 percent of the ending sales price to list with an agent. Remember, that the agent who finds a buyer for your property from the efforts of your agent will get half of the total percent. So say, your house is listed with a 6% commission. Your agent will get 3% and the Buyer's agent will get 3%. Say your house is a $100,000 property. 3% of $100,000 is $3,000. Again, the commission rate is negotiable. If a property is marketed by a an agent and the property does not sale, the owner is not obligated to pay a commission to the real estate agent. Back to Top
How much does it cost to use a real estate agent as a buyer?
Nothing out of pocket when buying with a property listed in the MLS. If the property is a FSBO, the seller could pay the commission or you may need to pay a percentage of the sales price to your agent for finding the property. If the property is listed, then the seller has already agreed to pay the commission for both their agent and your agent. Back to Top
Should I get a home inspection?
Always. Home inspections will tell you everything an inspector sees wrong with the house. Inspectors can reveal to you problems with the house that you may never have even thought of. And with inspections only being a few hundred dollars they are well worth their weight in gold. Back to Top
If you are a buyer, absolutely. The bank will almost always require you to get a house appraisal if you are financing the house. It costs around $400 to $500 to get but is necessary to make sure you're not paying more than the house is worth. Your real estate agent will usually know if the house is priced right or not. As for sellers, you can get an appraisal of the home. Your real estate agent will of course do research and give you their estimation of value for the property, which may or may not be as accurate. It is recoomended that sellers get an appraisal if there are not a lot of comparative sales in the neighborhood or your property is significantly different than those around it. Also, remember that an appraisal is not fact, but rather an educated guess at a specific moment in time. As the market changes, home values will go up and down. Back to Top
Should I measure my own house?
You can measure your house by yourself, but your real estate agent can help you be more accurate in the properties measurements. It is very important to get your measurements correctly, as every square foot could mean a 100 dollar bill. And having an agent measure it, people will take your measurements more seriously. History tells that most times owner-measured houses are not accurate, approximated, or are simply not truthful. When agents measure a house, they have the experience necessary to accurately measure even the most difficult homes, as well as are held to a higher standard when giving measurements on a property. Back to Top
Still have an unanswered question? If so, email Engle Realty at David@EngleRealEstate.com and we will respond promptly.
