Date: Sun, Nov. 17, 2002
KNIGHT RIDDER NEWSPAPERS
What do
Real Estate Agents know?
A whole lot, actually.
By: George Karvel
Q: What does a real estate agent do that an informed consumer can't do for himself? I've posed this question to several agents and they have yet to sell me on their trade for the price they charge. I feel with some research, I can bypass them and save the commission. Should I reconsider?
A: Everything you want to know about anything is on the Internet or in the library. With self-study, a person can be their own lawyer, surgeon, dentist, tax accountant or real estate agent.
Nationally, 13 percent of residential real estate sales were sold by owners (FSBO, or for sale by owner), not licensed agents. Statistically, most people use agents because of their knowledge regarding a complex legal and financial transaction.
The major benefits licensed agents bring to the home-selling process include:
• Pricing. Sellers lack market knowledge. What information they have obtained regarding the value of their home is likely erroneous. They are at great risk of selling their property for too little and equally at risk of overpricing and not selling their home at all. The market analysis provided by agents usually results in fair pricing that results in a sale in a reasonable period of time.
• Qualifying buyers. Some people's weekend entertainment is looking at homes they are not financially qualified to buy. Agents, to best use their own as well as their client's time, interview and eliminate "lookers" who are not financially qualified buyers.
• Negotiating. We all like to think we are effective at dealing with problems and negotiating the price and terms of a sale. Sellers rarely have the objectivity and skill to elicit and identify the buyer's objections to buying. Selling a home is more than just setting the price.
• Legal. Real estate agents are not attorneys nor do they substitute for legal representation. They are, however, licensed and trained to draft purchase agreements and appropriate contractual addenda, and ensure that all appropriate disclosures are made.
• Problems. Real estate agents only earn their commission when the sale is closed. Consequently, they must pay close attention to ensure that problems with title, documentation and financing or any other issues are resolved in a timely manner.
Most people who write me have created a mess that could have been avoided if they used an attorney and a real estate agent when buying or selling their property. Professional services are costly, but cheaper than resolving problems after the closing.
By
the way, most FSBOs -- after one experience representing themselves -- vow never
to do it again.
George Karvel holds the Distinguished Chair in Real Estate at the University of St. Thomas in St. Paul, Minn. E-mail questions to gkarvel@aol.com. Include name, city and state.
Last updated: 01/03/06