Toronto: In difficult economic times, the majority of people will look for any opportunity to save money. And who wouldn’t want to save an additional 3% – or $3,000 per $100,000 of the sale price – on a home purchase? That is the typical commission earned by buyer’s agents in real estate transactions, and most experts believe it is money well spent.
It is true that anyone can shop for a house and even take a look inside without engaging the services of a real estate agent. However, unless you have the time to devote to home shopping on a part-time basis, an agent may be able to connect you with the ideal property much more quickly.
Assume you desire a swimming pool. Or you simply do not desire a swimming pool. Alternatively, you may desire a fenced-in yard for your dog or a basement playroom for your children. If you’re looking for something specific, a real estate agent is the person who will know if there is a house available that meets your criteria, and will also hold your hand throughout the transaction. Consider some of the primary advantages of working with an agent when purchasing a home.
10. Ethical Consideration
While not all real estate agents are members of the National Association of Realtors (NAR), those who do agree to adhere to the organization’s code of ethics. This code essentially requires Realtors to act honestly toward all parties involved in a transaction.
The Realtor is required by the code to put the clients’ interests ahead of his or her own. Additionally, he or she is required to disclose all defects in a property and to be truthful in advertising.
The code of ethics has teeth; it is enforced by local boards governed by the NAR. A $5,000 fine, a one-year suspension from the association, or a three-year expulsion are possible penalties. It is unknown how frequently this occurs. Due to the fact that local boards administer enforcement actions, there are no national statistics on penalties levied against Realtors [source: National Association of Realtors].
9. Expertise in Pricing
The majority of real estate agents can price a home immediately upon entering. If they have extensive experience in a market, they will also understand how well a neighbourhood retains its value.
While anyone can spend a few minutes online researching comparable home sales, real estate agents have the experience to determine whether a particular home is over- or under-priced. In the best-case scenario, an agent will have such a good sense of what you’re looking for that she will save you time by not wasting your time touring houses that won’t work. Agents can not only provide you with all the data on local home sales that you desire, but they can also bring assets to the table based on years of observing waves of transactions in the neighbourhood.
8. Submitting Requests for Repairs
Frequently, the most delicate aspect of a real estate transaction is the delicate dance of requesting repairs. A real estate agent will be able to spot issues that you may miss, as well as recommend a reputable independent home inspector who will provide a detailed report on the house’s condition.
These reports can run into the dozens of pages. Throughout those pages, some issues are critical, while others are not. If the house is in reasonable condition, repair requests can make or break a deal. The agent will have a good sense of what constitutes a reasonable request and what constitutes an excessive request.
In many cases, it is also determined by you, the buyer. An agent can assess the situation and make recommendations about what would work best for you. “Each buyer has a different tolerance for what they need to do,” says Elizabeth Mendenhall, the National Association of Realtors’ 2011 vice president of committees. “Some people require a better-maintained home.”
7. Locating Available Housing
While the majority of homes for sale are widely available for buyers to evaluate on Web sites, some sellers do not want their sale to be widely publicised. In those instances, only real estate agents are aware that the homes are for sale.
“At times, people do not wish for it to be promoted actively,” Mendenhall explains. “Perhaps they’re selling for a more personal reason; they don’t want their neighbours or friends to know.”
Occasionally, health problems, financial difficulties, or divorce contribute to the desire for privacy. Alternatively, some individuals do not want the sale advertised during the holidays. In either case, working with a real estate agent provides access to homes that you might not have seen on your own.
6. Taking Care of the Paperwork
If you’ve ever purchased a home, you’ve probably dedicated an entire shelf to the documents associated with the transaction. These are likely to include the written offer, the written and signed counteroffer, minor details (such as specific repairs), and the specific items included and excluded from the sale. Paperwork can be tedious.
This is when a knowledgeable real estate agent can come to the rescue. Frequently, these offers and counteroffers are time-limited. The agents are armed with fax machines that never stop churning out paper in a healthy economy.
When you work with someone who understands the paperwork inside and out, your chances of missing something, failing to initial a margin, or failing to check a box decrease significantly.
5. The Phenomenon of the “Purple Room”
Apart from the technical aspects of a sale and the errors that can occur during the paperwork process, real estate agents are intimately familiar with neighbourhoods and houses.
Mendenhall refers to this phenomenon as the “purple room.” If a buyer requests a house with a purple room, she says, an experienced real estate agent will be able to locate one that is currently for sale.
More broadly, an agent will be aware of features that are not as visible on the Internet. If a buyer is looking for a home with an office, an attached mother-in-law unit, or a room ideal for displaying a prized grandfather clock, a human agent is more likely to find a match than a real estate Web site.
4. Negotiation Without Emotions
As levelheaded as you believe you are, it’s easy to lose your temper when arguing with a seller over adding a hose to the dishwasher because the water drains on the floor. Having an agent write the requests objectively and forward them to the seller saves you from becoming emotionally involved in the transaction.
Assume the seller is adamant about the dishwasher hose and you wish to amend your offer. That part, too, can be handled calmly by the agent. Experts advise you to defer to the agent during difficult negotiations.
The most effective way to close a deal is to look for the positive aspects of each offer and counteroffer and to never show the other party a sour face. Often, the most effective method of accomplishing this is to present the face of the business, not your own.
3. Expertise in Coding
If you wish to purchase a charming small house near a business district and convert the front parlour into a candle store, you must first determine whether the city will permit you to do so. Typically, an experienced real estate agent is familiar enough with local zoning ordinances to prevent you from purchasing the incorrect property.
By the same token, if you wish to construct a fence in the backyard or add a bedroom, an agent should be able to ensure that you are purchasing a property in which such modifications are permitted by the city. Additionally, some cities may require costly upgrades on older properties before they can be sold. For instance, if a house is not connected to the city’s sewer system and the buyer will be required to spend tens of thousands of dollars to connect the property, the real estate agent will ensure that this requirement is disclosed prior to the deal progressing too far.
2. Accurate Record Keeping
While real estate agents are not attorneys, they can be valuable resources years after a transaction is completed. Licensed agents are required by some states to maintain complete records of all documents pertaining to all transactions for several years.
While you may (and should) maintain files on your own, you can rely on your agent to keep that information organised and secure in the event that problems arise with the property in the future. Additionally, you’ll be able to contact your agent at any time over the next few years if you have questions about the property.
1. Preventing Closing Issues
When a sale is nearing completion, a variety of pitfalls can derail the transaction in the final hours. A real estate agent is well-versed in spotting potential problems before it’s too late.
For instance, the title to the property may be unclear — a long-lost relative may be listed on the title who has not approved the sale. Or perhaps the lender is causing a problem by failing to meet the financing deadline.
“As the closing date approaches, you want to ensure that there are no unexpected title issues, that financing has been secured, and that all of the professionals involved are remaining on task and on schedule,” Mendenhall explains. Real estate agents are accustomed to resolving these types of issues and are capable of overcoming almost any obstacle that arises.