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In A High-Tech World, Is There Still a Need for Real Estate Agents?

At HomeLight, our vision is a world where every real estate transaction is simple, certain, and satisfying. Therefore, we promote strict editorial integrity in each of our posts.

With so many online options available to help sell your home, is there still a need for real estate agents? Turns out, there are a few things technology still can’t do.

In today’s digital world, using technology to compare, research and purchase products has become the norm. We can order our groceries online, have a car delivered to our driveway, and in real estate — peruse multiple home listings in one sitting.

A quick Google search can tell you current market trends, what homes are selling for in your area, and provide you step-by-step instructions on how to sell a home.

From listing websites to automated online services, technology has made things very DIY these days. But how does technology fare when navigating one of the biggest transactions of your lifetime? Like, selling your home? With all these online advancements, do you really need a real estate agent to sell your home? Or, like many other things today, can you do it yourself?

To answer this question, we’re taking a closer look at what technology in the real estate industry can, and can’t do for you, and discussing when and why you may, or may not, want to hire a real estate agent.

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What does a Realtor® do that high tech can’t?

Clint Ford, a real estate agent who works with over 67% more single-family homes than the average Grove City, Ohio, agent says a big difference with consumers today is how much more information they have.

“Part of the job of being a good real estate agent now is helping the consumer sift through the good information and the bad information,” says Ford.

Real estate agents are there to answer questions, help ensure all legal documents are in order and navigate any unexpected road bumps to keep transactions moving along smoothly. Other benefits and services Realtors® provide that high-tech can’t, include:

  • Acting as a liaison between buyers and sellers
  • Handling complex offers, counteroffers, and negotiations
  • Knowing the ins and outs of the local housing market, pricing strategies, and latest trends
  • Ensuring homeowners comply with all local, regional, and state real estate laws
  • Investigating financial offers for any bumps, cracks, or potholes

What does a Realtor® do for home sellers?

The National Association of Realtors (NAR) reports that 90% of home sellers today partner with real estate agents when selling their homes.

Real estate agents bring years of knowledge and experience in navigating multiple selling situations that can help guide buyers toward the right deal for them. They also assist sellers in staging their homes for showings, and can use their trusted network of local experts to help sellers with any needed home services.

More benefits Realtors® bring to the selling table are:

  • Listing a home on the multiple listing service (MLS)
  • Marketing of the home to a broad audience (through technology and traditional methods)
  • Helping guide homeowners through the selling process, vetting out better deals or red flags
  • Coordinating inspections and appraisal services
  • Navigating any complexities involved in the closing process

What does a Realtor® do for homebuyers?

According to the NAR, 87% of buyers purchase their home by working with a real estate agent or broker. For first-time homebuyers, having a real estate agent’s guidance through contracts, agreements, contingencies, negotiations, and other elements of the homebuying process can be an advantage.

“I’ve been in the business for about ten years, and other than the change in the market, I don’t remember if there was ever a time where there was such a lack of inventory,” says Ford.

Therefore, Ford explains, it’s important to have a knowledgeable agent who understands how to make their buyer’s offer stand out compared to other buyers. This could depend on the type of lender being used, the financing secured, or what a financial institution might offer a buyer who’s in great standing.

Additional help Realtors® provide to buyers, include:

  • Ensuring certain clients have proper financing (whether cash or are approved for a mortgage)
  • Selecting homes based on homebuyers’ current and future needs
  • Using online and in-person search methods for locating the most fitting homes
  • Handling arrangements for inspections, appraisals, etc.
  • Helping navigate the closing process and submittal of all paperwork
A couch in a house that needs to be staged by a real estate agent.
Source: (Uliana Koliasa / Unsplash)

What if you choose not to use a Realtor®?

Choosing to sell your home FSBO (For Sale By Owner) is a brave move — and one that, if done right, can sometimes result in a satisfying reward. One of the biggest draws for sellers to list their residence FSBO is the promise of not having to pay any real estate agent commission fees, which average 5.8% of a home’s sale price.

Forgoing commission fees means you get to keep all the profits. Yay! But before you get too excited, keep in mind that also means you’ll be in the driver’s seat of selling your home, which can be a big-time commitment and could result in a lower sale price.

The NAR reported in 2020, the average FSBO home sold for $58,000 less than homes listed with real estate agents. This is possibly a major factor in why only 7% of home sales are FSBOs.

When listing a property FSBO, you’re in charge of handling all the ever-important details that real estate agents usually manage. A few of these time-taking tasks include:

  • Marketing your home for sale
  • Hiring inspectors, appraisers, attorneys, etc.
  • Scheduling showings and open houses
  • Negotiations
  • Staging, arranging professional real estate photos of your property
  • Maintaining communication with interested buyers
  • Paperwork (offers, counteroffers, sale contract, disclosure forms, etc)
  • Ensuring proof of funds or pre-approval financing

Extra work aside, Ford says that sellers with the right experience who list a property FSBO can end up saving money.

“Somebody who has experience in owning homes or several properties, they probably know enough and know what they have. And they may save several thousand dollars by not having an agent sell every single one of those properties.”

Learn more about the pros and cons of listing your home FSBO versus working with a Realtor® here.

Using an iBuyer instead of a Realtor®

Another high-tech option that’s surfaced in recent years is selling your home to what’s called an iBuyer, or instant buyer.

Selling to an iBuyer is typically quick and simple. You submit a short questionnaire about your home and then receive a cash offer. There’s no staging your home, no scheduling showings, and perhaps best of all, no repairs. Selling to an iBuyer means selling the home “as is” to a company like Opendoor, Offerpad, or RedfinNow, sight unseen, for a cash offer in hand.

Pros of using an iBuyer

Many who choose the iBuyer route are looking for a quick sale and closing process. This could be because they want to skip all the inspections, negotiations, and paperwork that goes into a traditional home sale, or perhaps they just want to sell the house as quickly as possible, such as an inherited property in another state.

Key benefits of using an iBuyer:

  • Almost instant sale
  • Ease and efficiency
  • Cash offer
  • No home preparations or repairs
  • Certainty of a guaranteed sale
  • You can often pick your closing date

Cons of using an iBuyer

iBuyers charge a fee for their services, sometimes higher than what you’d pay a real estate agent. Also, when selling with an iBuyer instead of a real estate agent, you’ll likely make less on your home sale. iBuyers often offer near market value, but since they’re taking a risk in purchasing your home, their offer is typically lower than that of a traditional home sale.

Other cons include:

  • Possibility of deductions if an inspection finds big, necessary repairs
  • iBuyers aren’t available in all communities
  • No negotiating
  • May have high service fees
  • Stand to make less of a profit

Selling to an iBuyer is useful when you’re crunched on time and need to sell your home ASAP. Maybe you’ve already purchased a new home and are ready to move in, or are relocating and want cash-in-hand quickly.

Whatever your circumstance, if you’re looking to sell, and sell fast, give HomeLight’s Simple Sale Platform a try. Using this tool, HomeLight can provide a no-obligation cash offer to buy your home. If you accept the offer, you can often close in as little as 10 days.

A pencil used to take notes about a real estate agent.
Source: (Tamanna Rumee / Unsplash)

Q&A: Frequently asked questions about real estate agents

Are real estate agents obsolete?

Technology today gives sellers and buyers the ability to do more than they ever have before, but real estate agents fill in the cracks where technology can’t; negotiating offers, guiding buyers and sellers through financing, hand-picking homes best suited to their client’s needs, fielding calls and emails, and managing all showings and marketing. They can take the stress out of selling.

What’s the difference between a Realtor® and a real estate agent?

When a real estate agent becomes an official member of the NAR (National Association of Realtors), the largest professional association in the world, they earn the trademark Realtor® which means they abide by the NAR’s strict code of ethics. Where a Realtor® can be a property manager, appraiser, or real estate broker, a real estate agent who is not a member of the NAR is typically only licensed to assist in the buying and selling of property.

Are Realtors® in demand?

The U.S. Bureau of Labor Statistics predicts that from 2020 to 2030, real estate brokers’ and sales agents’ employment will grow by 4%. Though this percentage is lower than in other occupations, the Bureau projects this growth will lead to 47,5000 real estate broker and sales agent openings.

How do you become a real estate agent?

First, you must be at least 18 or 19 years old (depending on state requirements), have a high school diploma or GED, and pass a background check. Requirements vary by state — so be sure to check out your state’s guidelines — but the general steps to becoming a real estate agent are:

  1.     Find a real estate school
  2.     Take an education course approved through your state (hours will vary)
  3.     Pass the state and national licensing exam
  4.     Apply to activate your license
  5.     Work with a licensed brokerage to gain experience
  6.     Consider joining the NAR and pursuing further education, certifications, etc.

How much do real estate agents make on average in a year?

ZipRecruiter reports that real estate agents make a national average of $82,800 a year. This number can vary depending on location, years of experience, market trends, and niche.

In every major industry in the world right now, technology is king. The only thing that keeps the real estate market from being taken over as well is because you need the human relationship part of it. You need boots on the ground. You still need advice on how to sift through the ‘wolves’ out there.
  • Clint Ford
    Clint Ford Real Estate Agent
    Close
    Clint Ford
    Clint Ford Real Estate Agent at Corcoran Global Living
    • Years of Experience 10
    • Transactions 216
    • Average Price Point $238k
    • Single Family Homes 209

Is it better to use a real estate agent?

“In every major industry in the world right now, technology is king,” says Ford. “The only thing that keeps the real estate market from being taken over as well is because you need the human relationship part of it. You need boots on the ground. You still need advice on how to sift through the ‘wolves’ out there.”

In today’s world, there’s no shortage of choices when selling your home.

If you’re an experienced real estate investor with a few home sales under your belt, then maybe a FSBO option is a good fit for you. If you’re looking to sell your house for some quick cash, then selling to an iBuyer may be the ticket. If you’re listing a property for the first time and want to turn the biggest profit you can, then working with an experienced professional like a real estate agent can give you an upper hand.

Whether buying or selling a home, real estate agents bring forth experience and value that rivals the offerings of high tech. To find real estate agents that sell homes faster and for more money in your area, try HomeLight’s Agent Match. Agent Match analyzes over 27 million transactions and thousands of reviews to determine which agent is best for you based on your needs. Our service is 100% free, with no catch. Agents don’t pay us to be listed, so you get the best match.

Header Image Source: (NASA / Unsplash)