There’s a reason only 8% of home sales were FSBO (for sale by owner) in 2017. And it’s not just the daunting mounds of nitty gritty paperwork involved (though that’s part of it). The best real estate agents in the nation, the ones who have to turn down clients because they’re so slammed with business, tell us that it’s their hard negotiating skills and objective lens that sellers need the most.
It’s the little moments at the kitchen table when you can’t decide if you should accept an offer or counter. It’s wondering whether you should trust a buyer who your gut tells you isn’t serious. It’s someone who can tell you straight that your asking price is laughable.
It’s the help you never knew you needed until you’re in over your head.
The problem is…if you wait to hire an agent until your contract’s hanging by a thread or after your home’s been sitting on the market for months, the damage to your sale has been done. It’s a lot more difficult to clean up a mess than to prevent one.
So what can a real estate agent do for you that you can’t do for yourself? Here are 5 things that only come with experience and detachment from the home.
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1. Agents make an unbiased evaluation of your home
Many homeowners look at their property through the rose-colored glasses of happy memories made in the home.
The deck, even though it’s falling apart, is where you hosted many a barbecue. You can hear the sound of the kids unwrapping Christmas gifts in the living room. The pencil marks measuring heights through the years tug at your heart strings.
All homeowners have an emotional relationship with their homes, and that connection makes figuring out what your home is worth that much harder.
Few buyers even bother to look at houses that are overpriced. And if buyers don’t see your home, they won’t make an offer.
Luckily, real estate agents evaluate your property without the vision-clouding emotional attachment that you have as a homeowner. Just ask Kim Erwin, one of HomeLight’s top 1% of agents who sell homes for top dollar and #5 in the Corpus Christi Association of Realtors:
“I’ve been selling real estate for over 36 years, and the trick is understanding the mortgage industry within your community and looking at the house through the eyes of the buyer.”
Without that emotional baggage, an expert real estate agent can:
- Recommend the best areas to invest money in improvements or upgrades
- Identify which of your home’s assets are its best selling points
- Spot potential red flags that’ll cost you during the home inspection
- Calculate a realistic list price
Top notch agents are able to make these financially savvy recommendations because they’re experienced at preparing a comparative market analysis for your specific property. This entails a whole lot more than just looking up what nearby homes sold for.
2. Agents prepare an in-depth comparative market analysis
It’s true that there are a number of sites that can provide you with a ballpark estimate of your property’s current value—including HomeLight’s own Home Value Estimator. Using an estimator is a great way to a rough idea of what your home is worth. However, online home valuation tools provide just that: Estimates.
Online estimators look at only a few factors—such as square footage, proximity to your neighborhood, and the final sale prices of nearby homes sold—to determine the valuation of your home.
But when you’re actually ready to sell, a rough idea isn’t good enough.
An agent knows how to compile and evaluate a more comprehensive set of statistics of comparable homes sold. Your agent will:
- Compare the list price vs. the final sale price for each comp
- Evaluate the impact of home improvements on each comp’s final sales price
- Account for any upgrades you’ve done to your home, proximity to restaurants, a big yard, and trending features
- Calculate how various listing price points impacted each comp’s number of days on the market
- Research insider data, including: list price reductions and how many showings each property had
- Assess local market trends based on recently sold, pending sales, and soon-to-be-listed properties that will be your competition
- Determine which marketing strategies work best in your neighborhood
The compilation and evaluation of all this in-depth data is how your real estate agent decides on the best list price recommendation for your property. Without it, you’ll either end up leaving money on the table, or your overpriced property won’t sell—no matter how well you market it.
3. Agents work their industry connections
Successful real estate agents know the importance of developing professional relationships. Top seller’s agents network to:
- Meet and keep clients
- Connect with buyer’s agents to find potential buyers for their clients
- Build a database of the best contractors, landscapers, painters, and other home improvement professionals to recommend to their clients
- Forge connections with title companies, appraisers, home inspectors, and financial institutions to get their clients the best deals
These relationships are the reason you not only want to hire an agent to help you sell your home—you need to hire that agent the moment you decide to sell.
Some homeowners mistakenly wait to enlist the help of an agent until after they’ve invested time and money in home improvements.
But if you don’t involve your agent in the prepping to sell process, you’ll wind up spending your time and money on the wrong improvements, and you’ll hire the wrong professionals to help you. Agents who’ve spent years selling homes in your area know which contractors, builders, painters, and landscapers will do the best work for the best prices.
Your agent uses connections with buyer’s agents to get the word out about your home even before it’s officially listed. Your agent may make calls, arrange a buyers agents-only open house, and even attend local real estate pitch sessions. All this behind-the scenes networking your agent does on your behalf is why you’re likely to get multiple offers within the first days and weeks on the market.
And those professional relationships they form with financial institutions—those contacts are how they’re able to pre-qualify potential buyers.
4. Agents vet buyers to save you time
There’s a reason why 63% of top agents don’t recommend open houses for the general public anymore. They tend to attract lookie-loos rather than serious buyers.
Serious buyers who’ve taken the financial steps to qualify for a home loan tend to prefer private showings so they can take their time evaluating your home’s potential. But there’s no point in arranging a private showing for a buyer who can’t afford to purchase your property.
That’s why many seller’s agents check up on the finances of potential buyers before accepting an offer or even arranging a showing of your home.
“I qualify every buyer before we even get started,” says Erwin. “Sellers don’t realize all the time that it takes to get the buyers qualified.”
The best agents will ask potential buyers or their agents:
- Is your buyer pre-qualified or pre-approved for a home loan?
- What amount and type of loan has your buyer qualified for?
- Is the offer contingent upon the sale of your buyer’s current home?
- How much of a down payment or earnest money can your buyer afford?
By asking these kinds of questions, your agent both pre-qualifies potential buyers and get a solid understanding of the buyer’s financial situation to prepare for negotiating the final deal.
5. Agents negotiate with insider knowledge on their side
FSBO home sellers often end up negotiating counteroffers and navigating bidding wars from a weaker position. Why? Because they’re pitting wits with a buyer’s agent who handles home sale negotiations every day.
As a result, FSBO sellers risk leaving money on the table by not driving a hard enough bargain, or even negotiating themselves right out of the sale by their unwillingness to compromise on the price.
On the other hand, when a savvy agent negotiates on your behalf you get to benefit from their years of bargaining experience. The best agents realize that there’s more to haggle over than the just the overall sales price. Agents can:
- Craft counteroffers that appeal to the buyer without promising too much
- Negotiate less obvious home sale expenses including: closing costs, seller-paid points, home warranties, and other fees
- Renegotiate after a low appraisal without losing the seller too much money
- Recommend seller-paid closing costs in situations when it will actually net you more money
Experienced agents also know how to play defense against buyer’s agent negotiation tactics that an FSBO seller won’t know to guard against. An agent won’t let the buyer:
- Chip away at the seller’s profit by requesting concessions a little at a time
- Renegotiate a significantly lower price based on minor home inspection findings
- Slip potentially expensive contingencies into the final sales contract
- Use the threat of walking away entirely to manipulate the seller into making concessions
Erwin knows how to handle these kinds of buyer negotiation tactics, “So, what if the buyer wants to walk prior to closing? There’s things you can do—more earnest money, don’t take it off the market. You create this sense of urgency.”
That’s why you need that top-notch agent to do all of the things you can’t or don’t know how to do. Through experience, agents learn the home improvement tips, selling strategies, and negotiating techniques that will sell your home faster and for the most amount of money.
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