Intrepid sellers may see the insane 2022 housing market where homes are going for beaucoup bucks and think: Why use a real estate agent? My house will practically sell itself.
Not a bad point… in theory! But does it hold water? We dug into whether there are any serious benefits to working with a real estate agent today and ended up finding some pretty compelling reasons to hire one.
Despite the recent real estate boom, selling a house requires a ton of work and challenges can arise no matter the market. Real estate agents provide a lot of the value they always have while offering new benefits, too.
For example, some big obstacles today include figuring out your next place to live and dealing with the results of a potentially low appraisal, which real estate agents are equipped to help you navigate. It’s also stressful to coordinate with buyers even if a quick sale does come together.
Today’s most advanced agents can also take their client experiences a step further by providing access to innovative products and digital tools that make the process easier. Let’s take a closer look at some of the top reasons to enlist the help of a real estate agent and what you’re likely to get out of it.
Ability to sell for more
At first, it might seem heartbreaking. Fork over 6% of your home’s sale proceeds to a total stranger? If this is what’s causing you to agonize over whether to hire a real estate agent, you’re not alone. The most common reason people decide not to hire a real estate agent is “did not want to pay a commission or fee,” representing 36% of FSBO (For Sale By Owner) sellers.
Indeed, most real estate agents get paid through commissions. Commissions are typically calculated as a percentage of a property’s sale price amounting to between 5%-6% in 2022.
But research shows that agents statistically help homes sell for quite a bit more, helping to offset or even exceed the amount paid in commission fees. And they do it while wrapping your entire listing and selling process in absolute professionalism.
2021 data from NAR shows that “FSBO homes sold at a median of $260,000 last year, signiﬁcantly lower than the median of agent-assisted homes at $318,000.” If your agent charges a 6% commission, but you sell for 22% less, you’re giving up 16% in value in that scenario.
An independent study from 2016 to 2017 bears this out: FSBO homes sold for an average of 5.5% less than agent-marketed sales.
Work with a top-rated agent, and the results are likely to be even better. Internal transaction data at HomeLight finds that the top 5% of real estate agents sell homes for as much as 10% more.
A real estate agent helps you fetch the highest sale price by putting together a beautiful listing, advising you on targeted upgrades, and negotiating the best price — and that’s just scratching the surface of their expertise.
This is a basic one… BUT the multiple listing service (MLS) is like the holy grail of home listings. It’s the primary place real estate agents representing buyers look to find their client’s next home. The MLS is also what feeds all of the other major real estate listing websites like Zillow, so you want your house to be on there.
Only licensed real estate agents, brokers, and some other industry professionals like appraisers ordinarily have access to the MLS platform, so if you were thinking of doing a FSBO transaction, you would have to pay some kind of flat fee to a broker to gain access to this tool.
When you’re working with a real estate agent, they will provide you with that access as part of their services.
There are approximately 600 MLSs across the U.S., and your agent will know where to upload your property details based on your home’s location.
They can also determine if your property should appear in any neighboring MLSs they may be a member of for higher visibility to out-of-town buyers. In short, it’s the biggest (and best) version of show-and-tell for your home.
All-star rolodex for emergencies
A great real estate agent will have a laundry list of skilled professionals at your disposal. Top Pasadena, Maryland real estate agent Bonnie Fleishman can’t even count the number of times her contacts have come through to help her sellers in a bind.
“I had a seller who had a termite issue, and we didn’t find out until two days before closing. [The seller] called some people, but they couldn’t come out or they wanted to charge an arm and a leg,” Fleishman recounts. “I called my guy and he came over on a Saturday afternoon … and he got the whole job done so we could close on time.”
“So we got the deal to close just because I had the contact of somebody who I give a lot of work to who, when I need a favor, is going to drop everything and help me out,” she adds.
She remembers another time when her lawyer contact handled a last-minute title issue at 11:30 p.m. on a Saturday night, when the seller’s lawyer couldn’t get to the bottom of the problem. She has stories exactly like this for countless types of professionals in her rolodex.
“Networking is key. If I didn’t have a good licensed handyman who was reasonable who could come at the drop of a dime, a lot of transactions wouldn’t happen.” Fleishman says.
Curious what your home is worth? You might start with a quick online price check from a tool like HomeLight’s Home Value Estimator.
This can give you a sense of price trends for your area and provide a preliminary estimate of value in under two minutes for free.
But it’s almost always essential to follow up any DIY pricing research with the opinion of a top local real estate agent. If you put your house on the market and it fails to get many showings or offers in the first week or two, you’ve probably overpriced it. And the longer a house sits on the market, the more likely it is to sell for less.
On the flip side, you could list at a price that’s far below market value and end up underselling the property by a significant margin.
There is a lot that goes into creating a fair, appropriate, and valuable home price objectively, not just what you feel like it’s worth. Sentimental value does not translate as dollar value.
Real estate agents are going to help adjust your price based on the facts. They’ll rely on data like its square footage, number of beds and baths, and what other similar homes have recently sold for in the area.
They will also help you account for recent upgrades, curb appeal, new developments like shopping districts and restaurants, and your home’s condition whether it’s impeccable or needs some work. Details that digital tools could easily miss will not evade your agent.
The home appraisal has always been a thorny step to selling your home. Appraisals are going to be required in any transaction where the buyer is using a mortgage to finance the deal.
Lenders use the result of the appraisal to determine the amount of funds they are willing to provide. If the house appraises under the contract value, the gap will need to be made up for some how.
Lately, issues caused by appraisals have become more frequent in the face of skyrocketing home prices. NAR statistics show that appraisal issues in February 2022 accounted for 22% of delayed contracts and 11% of terminated ones, compared to the respective 18% of delayed and 9% of terminated contracts caused by appraisal issues in a more typical year.
A real estate agent can help sellers anticipate and navigate the appraisal no matter what the outcome ends up being. For one, a real estate agent may advise the seller to negotiate for an appraisal waiver in the contract upfront. Then, if the house appraises low, the buyer has already agreed to provide the extra funds and the deal can move forward.
Professional negotiation skills
“A lot of homeowners who are trying to sell themselves — chances are, the vast majority have not sold a number of homes,” says Nick Hundley, a top real estate agent in Lafayette, Louisiana.
“If they have a desk job or any other kind of job that involves zero negotiations of any kind, and then they step into negotiations of a $340,000-$650,000 dollar house, we’re talking big numbers.”
With a professional real estate agent, sellers go into negotiations at a potential disadvantage. It can be very scary and intimidating to try and negotiate a house price yourself, especially if you have never negotiated with anyone before. Luckily, real estate agents have the skills and the responsibility to negotiate your home for you and get you the price you’ve been seeking.
One big point of negotiation in home sales as of late has been giving sellers more time to find their next residence using a rent-back arrangement. A rent-back arrangement typically allows a seller to stay in the home for a designated period of time after closing in exchange for making rental payments to the buyer. Though rent backs are usually for 30-60 days, that’s recently changed.
Since mid-2020, 42% of real estate agents have seen buyers allow sellers to stay in the home for six months to a year given the low inventory market. A savvy agent may be able to help you sell your current home while avoiding a double move with the right persuasive tactics.
A lighter load
After he spotted the For Sale by Owner sign across the street from his children’s school, top Los Angeles real estate agent Todd Jones knocked on the door to check in.
“She was so exhausted, she was so sick of the showings, she was frustrated because people would make appointments and then not show up, she didn’t like to hear them say bad things about the house because she had an emotional attachment,” Jones says. “By the time I got to her she was so over it, she was ready to list and have a professional take over.”
You won’t sell a home by merely listing it on websites and waiting for offers to come flooding in. They won’t. That’s where marketing comes in. “There’s a difference between marketing a home and selling a home,” Jones says. “The way you get top dollar is to market a home, and that’s what I do.”
Marketing is about getting exposure in the best places with the best angles. A real estate agent knows what listings buyers will be attracted to, gets the listing on the best websites, recognizes and highlights a home’s stand-out qualities, positions home showings in the best light, and networks regularly about the house. It’s a consuming process that will evolve according to reception at open houses and reactions from potential buyers.
Agents aren’t lawyers, and some states will require you to work with a licensed real estate attorney regardless of whether you’ve hired an agent. That said, real estate agents do a lot to coordinate a complex transaction and are trained to help the seller execute a “by the book” deal.
Agents are going to be highly familiar with documents like the purchase contract and seller’s disclosure forms, as well as the specific regulations that determine how real estate can be bought and sold in your state. These can be confusing pieces of paperwork to handle alone.
While having a real estate agent doesn’t mean that you’re free of legal liability as a seller, working with one can help reduce potential risk. For example, in the rare case that a buyer would sue you for anything down the line, having worked with an agent may help mitigate the chances of the lawsuit prevailing if proper procedures were followed.
You’ve made many memories in this house. It may be where you got your start. Raised a family. Grew old.
“Buying and selling a home are next to getting married and having a baby — all the reasoning goes out the window, sometimes, people get very emotional,” says Janice Overbeck, a top real estate agent in Marietta, Georgia.
She shares a story about why these emotions can come into conflict with the stressful business transaction of selling a home.
“I have clients where, he built the home, he proposed to her on the lot before they built it, and they got married across the street in the clubhouse … [After negotiation] they felt like, ‘we just don’t want to sell this home to these people because it’s so special to us’ and it’s not a business transaction anymore,” Overbeck says, adding that she had to step in as a therapist, as well as a real estate agent.
“What I attempt to do in circumstances like that is to focus on either the end result or why they decided to sell their home in the first place,” adds Hundley, the top Louisiana real estate agent.
It’s natural to have mixed feelings about selling a house. But working with a real estate agent helps to keep the home selling process in an objective perspective when you need it.
Innovative tools and guidance through your options
Real estate agents have been helping people buy and sell homes for over 100 years, but that doesn’t mean their businesses and offerings look exactly as they did a century ago.
As new solutions emerge in the world of proptech (property technology) and fintech (financial technology), savvy agents are taking advantage and using the latest developments to help deliver better outcomes for their clients.
For example, HomeLight, a real estate technology company, has begun to enable real estate agents to provide a modern closing experience in places where our Closing Services platform is available.
Agents on our platform may also introduce sellers to our Simple Sale platform if they are looking for a low-hassle, speedy sale.
Our Cash Offer product, which helps buyers win their dream home, and buy-before-you-sell Trade-In program are additional options a HomeLight agent may introduce you to, in a select (and growing) number of locations.
And that’s just the beginning of tools and products your agent may be able to provide to make your journey a little (or a LOT) easier and more successful.
In a world that is advancing rapidly in technological advancements, think of a real estate agent as your tour guide through a dizzying amount of options and opportunities.
That’s on top of an agent’s amazing ability to help you prepare a home for sale, analyze market trends, and negotiate when the going gets tough.
The next time you wonder: Why hire a real estate agent? — hopefully the answer is much more clear. If you ever have trouble finding a real estate agent in your area, HomeLight would be happy to connect you with a few highly qualified candidates near you.