Internet Real Estate sites and the amount of information available about the current market conditions has empowered a new generation of tech savvy buyers to go it alone and sellers to list FSBO (for sale by owner). Why do consumers need to pay someone when they can do it themselves? What could possibly go wrong? I do my own brakes on my car and save a fortune. But there was that one time my jeep’s tire started on fire while I was driving. I also put all new ceramic floors in my first house and they looked great until a rather large person walked on them. The sounds of those cracks still haunt me to this day! Not having a licensed Real Estate professional buy or sell your house could work out for you and save you a ton of money in the process. But why would you chance it when buying or selling a home is one of the single largest transactions you will ever make in your lifetime?
Let’s take Roger (completely fictional), who found a house he really liked and put in an offer. It was instantly accepted. Roger’s bank required him to get the house appraised to secure the loan. The appraiser found a few problems and assessed the value well below the contract price. Roger did not read his purchase and sale contract very closely and now noticed that the contract was not marked contingent on appraisal value or loan. Roger now has two options, beg the Seller’s to lower the price to the appraised value or possibly order another appraisal using a different source for his loan. He also has a timetable to fight. If he does not secure funds by the agreed upon day he could lose his binder deposit. Sorry Roger.
Now there is Susie. Susie found a house she really liked and used her VA loan to put an offer on the house. During the mandatory inspection the inspector found major damage to the house. The Seller’s are not willing to negotiate the price but say they will fix the damage with the current full price offer in place. The appraiser also notes the roof is 15 years old. Now the appraised value is lower and the bank will not finance a full price offer AND the damages will not be fixed unless the offer remains at full price. Susie is not in a good position, she just arrived in the area and is staying in a hotel thinking her house would close in a week or two. Now her choice is start over which means 30 days more in the hotel or fork over the differnce between appraisal and offer. Congratulations Susie you just paid the Seller to fix their own house.
Steve decided to sell his house by owner. The buyer’s agent submitted a full price offer after one week on the market. Steve is ecstatic. He is so excited he puts an offer in on another house based on this good news. He is so sure he puts a $10K binder deposit on the new house because he calculated he will make $50K on his current sale especially because of all the money he saved not using a Realtor. He goes to closing and papers start flying in front of him. He notices the numbers are not adding up. At the end of the process he is handed a check for $10K. What Steve didn’t notice in the contract was he paid all of the closing costs for the Buyer’s to include a $7K concession. He also paid a 4% commission to the Buyer’s agent. The closing agent and Buyer’s Realtor showed him right where he agreed with his initials and everything. No options left, Steve is out of a house and does not have enough money to buy the one he is under contract for. Sorry Steve!
According to the Northeast Florida Association of Realtors a buyer can count on a Realtor to do things such as determine the right amount of house you can afford, find houses not advertised to the public, provide objective and well informed evaluation of properties considered, help negotiate price, and most importantly guide you through to a successful closing free from surprises.
On the Seller’s side a Realtor can help you price your house correctly, advertise it to other Realtors, coordinate showings with pre-approved Buyers, and ensure any offer that comes in is fair and inline with your expectations.
As you can see there are numerous traps and pitfalls a Realtor can help you avoid. Don’t let your tires start on fire, the floor crack beneath you, or be like Roger, Susie or Steve and see your Real Estate deal go horribly wrong. Find a good Realtor through references and reputation. Do not get caught out of your element, use a Realtor to sell or buy your next house!