Real estate agents help buyers find homes and help sellers find buyers for their homes (which sometimes means advertising and persuading people to buy so that a sale can be made, hence the perpetual "it's a good time to buy" statements). I couldn’t imagine moving and buying a home in a completely new area without their services, so in helping buyers find the right home for them they do provide a very valuable service. They will generally help with all the legwork and see that the transaction is completed without too much extra effort on the part of the buyer.
At the same time, there are other options as well. In the past I have purchased real estate in three ways: 1) with the help of a real estate agent, 2) owner to owner transaction or for sale by owner and 3) at public auction. Of the three, the public auction was by far the easiest for me. It’s sort of like Ebay on fast forward and when it’s over the highest bidder wins. Unfortunately since sellers rarely get top dollar through public auctions there are very few opportunities to acquire homes through this avenue. You also have to be well aware of the process because in most cases you need to make a substantial deposit at the time of your winning bid and then bring that up to as much as 10% of purchase price within 24 hours. So you have to have cash or at least access to some to even get in the door. Then you’ll generally have a short period of time to pay off the balance and close the transaction or risk losing your deposit. So as I said this is definitely not for everyone, but can be very good for those willing to educate themselves about the process and put in a little legwork in an area they are familiar with.
Most properties, however, will be listed by real estate agents because sellers either don’t want to do the work required to sell their property on their own, feel they are not equipped to deal with the process or believe that by paying the agent to advertise for them and attract more traffic they are more likely to get “top dollar” for their home. These are all legitimate reasons to use a real estate agent and are services they provide to the seller. Gaining access to the brokers' listing system or MLS certainly gives the seller a much wider audience for their property. Agents might also offer staging or other tips, much like you would get from "Designed to Sell" or "Curb Appeal" on HGTV. For their services the agents are paid a commission which is essentially a transaction fee much like a gratuity added to your check in a restaurant to pay the waiter to provide a service you choose not to do for yourself.
Sometimes finding a good real estate agent can be very difficult as there are many out there but few good ones in my experience. The best way to find a good one is to use personal recommendations from people you know and trust which in itself can be difficult if you are moving to a new and unknown area. Whatever you do though, be patient and don't let them rush you into a decision that is good for them but bad for you. If you can't find a good agent based on the personal recommendation of someone you know and trust, it is also a good idea to do a background check on any perspective agent. That means using publicly available resources (see below) to see if they have bankruptcies or criminal records or simply by reading their websites if they have them to see if they are providing sound advice, behaving ethically and capable of expressing their thoughts in complete sentences for example. It's a big transaction and you will be paying them a large sum so make sure you do your homework and find someone you can trust to put your interests before their own.
Resources for checking out your real estate agent or anyone else you might be consider hiring to provide a critical service to you for that matter:
Maryland Judiciary Case Search: http://casesearch.courts.state.md.us/inquiry/inquiry-index.jsp (see if they have a criminal record, liens, bankruptcies, etc.)
Maryland Land Record Archives: http://www.mdlandrec.net/msa/stagser/s1700/s1741/cfm/index.cfm (see how they financed their own property and if they have any conflict of interests in offering you advice, also see how the owners of the property you may be considering financed their property and get an idea of how much they will need to cover the remaining balance on their mortgage(s))
These are excellent resources and I know at least some agents are (or were) totally unaware that they exist for anyone to do their own due diligence. If you are willing and able to do a little bit of homework yourself you can make much more educated decisions.
Don't forget to check back to Dan's Deep Creek Blog for future updates.
Wednesday, June 18, 2008
Services Real Estate Agents Can Provide ..
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2 comments:
Nice article. I am Vancouver real estate agent and almost everybody in my family is realtor, so I can tell I am "deep inside" :) Unfortunately, I have the feeling that reputation of our business has declined a bit in recent years. People are more suspicious, especially now, during problems on US market, and trying to avoid using an agent (at least some of them..) But they have to realise our job emerged from their needs many years ago, we were not artificially created. And I think somebody, who has a good experience with agent would never sell/buy on his own...
Jay
Thanks for your comment, Jay. All of the way from Canada too, I guess I really am on the World Wide Web.
I agree 100% that a good agent can be of great service. Finding one, however, is sometimes a different story. In the market I have been specifically commenting on some of the dishonesty I'm seeing from agents' websites and promotional materials makes me question their integrity and whether they are providing services for their clients or themselves first. Hopefully now that they know I will call them out for questionable ethics things will improve at least from a public point of view.
In searching the "backgrounds" of realtors at some of the local firms, I found evidence of bankruptcies, domestic violence, DUI, failure to appear in court, public urination, etc. We all make mistakes, but these aren't exactly the actions of trustworthy public servants and raise some character issues along with the copyright violations and plagiarism I've seen on their websites.
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