Meet Jane and John. Jane and John are planning to purchase a new home. It is the first time they are buying a home. They hired a real estate agent to help them with the purchase in previous times, and they were happy with the outcome.
John says, " I believe we have what it takes to go without an agent. We can save a lot of money. We tell the listing agent that we do not have an agent. And since the seller does not have to pay the extra commission, he should lower the house price accordingly. John also adds that he believes he is a good negotiator since he bargained to get a great deal for his brand new car.
Jane pointed out, after all, we know how the process works - and "every house is online anyway." there is Realter.ca and similar online search tools to find homes.
First, we find the house that is right for us. Second, we organize a showing with the listing agent. Third, we ask all the questions from the listing agent. However, Jane admits home valuation is complex, and pricing a home may require more experience. In addition, Jane agrees that trusting the listing agent to provide Jane and John with a fair home value is not realistic.
Jane suggested that their options are to use online home valuation, come up with their valuation, finally request a home valuation from an independent real estate agent.
You have heard the saying, "if something can go wrong, it will." It is about the risk and how much risk you are willing to take.
What do professional real estate investors do?
Typically there are two types of clients, professional real estate investors and average people buying and selling homes. Experienced investors understand risk, and they want nothing to do with it. Professional takes all the necessary steps to minimize the risk.
Professional always hire a real estate agent to buy or sell their property. The question is, why? Why do experienced investors hire real estate agents to purchase a property?
You may stop now and think about it.
I have already given you the answer: to minimize the risk. In other words, to increase the chance of success and make a lot of money.
How complex is the local nature of real estate?
Let's look at John and Jane's decision to find the right home for them using online tools. Online tools are perfect for initial home searches. Keep in mind, as they say, "real estate is local." In an extreme case, similar houses on the same street can differ by up to 10-20% just because of their location. There are many details to consider that only a LOCAL - I emphasize local - real estate agent can fully grasp the difference.
Here are some questions for you? How would you expect an online home valuation software account for such details ? The answer is simple, NOT possible. Perhaps one day, the software will evolve to that point but not now.
Why would the listing agent share such details with John and Jane? Why would the listing agent provide the fair value of the home with John and Jane?
The listing agents' duties are to the sellers
The listing agent has a contract with the seller to take his side, yes, his side. The listing agent's ultimate goal is to draw attention to the best aspects of the house and minimize the issues to get the most money for the seller.
At the end of the day, John and Jane must rely on their knowledge and experience to figure out the house's true value. A risk that expert investors will avoid at any cost. Not having a professional to guide and represent them, John and Jane are taking an unnecessary risk. There is no guarantee they will save money, but there is a chance they pay more for a house.
The Agreement of Purchase and Sale and many conditional clauses are usually drafted to protect buyers and sellers. The experience agents must make sure buyers' interests are addressed in the agreement. However, John and Jane may have to rely on the listing agent or an independent lawyer to protect them - a scenario that may not play in their favour.
Purchasing a house is a process with details and crucial steps, and there is so much at stake. Therefore, agents play an essential role, from inspection, showing, and closing to ensure a satisfying process.
Why should you avoid emotions and learn to compromise?
An essential aspect of buying and selling a home that is overlooked is the extend of emotions sellers and buyers experience. You would be surprised to know the number of failed transactions because of high emotions. When a transaction fails because of a lack of experience and feelings, both sides - sellers and buyers - are the losers. An impulsive and emotional decision may cost a lot of money for John and Jane. They may miss out on purchasing a home they love for a fair price.
Experienced and professional real estate agents are good at keeping their emotions under check. Real estate agents have learned over the years how to work with listing agents, negotiate, and compromise when required. For any deal to happen, the right amount of compromise is a must.
Understanding the local nature of the real estate and the delicate negotiation process are not taught in school. As a result, it takes many years for your local experienced real estate agents to do what they do best. Your experienced buyer's agent is there to minimize your risk during the most important transaction. They will help you find the best home for you, negotiate a fair price, and make sure the process of home buying becomes a cherished memory. So do what expert real estate investors do, hire the best agents and let them work hard for you and increase the chance of success.
Jane and John understood the wisdom of "Working With Professionals" and decided to hire a local real estate agent to minimize risk and maximize their success.
The above Real Estate article was provided by David Khosravi, a leader in his field in Willowdale, North York, Toronto. Reach out to David via email: firstname.lastname@example.org or by phone: 416.990.2424