123: Why You Should Always Use a Real Estate Agent

I have been a real estate agent and real estate investor for over 15 years. I am biased when I talk about using real estate agents, but I am also extremely experienced when it comes to real estate. Being in the industry as long as I have, I see how valuable a good real estate agent is for both buyers and sellers. Real estate agents can be expensive, but they are usually well worth it because of the money they save their clients. On this episode of the InvestFourMore Real Estate Podcast, I talk about why buyers and sellers should use real estate agents. I also discuss how to find the best real estate agents and use them effectively to get deals or to help you sell your house.

Who should use a real estate agent?

Lately, I have been answering a lot of questions about real estate agents on Quora. Many people want to avoid using a real estate agent in order to save the commission they would pay to sell a  house. Some people even want to avoid using an agent as a buyer, which makes little sense because buyers typically do not pay for a real estate agent. Selling a house is a very complicated process, and every house is different, which makes them hard to value. When you value a house wrong, it can cost the seller 10% or more of the purchase price, which eliminates any savings from not using a real estate agent…and then some.

In the United States real estate market, most sellers pay for the real estate agents on both sides. The buyer does not have to pay their agent anything, so there is no reason not to use an agent as a buyer. If the buyer does not use an agent, it may be advantageous in some for-sale-by-owner situations, but it is very rare. In my opinion, everyone should be using real estate agents to help them buy or sell houses. You have to make sure you use a good agent and not just anyone with a license.

How should buyers use real estate agents?

There are many real estate agents, and not all of them are good. In fact, it could be argued that most of them are not very good. There are many part-time agents and many agents who have no idea what they are doing. The problem with many real estate agents is they are not taught how to sell houses in real estate school. Good real estate agents need training and a mentor to teach them how to sell houses and help their clients. Unfortunately, many agents choose to forego training for a higher commission split. Most buyers work with the first agent they find or know. They do no due diligence to determine if their agent is any good. Here are some tips for finding a good agent:

• Try to avoid working with part-time agents. Most part-time agents are not available when a buyer needs them, and they have a much greater chance of messing something up because they are not giving the job their full attention.
• Do not work with friends and family just because they are friends and family. Work with real estate agents because they are experienced, know what they are doing, and have time for you. If you have friends or family who are good agents, use them, but don’t use them just because they are friends or family.

I have many more tips on the podcast for finding and using good real estate agents. Try not to use more than one real estate agent at a time. This will actually hurt you more than it helps.

Why should sellers use real estate agents to sell their house?

Many sellers question using a real estate agent because it costs them a lot of money. Real estate agents are expensive, but they are also worth it. The most important thing a real estate agent does is value houses correctly. If you under price a house, it will most likely sell for less than it is worth, even if you get multiple offers. If you price a house too high, it will sit on the market and usually sell for less than it is worth as well. I go into much more detail in this article.

Other things real estate agents do include:

• Marketing the house on the MLS.
• Staging the house.
• Taking pictures.
• Making sure the house shows well.
• Negotiating for the buyer or seller.
• Handling inspection issues.
• Handling appraisal issues.
• Setting up closings and helping with title.
• Showing the house.
• Writing contracts, counters, and amend/extends.

All of these issues can cost the seller money if they do not know how to handle them right. Many real estate agents do not even handle all of these right, like being proactive with appraisals. When someone tries to sell a house themselves, they often end up dealing with a real estate agent for the buyer anyway. They still have to pay half a commission, and the buyer has someone negotiating for them, while the seller does not.