Shopping with a REALTOR Saves You Money!

Over the weekend, I received a call from a buyer about a home I recently listed. This person found my listing on one of the well-known real estate shopping websites.

He asked about the home, which was already under contract, and my first question was, "Are you working with a licensed REALTOR?" He said that he wasn't and proceeded to explain that he thought it was a better idea to just contact the listing agent directly "to save everyone trouble". 

I am certain the gentleman had good intentions, and I explained to him that he will have a better experience and will likely save money when he purchases his home if he uses a REALTOR to help with the purchase of his home.

In December of 2019, the Journal of Economics published a well-researched article indicating that REALTORS do have an information advantage over the general public in real estate transactions. In fact REALTORS paid an average of 2.54% less than average market value for their own homes. On a $500,000 transaction, this amounts to a $12,700 savings! The research shows that these discounts primarily result from agent bargaining power and access to information about the market.

Buyers thinking about whether or not to use a REALTOR would also be wise to consider the fact that the Listing Agent already represents the Seller in the transaction. This would leave the Buyer without representation during the home buying process. Since purchasing a home is the largest transaction most consumers make, and most people only buy a home one or two times each decade, doesn't it make sense that you would want a Real Estate Profession looking out for your interests?

Some homeowners and buyers will agree to a dual agency situation, where the Sellers' agent acts as the sole representative in the transaction. In this case, the agent is not allowed to provide advice to either the Seller or the Buyer in the transaction. The REALTOR can only present the facts and allow the Seller and Buyer to make their own judgements. The confidential conversations REALTORS have with their clients based on research they perform often represent the saving thousands of dollars! Use a licensed REALTOR to provide you with valuable advice when you are ready to buy a home. 

Please contact me when you hear of an unrepresented Home Buyer who needs help negotiating their real estate transaction.