“Why should I use the services of an estate agent when I can sell my property directly to prospective buyers or buy my home directly from the owners?’’ many frequently ask. It is true that property owners can place an advert in the papers or put up a ‘For Sale’ sign to attract prospective purchasers.
Property buyers can also daily browse through the classified adverts or drive around building sites looking for their dream home – but is this really effective? Selling or buying your home is probably one of the most important steps you will take in your life. It is worth examining all your options and ensuring that you do not make the wrong decision, which you could regret.
Property owners and buyers in most developed European countries, in the US and Canada would not even think of selling or buying their home without going to a reputable real estate agent. These people have realised how much more advantageous it is to deal with professional people who will ensure a fair and safe deal for all concerned.
You have to make sure that you do not overprice or underprice your property
A study conducted recently by the National Association of Realtors in the US came out with the following facts:
- More than eight in 10 home purchasers are through a real estate professional;
- More than eight out of every 10 sellers surveyed used the help of a real estate professional to sell their home;
- The longer the selling time, the greater the difference between asking and selling price;
- When sellers list their homes with a real estate agent, the house is typically on the market for eight weeks;
- Nearly seven out of every 10 home sellers would use real estate agent/salesperson the next time they sell their home;
- 50 per cent of all assisted sellers placed the most importance on knowledge and competence when selecting a real estate agent.
I must emphasise that I am referring to reputable real estate companies that have been in the business for a good number of years. The business of an estate agent is basically built on trust. Trust between agent and owner and between agent and prospective purchaser.
Benefits to the property owners
Some property owners think that selling a property means simply advertising it and taking prospective buyers round the house. There is much more to it than that. These are some of the questions which would come to mind when you decide to put your property up for sale.
- What is the best way to attract buyers?
- How do I know how much to ask?
- Is my home ready for sale? Should I invest in any major improvements?
- How quickly can I sell?
- How should I go about showing the house?
- How do I know if the buyers are serious, or even if they can afford my house?
- How can I be sure I am getting the best deal?
- How do I negotiate on the sale?
The agent as valuer and consultant
The risks incurred when placing your property on the market are various. You have to make sure that you do not overprice or underprice your property.
Exposing your property at the wrong market price would greatly delay the sale of the property. An experienced agent who would know the prevailing market conditions at the time when you wish to place your property on the market will be able to guide you and give you a realistic market valuation of your property. He will be able to advise you as to how to make the property more saleable and attractive to potential buyers.
The agent will also be able to advise you of the procedures and steps to take to ensure a smooth transfer, from the sale of your property to the purchase of another property. An experienced professional will be able to deal with all the various aspects in concluding a satisfactory sale of your property because he has the knowledge, training and experience.
Most property owners unfortunately are not familiar with how professional real estate companies operate and this is one reason why sometimes they do not appreciate the time and cost involved in this business.
Promotion and marketing
One of the most important advantages to property owners when they register the property with an estate agent is the tremendous exposure which their property will obtain, directed towards prospective purchasers who are on the agent’s database. There is a vast database of clients who are constantly updated with the properties which meet their requirements that are being registered daily. Furthermore, the property will be featured in every list of properties which are daily sent out to prospective purchasers.
Another advantage to property owners relates to the marketing of the property. There is no way a property owner can market his property more effectively than through a real estate company. Thousands of euros every month are channelled towards promotions both locally and overseas. Some companies actually have their own marketing personnel who constantly monitor market movements on a daily basis.
Benefits to prospective buyers
Looking for a house could be a nightmare. What comes to mind when you decide to look for a property? This is an extremely important decision and you cannot afford to make mistakes.
You want to make sure that you are given a good choice of properties. You want to make sure that you can afford that property. You want to make sure that you are paying the right market price for the property and that there is nothing relating to the property which could adversely affect its future value. You want to make sure that the advice and guidance you are given are genuine and will lead you to a fair and smooth conclusion of your home purchase.
A professional service
One of the qualities of a professional real estate agent is the ability to identify clients’ needs. These qualities are the fruit of intensive training, market knowledge and experience in dealing with all types of buyers. The advice and guidance given to prospective buyers, particularly first-time buyers, is sufficient reason to seek the services of these professionals when purchasing your future home.
Choice of properties
One of the preliminary tasks of an estate agent is to ensure a constant supply of saleable properties, thus offering a vast choice to prospective purchasers. A professional agent does not stop after showing one property to a buyer, who may have come through an advert enquiry.
Estate agents’ fees are paid by the vendor and not by the purchaser
He will follow up that client with further visits to other similar properties. If the agent does not have the right property readily available, he will go out looking for that property and if this also proves unsuccessful, he will wait for the right property to come in and immediately take his client to view it.
Sometimes, it can take months to find the right property. We come across clients who have been taken to view 50 or 60 properties before they managed to find the right one.
The agent as negotiator
A process which forms an important part of any property transaction is that of negotiating a successful sale which is satisfactory to both seller and buyer. This is a delicate stage and it is the one during which most sales could fall through to the disappointment of both seller and buyer. That is why it should be handled by a professional property negotiator.
In negotiations, the third party, i.e. the agent, plays a very important role, as he can see both parties’ points of view and can thus better evaluate the whole process. Sometimes, direct negotiations between buyers and sellers tend to involve conflict of personalities. In direct negotiations, objections by either party may not come out for fear of hurting one of the party’s feelings. A professional negotiator will be able to assess objections and possibly overcome them, leading to a successful conclusion.
The estate agent’s commission
Estate agents’ fees are paid by the vendor and not by the purchaser. Obviously, some vendors tend to take this cost into consideration when establishing their asking price. It is absolutely not true that reputable estate agents put up property prices. It is not in the interest of the agent to advertise and have on his registers unsaleable, overpriced property to sell. He will only get paid his commission if he sells the property.
For some reason, most people dislike paying fees for any services provided. They are prepared to pay thousands to buy a product but when it comes to services they expect to get them for free. Estate agency fees are no exception.
I find this hard to understand, when one considers what is at stake if one takes the wrong decision by not seeking professional advice. However, I must point out that most of the services, assistance, marketing and guidance are provided for free, as an estate agent is only paid if he successfully sells the property.
An estate agent’s daily activities include taking out a substantial number of clients to view properties and registering hundreds of properties that are processed and marketed throughout a network of offices. These efforts do not always result in a successful sale. However, these activities still have to be paid for and, particularly in the case of a sizeable real estate company, they amount to thousands of euros every month.
These costs can only be covered by successfully concluded sales.
The main objection as to why people prefer not to use the services of an estate agent is because of the brokerage fee. This is because they are not aware of the benefits which both vendor and purchaser will enjoy by using the services of a professional agent.
By far the majority of buyers and sellers who have opted to use the services of a professional real estate agent have not regretted doing so. In fact, most of these people have used these services more than once and have even recommended these same services to friends and relatives. I still meet clients today who still remember using our company’s services when they bought their property 20 years ago. This is simply because the real estate agent was a very important person, if not the determining factor, in the decision made at the time.
While there is no sure way to attract the right buyer for your home or to find the home of your dreams, real estate agents know the best ways to represent you because selling houses is their full-time job.
*Douglas Salt is a director of Frank Salt Real Estate,Malta.