The simple answer is this: Our government since 1964 has seen the need for regulation and education for the acquisition of real estate. The consumer needs to be protected and educated when they are purchasing or selling a property and the only way to receive that protection is by hiring a real estate agent. A person selling a home needs to understand that something you do only a few times in your life, doesn’t make you an expert.
I don’t know that the general public understands that real estate agents are governed by boards who are governed by associations and all of those associations are governed by CREA and CREA has a say in ALL real estate matters at a Federal level. I say all of that to reinforce the concept that the law makers in our country identify the need to regulate matters pertaining to the buying and selling of real estate therefore it is important that the general public realizes that when they buy or sell privately that consumer protection is not there.
In easy to understand terms of why you use a real estate agent, I like to use the analogy of an iceberg. When you look at an iceberg above the surface of the water it is beautiful and pristine just like when you look at a nice house on the surface, however, the majority of the iceberg is under the water and it is that part of the iceberg that will cause us trouble and as real estate agents it is our job to uncover the bottom part of the iceberg. The parts that are going to give you trouble. That would include for example whether or not the price you are paying is reasonable for the current market, condition and location of the property. How to negotiate. What to do once the deal is made. How to bind the seller into the sale. What are the things you should look for in terms of the structural integrity of a home, just to name a few.
With respect to the idea of valuation or whether or not the asking price of a home is reasonable, it is important to note that when you hire a real estate agent to sell your property, that agent has access to the MLS system and the MLS system gives us access to comparable properties which is one element but we as agents have also been inside many of these properties and we all know that being inside a property is much different than just knowing the brief overview of the property or driving by it and this serves us in two ways:
When we are pricing a property for the market we can give a seller an educated idea about what their home is worth. When properties are advertised for sale privately the owner is putting the price on their home themselves and we all know that we think our own stuff is worth more. Therefore keep in mind when you see advertising out there about how much you can save when you buy privately, a buyer might actually be paying a higher price when buying privately because the owner has chosen the price without any professional educated advice. Typically a seller decides on a price based on what they need which can be much different than what the property is worth.
From a buyers perspective an agent can give them the comparable sale prices so a buyer knows what to offer. This is negotiation.
The craft of negotiation. Real estate agents probably were the worst children to raise because of our craft of negotiation. We are master negotiators. I have been involved in many transactions where I knew if the buyer and seller were left to negotiate themselves it would have been dead in the water. It is our job to keep a deal alive until the bitter end and often people get very emotional in this process and it frustrates the negotiating process. Our job is to be non emotional and see it for what it is. A professional business transaction. As professional real estate agents we can bring a buyer and a seller together where otherwise on their own it would have fallen apart.
Also the job of a real estate agent is much more than the sale process. For example if you have a family moving into the area they want to know about the neighbourhoods because their children are an important part of the decision. Therefore, they need to know about the schools and the bus routes and also if many other children live on the street.
In addition, when a home inspection is completed, a buyer will need estimates on repairs and renovations. We can recommend qualified contractors.
As professional real estate agents, when getting ready to list your property, we provide information to our clients about what renovations or improvements offer the best value and also how to stage a house when a buyer comes throught.
We also take responsibility for and ensure the flow of documents and information from the client to the bank and the lawyer and the list goes on.
You wouldn’t consider buying a house without a lawyer or buying a business without the advice of an accountant and buying a home without a real estate agent is no different.