Why use a REALTOR®?
If you’re thinking of making a move this year, you may also be wondering, “why use a REALTOR® when you’re buying or selling my home?”.
Let’s first look at the buyer side of things.
It’s common knowledge that most (but not all) homes for sale will be posted on the internet so you can search properties for sale on your home. When it actually comes time to buy however, working with a REALTOR® can make a huge difference. A buyer’s agent will not only take the time to help you find the right home, they will also protect your interests throughout the process and will negotiate on your behalf.
In addition to these key qualities, why use a REALTOR® and real estate brokerage can include some other important points. Let’s take a look at the top ten for buyers.
PRICE NEGOTIATIONS
It’s undoubtedly a seller’s market, but that doesn’t absolutely mean that you will be list price or over list price. Very recently, I had the pleasure of working with a buyer client who was looking for a 2-3 bedroom condo close to Yonge and St. Clair. I helped them find a condo in their target area, that met their needs, and we were able to negotiate it for more than $20,000 below list price. I’d say that’s pretty amazing in today’s market.
Another way to look at the purchase process is that a REALTOR® will help you make the most of your budget. They have experience in the industry so they can let you know if a home is priced well, too high or too low. As you likely know, a common strategy right now is to list very low with the goal of attracting lots of buyers and selling far over list price. Have you ever seen so many homes listed for $999,000? The reality is that most of these homes will sell for $1,300,000-$1,500,000 so it can be very misleading for buyers and in some cases, can let emotions get the best of them and they can end up paying significantly more than their budget.
REALTOR®’s here in Ontario are bound by a Code of Ethics so we are not only going to protect your interests, but we also want to make sure that the home you buy is a great investment so you can reap the financial benefits of home ownership. Your REALTOR® should know what features are worth and how they can impact your pocketbook in the years to come.
TIME SAVING
After you’ve had your preliminary discussion, your REALTOR® will set you up with a prospect search based on your needs/wants, desired location and of course, your budget range. This way you’ll get searches automatically with new listings so you don’t have to waste your own time scouring through realtor.ca or IDX feeds on various websites.
Another tactic some REALTOR®’s will use is prospecting a specific area to see if any homeowners are in the market to sell. This may actually bring you the opportunity to buy an off-market listings. In addition, they can send out communication to their brokerage or network to see if any seller’s properties match up with what you’re looking for. All of these efforts save you tremendous time while bringing you closer to finding your dream home.
MULTIPLE LISTING SERVICE
Most commonly known as “MLS”, the Multiple Listing Service is bar none the most effective marketing and communication tool required to buy and sell homes these days. If you’re not a licensed REALTOR® however, you won’t have access to it. Why use a REALTOR®? That has to be one of the number one reasons right there.
This doesn’t mean you can’t access other tools online but they rarely contain the full scope of available listings and are probably not nearly as well known as MLS. In addition to posting listings with homes for sales, REALTOR®’s can also use this system to alert other REALTOR®’s about things such as open houses, new listings and other things that can put you in the right place at the right time. If you’re on the hunt for a new home, this is an extremely valuable resource.
PROFESSIONAL NETWORKING
In spite of how many thousands of REALTOR®’s there are, not only here in Ontario, but also across Canada, the professional network of your own REALTOR® can make a huge difference when they are marketing the sale of your home or helping you to find a new one.
The real estate network is truly unlike any other that you may be familiar with. Due to the nature of the industry, being a living/breathing organism that changes day to day (or sometimes hour by hour), REALTOR®’s lean on each other often and are consistently interacting with each other. This can be helpful to share information/resources as well as showcasing properties. That is often how some homes are sold before they even hit the market.
For me, my brokerage sends out “Kalles Classified” emails regularly. This may include requests for assistance with Open Houses on a busy weekend, introductions to service providers such as contractors, electricians, inspectors etc., as well as buyer requests (e.g. buyer looking for vacant land in a specific area area). Just this past week, I introduced a REALTOR® I’m connected with in London to one of the REALTOR®’s at my brokerage so they could lend assistance in their local market of expertise.
Why use a REALTOR® if you’re not going to tap into such an amazing and broad network of trained, experienced professionals?
WORK ETHIC AND EXPERTISE IN THE INDUSTRY
REALTOR®’s are true entrepreneurs at their core and to be successful, they need to have an extremely solid work ethic as well as a sound level of expertise. As a REALTOR®, there is A LOT to know – from government legislation, legal contracts and new developments to literally anything and everything about condos, houses and more.
REALTOR®’s are required to hold themselves to a high standard in the same way a doctor, dentist or lawyer would. You may not know this, but REALTOR®’s are professional fiduciaries and are guided by principals, responsibilities and rules of conduct that prioritize service to their clients while preserving both the dignity of and the respect for the real estate profession. This is very similar to the way doctors take the Hippocratic Oath.
A REALTOR®’s expertise must be demonstrated in so many different ways. They need to find homes for their clients that often have to meet very specific wants/needs, pricing and also valuation. They need to have a strong understanding of the Building Code, how to write binding contractors, remain calm during negotiations and manage the logistics required to take a client from buying or selling through to closing smoothly and seamlessly.
In addition, they may need to put out some fires along the way. What your sellers’ buyer requires an extension to their closing date – or they walk away? Or, what if a seller changes their mind after a deal is finalized and they no longer want or need to move? There are all kinds of variable circumstances and situations that will require your REALTOR® to lean on their expertise, along with the support of their brokerage, to resolve.
Buying and selling a home is more often than not one of the most significant (not to mention expensive) milestones in someone’s life. It is critical that you work with a REALTOR® who can be by your side. Why use a REALTOR®? Properly represented, you can expect to sell for more, buy for less and avoid what could otherwise be very costly mistakes if handled incorrectly.
LOCAL GURU
If point number 5 hasn’t sold you on why you should use a REALTOR®, then I don’t know what will! If you’re still asking yourself this questions, let’s continue.
One of the best aspects of working with a REALTOR® is that they understand the market they are working within. As their client, this helps provide you with market knowledge, background info on the neighbourhood and insights about the industry that you may not know otherwise. They need to “keep their ear to the ground” and stay on top of industry trends so they can guide you in the most strategic way possible. For example, how to best time the sale of your home, how to price it properly and how to set it up/stage it so you can attract the highest volume of traffic once it’s listed.
If you’re thinking about relocating to an area that you’re not familiar with, this level of insight will become even more important. You may want to have a better understanding of what your daily commute will look like, how schools in the area are rated or if there are lots of parks/trails nearby. Each buyer has their own unique set of needs/wants – and while a REALTOR® can’t expect to know EVERYTHING, if they don’t know, they should be able to find out for you.
MARKET ANALYSIS
Just like the price of gas tends to fluctuate constantly, so does the real estate market. Since the beginning of the pandemic, the market here in Ontario has been on fire. There have been less and less homes on the market, so competition for buyers has been fierce – and just when we thought it couldn’t get any more competitive, it did! This past January saw significant volumes of bids on homes which translated into record breaking sale prices ranging from $200,000-$500,000+ over list price. Then, the Bank of Canada announced a slight mortgage rate increase. Although this was only a quarter per cent, it was enough to slightly slow down the numbers of showings and the numbers of offers sellers were receiving on offer night.
The real estate market moves fast! Sometimes changes can be minor but other times they can be significant. Global events like the pandemic and the shift to working from home fueled a large number of people moving out of the city core and into suburban or even rural locations since they didn’t have to commute anymore. In addition, some people who wanted to sell their homes may have decided against it because they simply didn’t want people coming and going throughout during a pandemic. Needless to say, this combination of factors made quite the impact on the market!
While these circumstances were largely publicized in the media, sometimes smaller shifts and nuances are not covered. When you’re working with a REALTOR®, they will keep you up to date by monitoring shifts and changes they are seeing and how they may impact you when you’re buying or selling a home
TRANSACTION MANAGEMENT
There are a number of complex processes that take place throughout the course of a real estate transaction. From the original contract you sign to have a REALTOR® represent you through to submitting offers or receiving offers on your behalf and staying on top of conditions, closing etc., there is a lot of complexity and steps to these legal undertakings.
As a buyer, especially a first time home buyer, you may not understand all of the steps involved. A REALTOR® will help guide you through this process so you know what to expect, and what is expected of you. For example, when you go through a home inspection, your REALTOR® will be able to help you understand things that come to light and if they should be taken lightly or seriously. They will also support you while you work with mortgage brokers and lawyers that become involved in the transaction. Your REALTOR® will help you resolve any issues, should there be any, that arise. They will advise you to avoid making any mistakes of your own while reducing your stress during the process.
MOTIVATION
As I’m sure you can appreciate, your success is your REALTOR®’s success. You need a home, and it’s their duty to help you find one! If they don’t, they also don’t get a pay cheque since their career is 100% commission based. REALTOR®’s do not receive salaries from their brokerage; they are independent contractors so their compensation is directly linked to the work they put in. If this isn’t motivation, then I don’t know what is!
Having been a business owner for 18 years before shifting into real estate, I can honestly say that this is motivation in its truest form. If you don’t have work coming in, then you don’t have money coming in!
In addition to helping you find your dream home, if you’re happy with the service your REALTOR® has provided to you, a secondary objective would be to obtain future referrals to you. When your friends or family are on the market to buy or sell a home, we want you to think of us and the hard work we’ve done for you. Buying and selling a home is an incredibly personal process – so there is no higher compliment that receiving a referral from a past client.
NO COST TO YOU
When you’re buying a home, you actually don’t have to pay your REALTOR®. Their commission is paid by the seller. Unless the seller is trying FSBO (For Sale By Owner) or if they have offered anything lower than the standard 2.5% commission, then there should be no cost to you.
Your REALTOR® will explain the implications of these situations before you sign a buyer representation agreement however, so you will be aware of the consequences should they arise. For example, if you’ve agreed your REALTOR® will receive 2.5% commission for representing you, and a seller is only offering 2%, then you could be on the hook to cover this remaining 0.5%. This does not happen often, but you should be aware of the cost impact, if/when it does. In most cases however, when you hire a REALTOR® to represent you, there Is no financial investment on your end other than your down payment and closing costs. The seller pays the fees to the cooperating brokerage, at closing.
So, why use a REALTOR®? They will work hard for you from the moment you sign a representation agreement to the moment you get the keys to your new home!
Now that I’ve covered off the top ten reasons to use a REALTOR® from the buyer’s perspective, let’s take a look at why a seller should use a REALTOR®!
While there are plenty of resources these days that could help you sell your own home, a REALTOR® can still bring A LOT of value.
MAKE MORE MONEY
When you’re selling your home, it’s important to shift your perspective. What’s most important is not how much money you’ll save by not using a REALTOR®, but how much additional money you stand to gain by using one.
Back in July of 2017, a study was conducted by Collateral Analysis that indicates that sellers who opted for FSBO don’t actually save any money. In fact, they could end up costing themselves more, by not listing their home with a licensed REALTOR®. The study went on to show that homes sold in this manner were sold for 5.5-6% less than those that were sold by a REALTOR®.
Why you may ask? Let’s move along to point #2.
EXPOSURE
When you’re trying to sell your home, it’s important to get as much exposure as possible. As noted above, only licensed REALTOR®’s have access to market and list homes on MLS. As such, if you’re trying to sell your home on your own, this isn’t a tool you’ll have access to which means far fewer buyers will ever even know that your home is up for sale.
This is a crucial point to make since MLS is truly the first place that most REALTOR®’s will start looking for homes to show their buyers. There are currently 82,000 licensed REALTOR®’s in Ontario – so that is a lot of REALTOR®’s on the prowl for homes for their client’s to purchase.
In addition, MLS has an automated marketing system which allows REALTOR®’s to set up prospect searches for their buyers. This will send them new homes that meet their criteria as soon as they go on the market and in turn, more often than not, this is how buyers determine which homes they’d like to see or not. MLS is automatically syndicated so from MLS, listings are displays on 3rd party sites like Zillow and Trulia. In essence, this gives you the best of both worlds when it comes to marketing and exposure.
EXPERT SUPPORT
Not only do REALTOR®’s have specialized training in their field of study, before they begin working, they also gain tremendous experience once their boots are “on the ground”. They will be able to share market knowledge with you, research historical information and stats as well as conduct an analysis of how you should list your home based on others for sale and those that have recently sold. A house is really only worth what someone else is willing to pay for it, so understanding the lay of the land and pricing a house properly is a very important part of the process.
Why use a REALTOR®? If not for these traits, then also for their instincts. An experienced REALTOR® can often predict what may happen during a negotiation and pre-emptively develop strategies to help overcome obstacles that may arise in advance. Experience matters – especially when you’re negotiating the sale of a big, if not the biggest, investment in your life.
PERSPECTIVE
So, you may love your family photos around the house, but guess what, buyers will not. It’s best practice to depersonalize a home before you try to sell it. And, depending on your personal style, you may also need to get it staged.
The thing is, if you’re not experienced in this field, you may not know, what you don’t know. If you’re working with a REALTOR®, they will have a better idea about what will appeal to buyers most.
They will also take inventory of your house, from room to room, to let you know if anything should be fixed up. Are there any scuffs on the wall? Is anything damaged or broken? Should you update or replace anything before listing?
A REALTOR® will give you a fresh perspective to help you prepare to put your best foot forward as you get ready to list your house.
TAKING THE EMOTION OUT OF IT
The reality is – people want to pay the least amount of money for a home, but sellers want to make the most. Our homes are not only filled with our stuff, they are also full of our memories. As a result, some sellers may have an extremely skewed perception of what their home is worth.
By pulling data on comparable homes in the area, those for sale and those that have recently sold, they will give you more of an accurate reflection of what your home should be priced at. In essence, they are taking emotion out the process and letting the numbers do the work.
SECURITY
When you’re selling your home, a lot of people will need to come through to see it. REALTOR®’s take many steps to ensure the safety of your home (and themselves) when dealing with buyers. When a home is listed on MLS, REALTOR®’s representing buyers will request showings using apps like Broker Bay or Showing Time. This way, the listing REALTOR® will know that they have professional representation. If a buyer is not represented, more than likely, the listing REALTOR® will either refer them to another REALTOR® or will show the property themselves.
While this isn’t always the case, it’s also good practice to make sure a buyer has been pre-qualified for a mortgage. This shows that they are serious about purchasing a home. A lender will have researched them, have their SIN number, job history and plenty of other info. If a home owner wants to sell their house themselves, they won’t have access to any of this information.
NEGOTIATIONS
When people think about negotiations, often times they think this means getting the highest price -or haggling a lower price. But, that’s really not all there is to it.
An experienced REALTOR® also has to feel out buyers and conduct due diligence. In the age of multiple offers, there can also be risks attached. If a home doesn’t appraise for the price a buyer has offered to pay for it, they may be required to cover the difference in cash.
Let me explain.
A home is listed for $799,000. The seller is hoping it will go for $100,000 over list – but due to the competition in the market, one buyer offers a whopping $200,000 over the listing price. This is also $100,000 more than the home will likely appraise for. Even if these buyers are approved for a bigger mortgage, if the home doesn’t appraise for that same value, they will need to make up the shortfall.
Not everyone has access to an extra $100,000 laying around, so it’s important to not only find out if they do or could, but obtain proof from their REALTOR® that they can make this happen. If they can’t, then the deal could likely fall apart and you could be faced with listing your home a second time around. If you’re depending on this sale to support the purchase of a new home, this can also impact you that way. Often times, banks can support you with a bridge loan, but it may mean you’re faced with paying two mortgages at once, for at least a little while.
THEY’VE “GOT YOUR BACK”
No, seriously. As your REALTOR®, they have fiduciary obligations to look out for your best interests. In essence, they are protecting you throughout the process by guiding you, supporting you and mitigating risk.
LESSEN THE HEADACHES
Life is busy; you’re busy. Why would you want to open yourself up to stress and headaches when you don’t have to? REALTOR®’s have access to tools that allow them to automatically approve showings, can ensure the safety/security of your home by verifying who is coming and going etc.,
Think about it.
If you decide to try to sell your home yourself, you’ll be getting calls and emails constantly, not only from REALTOR®’s, but also nosy neighbours and unrepresented buyers. Even after you sell your home, should you be able to do so on your own, you’ll need to deal with disclosures, inspections, contracts and even in some cases, re-negotiations. Once your property has been sold, you’ll also need to deal with the title company and lawyers.
Why use a REALTOR®? Because they will take care of most, if not all of this, for you. It’s worth every penny!
YOU’VE GOT NOTHING TO LOSE!
As noted above, REALTOR®’s work on 100% commission so if your home doesn’t sell, then they don’t get paid. Simple as that.
Why use a REALTOR®? I think the writing is on the wall! Whether you’re a buyer or a seller, working with an experienced REALTOR® will help you get the best possible result. Ideally, you want to work with someone who gives you candid advice, will explain trends happening in the market place and will provide you with a strategic marketing plan to get you massive exposure to help sell your home quickly and for a great price.
It’s good practice to ask family and friends for referrals, but you should still do your own research too, when deciding to work with a REALTOR®. Check online reviews, ask for references, and trust your instincts!
Buying and selling a home can be some of the most important decisions you’ll ever make – and you’ll be spending a lot of time with your REALTOR® so choose wisely!
If you’re looking to make a move, I’d love to help you! I can be reached at 647.896.6584, by email at info@serenaholmesrealtor.com or by filling out my simple contact form. For other great tips, make sure we’re connected on social and you’ve subscribed to my YouTube Channel.
In the meantime, feel free to check out new listings or find out what your home is worth.
