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What It’s Like To Be a Real Estate Agent During the Coronavirus Pandemic

April 24, 2020

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With entire states ordered to stay at home amid the coronavirus pandemic—and things like open houses and in-person showings considered major health risks—the business of buying and selling houses is not what it was just a short time ago.

The federal government considers real estate an essential business, but several states, whose mandates take precedence, have categorized it as nonessential. In either scenario, real estate agents have had to find new ways to do their jobs.

We reached out to agents around the country to find out how they’re doing their jobs differently in these unsettled times.

The real No. 1 challenge for agents

You may think the biggest challenge to selling a house during a pandemic would be getting the buyer in the house, but Amy Berglund, real estate associate with Re/Max Professionals in Denver, says that’s not the case.

“The biggest challenge has been projecting and encouraging a sense of calm for our clients,” she says. “Real estate deals are still happening, closings are happening, and multiple offers in some price points are still happening. We are closing deals—we just need the public to have confidence in that.”

Different attitudes toward showing—and staging—homes

In some locations, in-person showings are still happening, but that doesn’t mean business as usual.

Gina Guajardo, broker at Sterling & Johnston in Seattle, says she uses video walk-throughs to eliminate in-person showings for people who aren’t serious buyers.

“I’m doing this for buyers’ and sellers’ health,” she says. “I want showings only from interested buyers; this is not the time for lookers.”

Before the coronavirus, homeowners were encouraged to stage homes for showings and open houses so they felt lived-in. Recently, however, that policy has been turned upside down, says Katie Witry, a real estate agent and owner of Witry Collective in New Orleans.

“Homes that are vacant are easier to show, inspect, and eventually sell,” she explains. “However, homes that are occupied are being shown on a case-by-case basis.”

When in-person showings do happen, they require extensive precautions.

“I’m suiting up in a mask and disposable gloves to show property,” says Lara Cox, a Realtor® in Las Vegas. She’s also “using a disinfectant wipe to open doors, turn on light switches, and open blinds” while inside clients’ homes.

But Washington, DC, real estate agent Karen Szala notes that when clients wear masks, it’s difficult to get a good sense of their reaction to a property.

“So much of what we do as real estate agents is reading reactions and asking questions about those facial expressions when they first see a property in person,” she says.

The pros and cons of virtual tours

Traditionally, homeowners have had little to do with house tours—their only job has been to leave the premises so that real estate agents could take over.

Juan P. Rojas of JPR International Real Estate in Miami says that has all changed now that residents have been ordered to stay at home.

“We can coordinate to show a property virtually, by simply hosting a Zoom meeting where the owner is in essence the videographer and gives the buyer a live tour of the property,” he explains. “It’s been pretty exciting!”

Jo Ann Bauer, a Realtor® with the Ozer Group in Scottsdale, AZ, notes that while virtual tours are convenient for both buyer and seller, “the drawback is, people want to experience a home and how it feels, and that can be very challenging for buyers on a virtual tour.”

Some sellers are waiting it out

A house that’s been on the market too long has “gone stale” in real estate terms, which tends to have a negative impact on its appeal—and the seller’s negotiating power.

In a time when buyers are reluctant to shop for homes, more and more homes are at risk for this, but real estate agent Tomer Fridman of Compass in Los Angeles has found a way to combat that.

“We are holding off on launching new listings on the MLS and networking them off-market through our personal sphere and social media channels,” he explains. “No one wants the days on market to date a property unnecessarily, and agents looking for their buyers are aware to look at properties coming soon and on hold.”

In other areas, though, the problem is a lack of inventory.

Nancy Brook, broker and CEO of Billings Best Real Estate in Montana, says her area doesn’t have enough homes for sale in the median price range.

“With interest rates still low, buyers are ready to buy if they can find the right house,” she says. “Some sellers are either withdrawing their listing or waiting to list.”

Relationship maintenance mode

Real estate is a business based on relationships, and many real estate agents are just working on maintaining those relationships right now.

“I honestly haven’t been thinking about deals and haven’t been pushing clients to buy or sell. My main focus is reaching out to clients, friends, and family on a human level to check and see how they are doing and not discuss business,” says New York City broker Philip Scheinfeld.

Closing on homes without getting too close

Typical closings consist of buyers, sellers, and their agents meeting in a room with a title clerk. Understandably, that can’t happen right now, so agencies are getting creative.

“My title company partners have helped us by instituting drive-up closings where all parties remain in their car and title clerks in Tyvek suits go car to car, safely securing signatures and completing the home sale,” explains Dave Marcolla, principal of the Dave Marcolla Group at Keller Williams Real Estate in Newtown, PA.

A new outlook on ‘home’

The coronavirus pandemic is making huge changes to how business is done right now, but Ed Kaminsky, licensed real estate agent at Strand Hill in Manhattan Beach, CA, says its effect on what people are looking for in a home will be long-lasting.

“I do believe globally people will be looking at ‘home’ much differently for at least a generation or two,” he says. “A home now is not just a place to eat dinner and sleep, but it potentially is your office, your home gym, your children’s school, your play center, your place of rest, your place of worship. Home has taken on a whole different meaning, and choosing one that meets all of those needs is more important than ever before.”

The post What It’s Like To Be a Real Estate Agent During the Coronavirus Pandemic appeared first on Real Estate News & Insights | realtor.com®.

Buying a Foreclosure? 4 Reasons Why You Probably Still Need a Buyer’s Agent

December 31, 2019

Buying a Foreclosure? 5 Reasons Why You Probably Still Need a Buyer’s Agent

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In a home foreclosure sale, the seller is actually a bank or mortgage lender. In this scenario, the lender has seized a property from the previous owners who were unable to pay their mortgage. Now, the lender is trying to recoup its losses by selling the property. That makes this scenario different from typical real estate transactions in which the buyer and the seller negotiate through their respective real estate agents, with their lenders in the background.

So, if you’re buying a foreclosure property, do you even need a buyer’s agent to represent you during the process? Spoiler alert: Yes, you still need a buyer’s agent. Here’s why.

1. A buyer’s agent is familiar with the process

We’re going to assume you’re not in the practice of buying foreclosed homes—unless that’s your job—so it’s doubtful that you’re an expert in this area. That’s why having a real estate agent who’s well-versed in this type of transaction is beneficial.

“Negotiating with a bank is very different than negotiating with an individual, and a real estate agent who has worked with banks before understands the bank’s processes and can anticipate the bank’s needs to make the transaction go smoother,” says Chuck Vosburgh, a real estate agent at NextHome Gulf to Bay in Tampa, FL.

Even if you’ve purchased a foreclosure in the past, and you think you remember how that process unfolded, it’s still to your advantage to enlist the help of a buyer’s agent.

“Foreclosures are unique in that no two of them are ever the same. Each bank has their own procedures and timelines, and working with someone who can help navigate the nuances can alleviate a lot of stress for a home buyer,” says Nadia Anac, a real estate agent in Tampa, FL.

2. A buyer’s agent protects the buyer’s interest

Don’t ever forget that banks are in it to recover the money they lost from a foreclosure.

“When purchasing a foreclosure, banks often set the rules by insisting upon certain contracts and conditions, and often, the contracts are 20-plus pages long and designed to protect the bank, with no benefit to the buyer,” says Melissa Zavala, a broker at Broadpoint Properties in San Diego. “No matter the transaction, the best way that buyers can protect themselves is by having their own agent, who acts as a fiduciary in the buyer’s best interest.”

Buyers often get excited about purchasing a foreclosure because they’re expecting to get a great deal on a home. Zavala says that expectation can blind them to any problems.

“The buyer’s agent can help you to navigate the transaction and avoid any possible perils and pitfalls,” she says.

3. A buyer’s agent knows the inspection process

Will Friedner, a broker at the Montana Life Realty Team in Whitefish, MT, says he has listed and sold a large number of foreclosure properties.

“The bank has no idea what has happened in the house, or when and if anything was updated or repaired,” he says. However, a buyer’s agent has extensive experience identifying problem areas and working with home inspectors.

“Sometimes the bank will pay for problems that may show up during inspections like removal of mold,” he explains. However, the average buyer wouldn’t know this, and the average bank isn’t likely to just volunteer this information.

A buyer’s agent can identify problems and locate individuals who can provide a professional assessment of the foreclosed property.

4. A buyer’s agent knows the market

Purchasing a foreclosure can be an opportunity to save some money on a home, but just because it’s a good deal doesn’t mean it’s worth buying. That’s where the expertise of a buyer’s agent comes in.

“An agent can give you market knowledge that you may not be aware of, like location, condition, and comparable sales,” says Brett Ringelheim, a real estate salesperson at Compass in New York City.

This is particularly important when considering resale value or if the home is an investment property.

“Real estate agents will know if there’s a really popular floor plan that many buyers are looking for in the area, or the types of renovations other properties have that are currently on the market,” he says.

The post Buying a Foreclosure? 4 Reasons Why You Probably Still Need a Buyer’s Agent appeared first on Real Estate News & Insights | realtor.com®.

A Real Estate Agent Dishes the Brutal, No-Holds-Barred Truth About His First Commission

December 17, 2019

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Anyone who’s ever hired a real estate agent to help them buy or sell a house might wonder: How do agents get paid—and how much?

I had that same question when I decided to embark on a career as a real estate agent in San Francisco in 2017.

Being a real estate agent seemed like a glamorous and highly profitable job. I had visions of cashing huge checks as I brokered deals on gorgeous properties with clients who’d invite me onto their yacht to thank me for all my hard work.

The reality, I soon discovered, was way different from what I expected—and what many home buyers and sellers might envision, too.

The story of my first real estate commission

After graduating from college, I was soon introduced to an agent at a large real estate company who agreed to be my mentor. After shadowing this successful agent for a month, I set out to get my real estate license and started working there.

One of the first things I learned was that unlike many other professions, real estate agents generally aren’t hourly employees, but rather get paid on commission.

This is a lump sum, paid only when a home is sold. Important to note: It is not a set price, and it varies quite a bit per transaction. Most typically it hovers around 5% to 6% of the home price.

Given that your average home in San Francisco sells for around $1 million, a typical commission could amount to upwards of $50,000—which seems like a lot!

But I was soon in for a brutal reality check on how much work goes into that commission, and how it gets divvied up.

My first client

My first client was a tech industry worker from New Zealand. He’d been living in San Francisco for a few years and wanted to buy his first home.

Upon meeting this client at my office, it became obvious that he was extremely anxious and skittish. He knew nothing about home buying, and would constantly change his mind based on random news, his parents’ opinions, or his emotional state.

His anxiety levels were exacerbated by the fact that he was buying in a foreign country. Since his parents were involved in the deal, I had to deal with three stakeholders living on different continents.

Undaunted, I accompanied my client to numerous open houses during that initial weekend. For each property, I came equipped with meticulous documentation, which I’d memorized to perfection.

I had prepared to act like an objective market analyst; in reality, I spent most of my time serving as a chauffeur and a therapist.

We attended dozens of open houses and 19 private showings, and clocked hundreds of hours on calls discussing personal taxes, property taxes, closing costs, investment strategies—and his worsening anxiety.

As for me, without a base salary, it became difficult to survive in San Francisco. The rock bottom moment hit in the middle of a sweltering summer, when my car broke down as I was frantically trying to meet my client for a showing.

As an agent, losing your car is like losing a limb. I soldiered on and took a commuter train into the city. San Francisco’s hills look great on postcards, but not so much if you’re sprinting in a suit in 98-degree heat.

Miraculously, I made it to the property on time and began reviewing my prepared materials. I promptly received a text from the client, informing me that he couldn’t make the showing. That’s when I became acutely aware that all my work might amount to nothing.

Breaking down my commission

However, after six months of struggling, the client and I finally found a perfect place for his needs, and we closed the deal. For me, that finally meant it was payday! Here’s how the commission was broken down:

  • The deal was a co-op purchase for $690,000.
  • The full commission on this deal was negotiated to be 5% of the purchase price, a total of $34,500.
  • The listing agent took half, or $17,250, and the other half went to the buyer’s brokerage.
  • Since I had partnered with another buyer’s agent on this deal, I made 50% of the buyer’s side commission, which was worth $8,625.

 

While $8,625 might seem like a lot of money, I’d been dedicating about 20 hours per week to this sale for over six months, a total of 480 hours.

My return boiled down to less than $18 per hour.  And that was before I gave the IRS my cut of the income. Ultimately, I was working for near minimum wage.

Doesn’t seem so glamorous anymore, does it?

The ugly truth about real estate agent commissions

Many home buyers and sellers think that real estate agents have an easy and lucrative career, because they focus on that singular moment when agents receive the commission check.

What they don’t see is the grunt work that is required to make each deal close. They don’t experience the psychological toll of knowing that a deal could be canceled and that their months of work could amount to nothing.

But I stuck it out, and things did get better.

I learned how to work smart and automate as many processes as possible, because I knew that hard work alone wouldn’t result in victory.

By teaming up with the best agents in San Francisco and building my personal brand across social media channels, I was able to market over $20 million of real estate within my first year in the business, and marketed close to $100 million the next.

Ultimately, there is something magical about helping someone find their dream home. You’re not just moving someone into a house, you’re creating years of memories and experiences for this person and their loved ones. When a deal comes together, it’s immensely gratifying in ways that defy description.

Still, the next time you wonder “What am I paying this real estate agent a commission for, anyway?”, I hope you remember my story and give your agent the benefit of the doubt. You can assume that the answer to your question is: a whole lot.

The post A Real Estate Agent Dishes the Brutal, No-Holds-Barred Truth About His First Commission appeared first on Real Estate News & Insights | realtor.com®.

Haunted (Open) Houses: Real-Life Ghost Stories From Real Estate Pros

October 23, 2019

diane39/iStock; realtor.com

For anyone who’s ever experienced the hair-raising presence of the paranormal, you’ll know that spooky things can happen any time of year—and not just on Halloween. Just check out the recent ghost stories related to the “Watcher House” (which is exactly as creepy as it sounds), or this summer’s sale of “The Conjuring” house—there’s never a shortage of insanely scary stories if you know where to find them.

And fortunately for you, we do! In celebration of everyone’s favorite haunted holiday, we’re bringing you three crazy (and true) spooky stories from real estate agents across the country. Read at your own peril—preferably with the lights on.

The blue room with a tragic history

Have you ever walked into a room and just felt that something wasn’t right? That’s what happened to broker Brad Pauly when touring a house with his client in Austin, TX, several years back.

“As I entered a back bedroom with all navy walls, I got a chill and goosebumps,” he said. “I didn’t know why, but I had to get out of the house and catch my breath.”

After running outside to recover, Pauly did a little digging to find out what was going on in the house.

“When I asked the agent why the seller was selling, she told me that someone had committed suicide in the navy blue bedroom two weeks prior to our showing,” Pauly recalls.

A curse on the house

It’s one thing to have a ghost lurking around the house, but what do you do when a living person is casting curses? That’s exactly what Yawar Charlie, director of estates at the Aaron Kirman Group in Los Angeles, was forced to figure out.

“A couple of years ago I was given the opportunity to list a major house in Beverly Hills in a gated community,” he recalls. “It was a gigantic house, well over 15,000 [square] feet, and we were brought in to sell it because the couple who owned it were going through a bitter divorce.”

Although the husband was keen on selling, the wife, who was a practicing Wiccan, didn’t want to—a fact that quickly became apparent.

“She had put up roadblocks at almost every turn on our way up to the property, and one of them was a curse on the house,” Charlie explains.

After days of spooky happenings in the home—including unexplained and sudden power outages—Charlie decided to take matters into his own hands.

“I paid $5,000 to bring in one of my spiritual advisers to cleanse the home,” he recalls. “Once they were in the house, not knowing anything about the owners except that the wife was a practicing Wiccan, they told me they could feel the fights that the couple had had in various rooms of the house.”

The ‘restless bride’

While touring a potential fixer-upper in a trendy neighborhood in Knoxville, TN, Cassidy Melhorn and his agent ran into an unwelcome and creepy surprise.

“I met my Realtor® at a property that was built in the late 1940s and appeared to have great bones, only needing some updating,” explains Melhorn, who’s also the  founder of Volhomes.

After doing a walk-through of the home together, Melhorn noticed something weird about one wall of the hallway. Being an experienced engineer, he decided to take a closer look.

“I told my agent, ‘There’s a large dead space here,’” he recalls.

Melhorn assumed it was an old fireplace that could be restored, so he got to work carefully prying off the loose paneling that covered the hidden space.

“Behind the panel was a staircase to a second floor of the house that had been boarded completely shut,” he says. “I had so many questions. First of all, why would someone board up a second level and then cover the staircase completely? Secondly, how did I not realize the house had a second level?”

Melhorn ran outside to have a better look at the house. He asked his agent if she’d known the house had two floors. She hadn’t.

Once back inside, things started to get even creepier.

“As we rounded the corner through the kitchen on our way to the dining room, I noticed it,” he says. “Hanging in the middle of the large opening between the dining room and living room was a large silk wedding dress complete with veil, and slightly yellowed from years of aging. The hair on my neck stood straight up as I asked my agent, ‘Was that there when we came through?’”

Neither Melhorn nor his agent had seen the dress on their first walk-through.

“We immediately left,” he explains. Since the discovery of the enclosed second floor and the mysteriously appearing dress, Melhorn has kept tabs on the property.

“The house has been listed for rent many, many times,” he explains. “It’s currently vacant.”

The post Haunted (Open) Houses: Real-Life Ghost Stories From Real Estate Pros appeared first on Real Estate News & Insights | realtor.com®.

What Is an iBuyer? An Essential Guide to iBuying: The Pros, Cons, and Costs

October 8, 2019

Gajus/iStock; realtor.com

What is an iBuyer? In a nutshell, it’s a new way to buy and sell homes that’s catching on in the real estate world. If you’re a home seller who wants to sell your home fast and with minimal fuss, selling to an iBuyer is an option worth considering.

Traditionally, selling a house requires a number of steps—like making repairs, staging your home so that it looks its best, holding open houses, soliciting offers, negotiating with home buyers, and signing a purchase agreement—plus overcoming any roadblocks along the way. Even if you hire a real estate agent to help you navigate this process, selling a house can take time and work, and some maneuvering before you cross the finish line.

Selling real estate to an iBuyer, though, is typically a more streamlined transaction. Here’s how the process usually works: You go to an iBuyer’s website, plug in your home’s address, and fill out a questionnaire about your home.

Within about 24 hours, you will receive a cash offer on your home. (The “i” in “iBuyer” stands for “instant,” which is why they’re also called “instant offers.”) From there, you can decide whether or not to move forward with the deal. Depending on your preference, the transaction can close in a matter of days.

The big downside of iBuying is that all this convenience comes at a price. Selling to an iBuyer often means you make less money on your sale than through the traditional route—working with a real estate agent who preps your home for sale and negotiates the best offer.

Wondering whether selling your home to an iBuyer is right for you? Here, we’ve outlined the pros and cons of iBuyers and instant offers, to help you as a homeowner to make the right decision.

How iBuying began

Opendoor, which was launched in 2013, was the first major iBuyer to market. Since then, a number of others have entered the business. This includes new online companies like Offerpad and Knock, as well as some traditional real estate firms and brokerages, like Keller Williams and Coldwell Banker.

iBuying is not offered everywhere, and statistics on the total number of iBuyer transactions are not readily available. Nonetheless, the industry leader Opendoor claims to have purchased over 10,000 homes in 2018, and has expanded to 20 cities across the United States. According to a recent study by Collateral Analytics, a real estate analytics firm, iBuying has been growing in market share, at over 25% per year.

Want to see whether there’s an iBuyer in your area? This map from ATTOM Data Solutions is a good starting point.

How iBuying works

How iBuying works

anyaberkut/iStock; realtor.com

Simply put, iBuyers are companies that have the financial means to buy homes in cash. To formulate an offer, iBuyers typically rely on similar properties in your local real estate market, or “comps,” much as a real estate agent would in order to formulate a listing price on a home (or an offer).

After a home is purchased by an iBuyer, in most cases these companies will do some renovation work to optimize the resale price, then list the property on the multiple listing service (MLS). Some iBuyers hire third-party real estate agents to sell their homes, while others employ their own on-staff listing agents. Generally, these listings indicate in their description that the seller is an iBuyer.

Instant offer options

iBuying and other forms of instant offer programs work in a variety of ways that resolve several distinct pain points that home sellers can encounter. Here are three leading approaches, and the sellers they’re best suited for:

Type 1: Traditional iBuying

Best for: Home sellers who need to sell their home fast

Let’s say you’ve been hired for a job in a new city and need to sell your home within a week. A traditional iBuyer can get the job done. With a traditional iBuyer (like Opendoor), you get a cash offer on your home within a day or two, and you can use that influx of cash either to rent or to buy a new place elsewhere.

Type 2: Trade in

Best for: Home sellers who want to buy and sell at the same time

Home sellers who want to sell their current home and buy a new one often struggle to time these two events simultaneously. That’s where the trade-in approach of certain iBuyers (like Knock) can help. In a nutshell, they’ll make an all-cash offer on a new home you want. If the offer is accepted, you move into your new home, and the iBuyer works on selling your old house. Once it sells, it settles any costs incurred prepping your old home for sale, and then transfers your new house to your name.

Type 3: Bridge financing

Best for: Home sellers who want to buy and sell at the same time but maximize profits

This type of iBuyer (like Homeward) is similar to a trade-in, in that the iBuyer fronts you the money to purchase a new house. The difference is that if your offer is accepted and you move in, you then lease the house from the iBuyer and list your old home using a traditional real estate agent. If your old home doesn’t sell within a certain period (typically six months), the iBuyer will buy it off you at a pre-agreed price, giving you the capital you need to end your lease and get a traditional mortgage for your new home.

Advantages of selling to an iBuyer

Selling to an iBuyer

PashaIgnatov/iStock; realtor.com

iBuyers and instant offers can present many advantages to home sellers:

Speed

According to recent realtor.com data, the median home spends 58 days on the market from the time it’s listed until the owner hands over the keys. Selling to an iBuyer is a much faster process that can happen in a handful of days.

Sam Khater, chief economist at the government-backed mortgage company Freddie Mac, says iBuying is somewhat analogous to selling a vehicle to CarMax.

“It’s a way to dispose of your asset very quickly,” he explains. “Prior to CarMax, you had to shop around to sell your car. Now, in a similar way, iBuying allows you to quickly sell your home without going through the grueling process of trying to find a buyer.”

Convenience

The traditional path of selling your home involves a range of inconveniences, like keeping your home mess-free, and leaving it—often at the last minute—during home showings and open houses. iBuyers eliminate these hassles. Obtaining an offer from an iBuyer can take as little as a few taps on your computer or smartphone.

According to Brian Bair, founder and CEO at the iBuying firm Offerpad, selling a home to an iBuyer is an enticing option for consumers who have “become accustomed to on-demand, tech-enabled services that allow them to buy and even sell what they want quickly and easily.”

Flexibility and control

Although iBuying transactions tend to happen fast, that doesn’t mean they have to, if you prefer to stick around in your house for a while.

“When sellers use iBuying, they choose their own convenient closing date, a date which they can change as needed,” Bair says. “They can even choose to stay in the home for a few more days after closing if necessary.”

As such, selling to an iBuyer can also be a great option for people who want to avoid the awful juggling act of buying and selling a house at the same time. Sometimes, this means that they need to move out and rent a place before they’ve bought their next home. On the other hand, home sellers who purchase their next home before selling their current one have to juggle two mortgages, which can put a serious strain on their finances.

By selling to an iBuyer, you can avoid stretching yourself too thin financially, and time your move at a time that makes sense for you.

Certainty

Selling your house to a regular home buyer involves assuming some risks and uncertainty; the deal could fall through for a number of reasons. For instance, the buyers might back out if they are rejected for a mortgage, or if their home appraisal comes in low and they can’t pay the difference.

But the risk of a deal falling through with an iBuyer is rare—in fact, it almost never happens.

“You’re getting a guarantee that the deal will close,” says Rob Barber, CEO at ATTOM Data Solutions, a nationwide property database. Having that kind of assurance is invaluable for many home sellers.

The caveat? Most iBuyers will send a home inspector to your house to verify its condition before purchasing it. Once the home has been inspected, the iBuyer may lower the offer price or—if the house is in really sorry shape—rescind the offer altogether. So make sure to be upfront during your iBuyer application process about the condition of your house.

Disadvantages of selling to an iBuyer

Although iBuyers have many advantages that appeal to home sellers, they have their downsides, too. Here are a few of them:

Lower profit

Like any business, iBuyers need to make a profit. As a result, people who sell their home to an iBuyer often end up paying for that convenience, netting less money.

“With iBuying, you’re typically selling your home at a discount,” Barber says.

Khater agrees: “Any time you’re trying to sell [your home] quickly, you’re probably not getting top dollar.”

The reason for this is that iBuyers charge a fee for taking a house off your hands, and prepping it for sale. That fee averages around 6% to 8%, but could be lower or higher based on how long they estimate it will take to sell your home.

In fact, one small MarketWatch study of 26 home sales to iBuyers found that these home sellers make, on average, around 11% less than owners who sell to a traditional buyer.

So, let’s assume your home has a market value of $400,000. Based on MarketWatch’s research, the instant offer you’d receive from an iBuyer could potentially be about $356,000, which is a sizable $44,000 less.

Granted, home sellers who sell their home by hiring a real estate agent will also pay a fee for that service, too, in the form of a commission. There is no set amount for commissions and they vary widely, but they typically amount to around 5% to 6% of a home’s final sales price, which the listing agent splits with the buyer’s agent and broker. However, a recent study from Collateral Analytics found that on average, home sellers will pay between 13% and 15% more in fees to an iBuyer than they would to a traditional listing agent.

Plus, great real estate agents will work hard to earn their keep and get your home sold at top dollar. They can help you price your house, create a comprehensive marketing plan, stage your home, hold open houses, communicate with prospective buyers, negotiate offers, and put out any fires that might erupt along the way. To some home sellers, all that help is worth every penny.

“There is value to working with [an expert] when you’re making one of the biggest transactions in your life,” Khater says.

If you’re looking for a real estate agent, you can find candidates in your area at realtor.com/realestateagents.

Limited availability

Right now, iBuying is still in its infancy. Many iBuyers operate only in select cities; furthermore, some firms will purchase only homes that meet certain qualifications (e.g., properties in decent condition) or homes within a certain price range.

Nonetheless, the iBuyer space is quickly expanding its reach.

“What we see happening is iBuying will expand to more markets over time,” says Barber. “Consumers will become more educated as to what iBuying entails, and local real estate professionals will increasingly try to get in front of iBuying and walk a seller through the process.”

Nonetheless, even once the iBuying industry has matured, Barber says he does not see iBuying ever accounting for more than 15% of all real estate transactions, since it will only appeal to certain types of sellers.

Khater says that iBuying works best for homeowners who are selling an ordinary home “in an area with a lot of homogeneity.” Translation: iBuying doesn’t typically account for unique home qualities that add significant value to a home, such a historic home with 19th-century hardwood floors that have been impeccably maintained. Similarly, iBuying offers can’t put a price tag on intangibles, like a house’s beautiful mountain view, when assessing a home’s value.

Is selling your home to an iBuyer right for you?

Ultimately, whether or not you should sell to an iBuyer boils down to this: “With iBuying, you’re typically selling your home at a discount, but what you’re getting in return is speed and certainty,” says Barber.

If those benefits are more important to you than getting the highest sum of money for your home, iBuying is a viable option. If profit is your chief priority, though, a traditional home sale is probably your best bet.

The post What Is an iBuyer? An Essential Guide to iBuying: The Pros, Cons, and Costs appeared first on Real Estate News & Insights | realtor.com®.

Should You Use the Same Real Estate Agent to Buy and Sell a Home?

May 10, 2019

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When you’re in the middle of selling a home and buying a new one, the question inevitably comes up: Can’t I just use the same agent for both transactions—wouldn’t that make things easier? After gathering expert insight from the pros, we came up with the definitive guide on when using the same agent makes sense, and when it doesn’t.

When should I use the same real estate agent to buy and sell a home?

The answer isn’t cut and dried, we’re afraid: It will all depend on your circumstances. Using one agent for both buying and selling might seem like the easiest solution, but that’s true only if your agent is up to the task on both ends of the sale. This means your agent is comfortable with representing you as both a seller and a buyer, and also that she’s familiar with both neighborhoods.

Licensed real estate agent Alyssa Martin of Nest Seekers International in New York City explains that this is one benefit of working with a bigger company.

“If someone is moving from Chelsea to Jersey City, I’m able to collaborate with someone in Jersey City,” she says.

For bigger moves (e.g., from New York to Florida), agents like Martin can even act as a liaison, helping their seller clients locate a buyer’s agent in the new location.

When should I get two different agents?

Staci Donegan of Seabolt Real Estate, in Savannah, GA, explains that some moves are simply too big for one agent to handle—especially if the agent is focused on one neighborhood and the client is moving out of it.

“In this situation,” she says, “I would help my client find another agent, even interview them. It just can’t be me—because that would be a disservice to the client.”

Pros of working with the same agent

You’ll often hear people offer rave reviews about working with one agent instead of two, and that’s because there are a few potential benefits worth mentioning.

To start, your real estate agent knows you best.

“You have the synergy of working together,” Donegan says. “During the selling process, I know exactly what they love about their house, what they hate about their house—it’s just the perfect transition from the selling side to the buying side. I know what they’re looking for and what’s important to them.”

Another benefit of working with the same agent is the potential to save money when you sell.

“I would cut commission significantly, and I would go out of pocket on marketing costs,” Martin says.

How to determine if your real estate agent can do both transactions

When deciding on which agent (or agents) to work with for your move, it’s important to ask the right questions.

It bears repeating: Make sure your agent is an expert in both neighborhoods involved. And don’t forget to ask whether your real estate professional tends to act more as a listing agent or a buyer’s agent.

“The questions become really important,” Martin says, “like, ‘What areas have you sold in and had buyers in?’ Make sure they have experience on both sides of the process.”

Martin also emphasizes the importance of your real estate agent’s network.

“Relationships with mortgage brokers and closing attorneys are important,” she says. “If you don’t have that, it’s hard to get your client the best deal.”

Another question you’ll want to ask is whether or not the agent has experience working with clients like you. For example, if you’re buying an investment property or you’re in the military and require a VA loan, your agent might have difficulty pulling this off if she hasn’t done it before.

“When working with an agent, make sure they have the skills they need for that transaction,” Donegan says.

If you really like your listing agent and the new home is outside of the agent’s market, you might consider asking her for help finding a buyer’s agent. Since she knows what matters to you better than anyone, she’ll be a great resource in connecting you with the right person.

The final word

Ultimately, there seems to be a consensus that working with the same real estate agent is a good idea—but only when it makes sense for your transaction.

“Things can be easier with less people at the closing table,” Martin says. But the experts also agree on this final point as well: Having two qualified agents is much, much better than having one underqualified one.

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