Why do you require a real estate broker?
Are you thinking of selling your house? Or are you willing to buy a new one? In both situations you'll need to plan your financial decision in such a way that you can minimize your costs while maximizing the profits.
A real estate broker can help you to find suitable house if you want to buy one. Also they can find potential buyers for you if you are trying to sell your property. A good professional broker can ease up your stress while buying or selling properties. For this reason, a real estate agent or broker is preferable by 70% and 80% of homeowners these days. Real estate agents will work hard to make your deal the best ever. Since buying and selling is a big financial turnover, the broker or agent will get his share of commission only after the job was done. They will earn after finishing the process of buying and selling or completing the settlement.
There are two type of agents working in a property deal. One is a sales agent and the second one is a buyer agent. The standard rate of commission of a property deal is considered 6% according to the current market. This amount will be divided between the two brokers, but only between 60 to 90 percent of the total commission. The rest of the amount goes to listing brokerage.
So, you'll need to hire a professional agent who has a goodwill in the real estate market. If the broker has a good track record, you can pay him his full commission as a premium. But you may not be so lucky while searching a reliable agent. So, in that case do not pay him the commission in advance.
So, having a good profit while property dealing, whether you are buying or selling it, majorly depends on a good, reliable real estate agent. Please find below the tips you should follow while choosing one.
Choosing a buyer agent :
Follow these steps -
- Search and find an agent with best reputation. You can rely on him that he can get you the best deal and pay him the premium. Getting the best deal will save you thousands.
- Negotiate with him regarding commissions. But you can overlook this rule if you are dealing with a reputed, professional agent who can guarantee you for higher profits.
- Always quote a lower price to the agent from the price you can actually afford for buying the property. The agent might take the advantage and can make the deal difficult for you. He will try to increase the home value as it will earn him bigger amount of commission. You can use the opposite strategy while selling the home.
- Do not apply for a pre-approval if the agent asks you for it. It might be a strategy to assume your capability to pay money towards the property. It is nothing but a plea to calculate his maximum amount of commission.
- Don't entertain the inspector list which your agent provide you directly. The listed inspectors and your agent (buyer agent) may have mutual understandings which might not be profitable for you. The inspector, chosen by the agent may overlook the actual damages and may provide you a fake picture of the property. The only thing they might be concerned about is their commission.
Choosing a seller agent
You might have no need for a real estate agent while selling your home or another property. Higher sale price will get you higher profits. You can pay $200 for hiring an external, third -party appraiser for verifying your pricing, to ensure whether it is perfect or not.
Now the question is, how much can you save and how? Let’s assume that the selling price of your home is $300,000. As per the standard rate of commision you will be paying the agent 6%, that is $18,000. But if you hire an external appraiser, he would charge $200. In addition you may have to pay $500 to advertise your home. At the end you’ll be saving $17,300 which is a big amout indeed.
Selling your home without the help of a real estate agent is quite difficult. It’s a challenging task for the individuals who are new in this field. Buying and selling process requires different tactical strategies, immense knowledge and enough experience about the real estate market. The process itself is one of the biggest financial transactions most people will commence in their life. It is upto you, whether you can hire an agent or work alone to save your wallet.