This One Mistake Could Cost You ‘Tens of Thousands of Dollars’ When Buying or Selling a Home
SOURCE: Realtor
A homeowner's journey is an expensive one. Full stop.
From scraping together the down payment and closing costs when buying a home to keeping up with maintenance and taxes while enjoying your home to moving costs and renovations when you’re ready to sell, every stage requires money.
Thankfully, time and again, it has been proven that owning a home is a solid investment, earning you money even when it feels like you’re spending too much.
Still, both buyers and sellers will always look for ways to save a bit of cash when it comes to the biggest purchase of their lives. While there are some ways to cut corners, experts like Dave Ramsey and his team warn that skimping on one expense could actually cost you “tens of thousands of dollars" in the long run.
Hiring a real estate agent can actually save you money
“Whether you’re buying or selling a house, you’re dealing with a lot of cash,” according to a blog post on Ramsey's site. “But here’s the thing—just one mistake during the home-buying or home-selling process can cost you tens of thousands of dollars.”
That mistake is trying to go at it alone, without hiring a real estate agent. Many people think that cutting out the “middleman,” so to speak, will save them money by avoiding the commission.
In reality, the expense of an agent can often be much less than the financial risks of not having one.
Let’s first consider a buyer.
“When you hire a buyer’s agent, you’re getting someone on your side who looks at hundreds of homes every year and helps tons of families navigate the home-buying process,” the blog reads. “A buyer’s agent brings experience, market knowledge and negotiation skills to the table that can save you time, money and a ton of stress.”
For instance, a real estate agent can stop you from overpaying on a home. They’ll know the comparable selling prices of the area, the recent demand, as well as how these prices compare to surrounding areas. You may be able to get your dream home for a lot less, but only if you know what’s worth negotiating.
Furthermore, their extensive knowledge ensures you won't overlook crucial details hidden in the documents or settle for a poor agreement.
As a seller, setting an accurate, competitive listing price can mean the difference between a quick, lucrative sale and a drawn-out, painful process that ends with a seller being lowballed.
And the data proves the point: The median selling price for all homes was $435,000 last year, significantly higher than the typical FSBO (For Sale By Owner) sale price of $380,000. That's a difference of $55,000.
Now, even after factoring in an estimated $13,000 to $26,000 for agent commissions (depending on your agent's rate and if you cover the buyer's agent fee), you would still stand to gain at least $29,000 more by using an agent than by selling your house on your own.
"Your agent is your advocate. They should give you advice and insights, they are the experts, and they should help strategize the best course of action because you are not a professional in the real estate field," Michelle Mumoli, real estate broker with The Mumoli Collective at Compass, explained to Realtor.com®.
"This is the biggest financial decision of your life. Just like you don't go to the back of a van to get a tooth pulled, don't go looking for discounts on professionals; you'll get discount service that'll cost you a lot more in the long run."
If you won't listen to Ramsey, listen to other homeowners
The vast majority of homebuyers continue to rely heavily on the expertise and guidance of real estate professionals. Last year, the National Association of Realtors® found that a significant 88% of all homebuyers used a real estate agent or broker during their transaction. The reliance on agents is even more pronounced for current homeowners, with 92% of buyers of previously owned homes choosing to work with an agent or broker.
And perhaps most important of all, a remarkable 91% of buyers stated they would use their agent again for a future real estate transaction or would recommend them to others.
"A good agent tackles these tasks day in and day out," Ramsey's team explains.
"Their experience helps you avoid rookie mistakes. Sure, you can try to handle all these things by yourself. But when you’re sitting in the hot seat of a real estate transaction, you’ll realize pretty fast that agents are worth their weight in gold."
SOURCE: Realtor
