Do I Need A Real Estate Agent?
In this age of internet searches, you may ask whether you should bother working with a real estate agent to buy or sell property. I urge clients to consider the facts before deciding.
Who are the agents? In Massachusetts, real estate agents, sometimes called realtors, must complete a licensing program, or must work for an office that is a licensed real estate broker. The listing agent is hired by the seller of residential real estate to determine the optimal price for the property and to market the property to potential buyers.
The buyer’s agent is hired by the buyer to locate and show him or her potentially suitable houses and to help determine whether they are priced appropriately.
The listing agent’s role. In order to attract buyers, the agent will often list the property on the Multiple Listing Service (MLS), an extensive database of most properties for sale in the state. Only licensed agents may list properties on MLS. Buyers can then view these listings both through their agents or through free websites such as Realtor.com.
The MLS listing is only a part of the listing agent’s service. The agent also uses her experience and education to perform a market analysis of the property. Determining the appropriate listing price is arguably the most important step in the listing process, often affecting how quickly the property will sell. A good agent will know the local market and trends, and will communicate these facts to you clearly.
Once the property is on the market, the listing agent schedules and conducts showings, and fields questions and offers. An experienced agent will effectively assist the seller to identify a serious buyer and negotiate the optimal purchase price. The agent will provide access to the property for purposes of the buyer’s inspection and final walkthrough. The agent should also have strong professional contacts in the local area, such as contractors or handymen, who can help a seller resolve issues that may come up at the home inspection. As the closing approaches, the listing agent will communicate with the attorneys on issues of scheduling and will assist the seller in procuring final documents, such the fire inspection certificate and final water reading.
The buyer’s agent’s role. A buyer’s agent is often hired to show properties to the buyer and assist in the negotiation process. An effective agent takes the time to understand not only the buyer’s cost parameters, but also his or her preferences and personal goals. An effective agent can provide guidance to a buyer on matters such as neighborhoods, schools, and commutes. The buyer’s agent will usually submit the Offer to Purchase to the listing agent, and will handle all negotiations. Once an offer has been accepted, the buyer’s agent typically arranges for access to the property for the inspection and communicates with the seller regarding inspection results. As the closing date approaches, the buyer’s agent arranges for the final walkthrough, and works with all parties to coordinate the closing logistics.
How agents are paid. Both the listing and buyer’s agents are typically paid a percentage of the sale price (often totaling 5 or 6%) by the seller at closing pursuant to a listing agreement between the listing agent and the seller. . The listing agent then typically pays a portion of that commission to the buyer’s agent. As a result, the buyer often pays nothing directly to her realtor. Although less common, the buyer may also contract with and pay for his or her agent directly. In any event, it important for all parties to know at the outset how much and when their agent expects to be paid.
What agents cannot do. Even the most qualified and experienced agent may not give legal advice. In order to ensure that their legal rights are fully protected, all parties should hire real estate attorneys. An experienced real estate attorney will ensure that the party understands his or her legal rights and obligations under the purchase contract. A diligent attorney will also track deadlines and advise on issues of title or property condition as they may arise. Furthermore, only a licensed attorney can conduct the closing of real estate in Massachusetts.
In the end, the right question is typically not whether to hire a real estate agent, but which one to hire. The services provided by an experienced, licensed realtor are often well worth the commission paid by the seller. Buyers too can benefit greatly from their advice and experience, often at no cost.
Jessica Sales Cohen is a partner at Cohen & Sales, LLC, a Waltham based law firm with a combined 30 years of experience in Real Estate Conveyancing and general litigation. For more information contact Cohen & Sales, LLC at (617) 621-1151 or info@cohenandsales.com.