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    DENVER REAL ESTATE BLOG

    Buying Real Estate in the Digital Age: Is a Real Estate Agent Obsolete?

    Posted at 05/25/2017 07:20 AM by Amy Fontinelle

    BUYING REAL ESTATE IN THE DIGITAL AGE- IS A REAL ESTATE AGENT OBSOLETE?.png

    Hiring a real estate agent to buy a home might seem unnecessary given today’s technology. No longer is a broker a gatekeeper with exclusive knowledge of which properties are available for sale. Websites and apps from Zillow, Trulia, Realtor.com, and Redfin allow prospective buyers to search for homes before ever meeting with a real estate agent. These sites also provide educational articles about buying a home.

    As a result, today’s buyers enter the real estate market educated about the purchase process and with a good idea of what they want, thanks to the high-resolution photos, virtual tours, neighborhood information and property details available online. Millennial buyers are especially likely to turn to online sources for information.

    But even though buyers may be able to find properties they’re interested in purchasing online, 88% of them still hired an agent in 2016, according to the National Association of Realtors. Almost all buyers who used an agent said they would do the same or recommend them to others. Another 6% of buyers purchased a home directly from a builder or builder’s agent. Almost no one is going it alone.

    How Real Estate Brokers Complement, Augment, and Outperform Online Services

    Buyers clearly still find value in using a real estate broker even though they could attempt to forego one altogether through a service such as SideDoor, which eliminates agents and commissions, and provides a platform to negotiate contracts and complete the entire transaction online.

    However, buyers will only find for-sale-by-owner (FSBO) properties on SideDoor, and its listings don’t appear on the MLS unless sellers pay for that service separately through another real estate company. Buyers will likely need to hire a real estate lawyer to complete a home purchase successfully.

    If the buyer instead worked with a real estate broker, the buyer would typically not need to hire a lawyer and would get the real estate agent’s services for free, because sellers pay the commission to both the seller’s and buyer’s agent in a home purchase transaction.

    Buyers also face various shortcomings when using sites such as Zillow and Trulia, explains Jenny Usaj, managing broker and owner of Usaj Realty.

    These sites are not currently synced with the real estate agents’ Multiple Listing Service, ReColorado (though they are completing negotiations to start syncing soon, she says).* Listings at those sites may be out of date and a property that appears to be available could already be under contract. No buyer wants to fall in love with a home online only to learn that it isn’t really on the market.

    Furthermore, while these sites are user friendly, their algorithms for calculating home values are only as good as the data in their systems, which are not always accurate. It can be hard to tell if a listing price is fair when relying solely on a website. A real estate agent will have knowledge of the surrounding area and can tell you for what comparable properties have recently sold.

    Usaj says Realtor.com is the most accurate, but because the site only lists properties represented by Realtors (a higher level of real estate professional), it may not have complete data.

    “Realtors with a capital R are a higher level of licensed agents,” Usaj explains. “They are held to a higher ethical standard and market knowledge.”

    Half of the 5,645 buyers surveyed by the National Association of Realtors said the main reason they sought out an agent was for help choosing the right home—something an online service can’t do in a truly personalized way. For most, a real estate broker's value comes from serving as an advocate for clients, providing expert advice and staying on top of all the deadlines involved in the closing process.

    5 Key Benefits Real Estate Agents Offer That Websites Can’t

    Even when online listings are up-to-date and accurate, they can’t tell you things an experienced agent can.

    1. While homebuyers can read about an area online, it’s not the same as getting knowledge and advice from a local Realtor. Also, an agent can suggest neighborhoods and properties you might not have considered that could meet your needs.
    2. Realtors can help make sure you are purchasing a home with no surprises and that will stay within your budget for repairs and renovations. Even before you pay for a home inspection or get estimates from contractors, a Realtor may know about common problems with homes in a particular location or those built during a specific time frame.

    They might also know what the best contractors in the area charge for a kitchen or bath remodel. If a home clearly has more problems than you can handle or afford, an experienced Realtor may be able to give you that information early on, before you go to the trouble of making an offer and going under contract.

    1. Thanks to their personal relationships with brokers and sellers who are looking for buyers, Realtors can help buyers in a fast-paced market like Denver’s hot housing market by matching them with properties. An agent might know about a house that’s perfect for you that’s not yet on the market. Buyers who rely solely on online listings will miss those opportunities.
    2. Realtors can help you get the best deal by negotiating your contract with the seller’s agent. Buyers who don’t have agents may not have the skills or the experience to thoroughly understand, let alone successfully negotiate, a real estate contract. And because it’s the seller who pays the agent’s commission, there’s little reason for a buyer to forego an agent. An agent can also help the buyer negotiate with the seller for repairs or price reductions if the home inspection reveals problems.

    As well, there is more to strategize and leverage than your purchase price, Usaj explains. Other important components of your contract include terms, dates, inclusions, exclusions and contingencies. Perhaps you want certain appliances or even furnishings included in the purchase or you want to be able to move in by a certain date. An agent can help you negotiate those items.

    1. By working with a professional Realtor, you’ll have someone helping you manage deadlines and stress to ensure a smooth process until you get the keys to your new home. There are multiple deadlines to meet between the time a home goes under contract and the deal closes, and missing any of them could cause the deal to fall apart.

    Moreover, there are nearly always hiccups in the closing process, and having a Realtor to help you manage both the logistical and emotional aspects of these occurrences can be a major relief.

    Benefits of Working with a Realtor

    Most real estate brokers, but not all, are Realtors. All Usaj Realty agents are Realtors. What sets a Realtor apart?

    For example, Realtors have a fiduciary responsibility to their clients. That means they are contractually obligated to look out for your best financial interests. The National Association of Realtors requires Realtors to follow these and other obligations—not only to clients, but also to the public—elaborated in its eight-page Code of Ethics and Standards of Practice.

    That’s a level of responsibility you can’t get from most websites.

    The Bottom Line

    While real estate websites can be a great source of information when you’re just starting to look for a home, joining forces with a Realtor once you get serious about buying is the way to go. Their expertise will help you complete the transaction as quickly and as painlessly as possible.

    * Editor's note: As of this posting, REColorado and Zillow came to agreement to allow syndication of listings.

    Categories: Home Buying