Study Says People Aren’t Using Real Estate Agents, for Bad Reasons
From skipping title insurance to letting the seller stay in the home after closing, there’s a lot of bad real estate advice out there. But one of the most ill-advised tips? You don’t need a real estate agent. The benefits of using an agent are well-documented, but it seems like an alarming amount of people haven’t gotten the memo. According to a new report from the home-improvement networking website Porch, a sizable portion of people across age groups are choosing not to work with a real estate agent while buying a home.
According to the report, a little over 35 percent of Millennials aren’t using a real estate agent. Their reason? Primarily money. 60 percent of Millennials who avoided using a real estate agent altogether said they did so because of the cost. This isn’t particularly surprising to see this generation try to save wherever they can, as the generation’s has faced huge financial roadblocks in terms of job stability and student loan debt.
Yes, while commission costs are a large part of real estate, this isn’t a smart way to avoid them. Buyers usually aren’t the ones paying the commission: The seller is!
But, even apart from that, working with an agent will likely save you money. Real estate negotiation is a skill, and agents work hard to get their clients a fair shake. Benefits include keeping you from submitting an offer that’s way too high, keeping the process moving along, and helping you really understand your budget, so you don’t end up buying a house that becomes unaffordable overtime, due to things like rising property taxes and HOA fees.
Now, back to the report: Another shocking piece of info? An even larger portion of Baby Boomers—37.2 percent—are approaching buying a home as a solo activity, not because they would save money, but because an overwhelming and self-reliant 76.3 percent think they’ll do a better job finding the right house themselves. Of Gen X-ers who choose not to work with an agent, 58 percent do so for the same reason.
Sure, maybe you don’t need the same amount of handholding if you’re buying your second or third house. This isn’t your first rodeo, after all. But don’t underestimate what an experienced real estate agent can do for seasoned homebuyers. It’s likely that they know a lot more than you do about the market you’re buying in and can make sure you’re not being taken advantage of by a seller’s agent. They’re also likely to be a voice of reason when the tough gets going and will point out your blindspots, whether it’s coming to terms with a more realistic budget or refocusing clients’ on their needs. They can even help with relocation and renovation planning.
Are all real estate agents created equal? Of course not. You may end up hiring the wrong real estate agent who doesn’t listen to you, or doesn’t have the type of experience needed for your purchase, or generally isn’t the strongest communicator. But don’t let that deter you from doing your due diligence and working with the right agent. It can be a time- and money-saving experience—you just need to make sure you’re working with someone who has your best interest in mind. (Here’s how to do that, BTW).