Sacramento Real Estate Gal Answers!

Today's answer is directed toward this post about the necessity of a buyer's agent and the comment that followed. I thought writing about it and answering the questions raised in it through an "Ask Sacramento Real Estate Gal" feature would make more sense. So here goes!

Question/Comment:
"The buyers are going to get a loan and the bank is going to require a [sic] appraisal which will protect the buyers from overpaying by 25% so really they still don’t need to use you. Oh and say they wanted to get their independent appraisal just to be sure… I’m sure $300 - $500 is lesser than your commission. I realized [sic] the buyer doesn’t pay your commission but he could use that as a negotiation tool to get a better price on the house. Realtors are only needed for very uneducated people or people that have a very high value on their time such as very, very rich people. People use Realtors because they are to [sic] lazy to get educated about a very simple process. My .02 cents."- Luke Hoppel.

Answer:
Luke,
The basic premise of your argument is flawed because even if the buyers don't use a Realtor to represent them, the seller will have a seller's agent. Whether the buyers use a Realtor or not, the Realtor on the seller's side will have to be paid. There is no negotiation in terms of commission because the fee for the Realtor is set at the time when the listing agreement is signed - with the seller.

Another thing - I understand people can really get their hands dirty and buy and sell a house on their own and actually I encourage people to learn as much as they can about the process. I don't think most people are lazy about the process. I think frankly that they want to have a good quality of life. Sure you can do everything yourself - in fact, why even buy a house made by someone else, why not grow a tree yourself and then make a house out of it. It's cheaper!

Obviously, I'm exaggerating. But I'm doing so to make a point. Using the services of a professional who does the same thing day in and day out makes all our lives easier. I'm very capable of doing my own taxes, for example, but am I studying taxes everyday of the year, learning what has changed from last year? Am I sure I'm getting all the deductions I can get? No. Which is why I use my tax professionals and that's the reason most people use a Realtor.

Not to mention the liability aspect of things. Have you noticed the lack of documentation in a FSBO, the kind you support? Have you noticed that most of them are usually 10 - 20% overpriced in any market?
What's going on here?

Paying someone for the specialized job they do is not only important it's the basis for our free market economy. Sure, it's cheaper to do it yourself, but the costs outweigh the benefits.