Why Representing Yourself Is A Bad Idea, Even For Attorneys
(Blog post published by Ryan on May 29, 2013)
In the past few years, I have run across so many people who are trying to save a dime here and there by thinking that they can represent themselves without the use of a buyer’s agent. When Austin real estate was in a down cycle, it wasn’t nearly as big of a risk as it is now. But when articles like this one come out every single week showing how Austin is one of the best places to live in Texas, it is bad practice. If you follow my blog, you know that Austin is one of the hottest markets in Texas. Yet I am still getting some calls from buyers and attorneys who think it is a better idea to “go it alone.”
I have dealt with a lot of attorneys in the past couple of years as clients. A couple of them started out just like you and then became my clients for life because of the service I provided to them.
First, let me say that while making a 6% commission is great, that is not what I intend to do on my own listings when a buyer comes along and wants to save money, by representing themselves. I do have a listing agreement with my seller that is outlined at 6%. As a policy, however, if someone wants to represent themselves, I allow a 2% consideration. This is outlined in my contract with my seller as well. The reason for this is multi-faceted. On the seller side, we usually take weeks getting the property ready: pre-inspection, make repairs, stage, and then have the home professionally photographed. The staging service is included in our price and it is a lot of work. Have you ever moved with your spouse and seen how stressful that is and how you can fight over it? My wife and I do this twice a month. Even having said this, I still do not recommend that anyone represent themselves. They should employ the services of a good Austin realtor.
Why Do We Charge 1% To Facilitate The Sale For A Non-Represented Buyer?
We have to go out to the property, to let the buyer in, every time they want to get into the home. We also have to arrange access for inspectors, appraisers and contractors. We handle generating the paperwork, changes to the terms, and do any of the general transaction management that is usually shared with another agent. This usually happens even if the other party is an attorney. This is a huge drain on our resources, and we feel that it is worth the 1 percent to facilitate this part of the process.
So Why Would An Attorney Want The Services Of A Buyer’s Agent When They Can Represent Themselves?
First and foremost, we have access to MLS. This in itself is not the biggest deal, but it is worth something.
Secondly, in this seller’s market in Austin, it’s good to have someone who has their hand on the pulse of the market. Good properties move fast. Period. You can probably tell that of the fourteen properties that are on the Austin MLS now in area 7, almost all of them are fixers. And maybe that’s what you are looking for, but if they were fixers and priced well, they would be gone in a matter of days. You need to know when a property hits the market as soon as it hits the market.
Also, we can provide data to you directly from the Austin MLS that demonstrates value on the property, either positively or negatively. In addition to the raw data that is provided by MLS, an agent that really knows an area like I do can provide insight on a street-by-street basis. For instance, in Barton Hills, the homes that are on the south side of the neighborhood can theoretically be worth less than the homes towards Zilker. My own house would be worth significantly more it were a mile closer to Zilker.
Another reason that agents don’t like to work with attorneys is that they are scared that if they mess up, they will get sued. I don’t have that fear because I work with a lot of attorneys myself, and my father is an attorney. Attorneys are human beings, just like the rest of us. They have a need for housing and we, as agents, should embrace that need. Also, from my own experience with friends and family, attorneys are NOT sue-happy people. BUT, a lot of agents are scared none-the-less.
You know that old saying about an attorney who represents himself? He has a fool for a client.”
Finally, a worthy agent is involved with other good agents. I have a group of agents whom I communicate with. They alert me to new listings BEFORE they hit the market and I do the same for them. We are top producing agents and we have worked together numerous times before, and we LIKE to work together because we know that, in all likelihood, things will run smoothly.
If I have a hot listing in Barton Hills, I am sure to get multiple offers. If one of those offers is from a no-name agent at a no-name agency that I have never heard of, and another one is from an agent that I have successfully closed properties on, I am going to tell the seller of my past success with that agent. The same thing goes with non-represented buyers.
Listing agents, for the most part, do not like to work with attorneys as buyers for the reasons I mentioned above. I don’t mean any offense by this (as I said, my own father is an attorney) but it is true. They know that it will likely mean more work on the listing side, and attorneys may try to re-invent the wheel when it comes to contracts.