Las Vegas, Nevada – Is it really necessary to hire a Real Estate Broker to sell your home? Let’s face it; the internet has changed the way we do business and Real Estate is no exception. Web sites such as Zillow, Auction.com and Hubzu offer Sellers the option of listing their homes online. (i.e. “For Sale By Owner”) You certainly don’t need a Real Estate agent to take photographs of your home or upload them to the internet. Additionally, it doesn’t take much skill (or a Real Estate license) to create some flyers, place a “For Sale” sign in the front yard, or hold an “Open House” each weekend. Before you get started, there are some serious issues to consider. Rest assured, there are a multitude of valid reasons why each state requires agents to be licensed. Real Estate agents have been trained to handle situations you may not have considered. Here are some reasons you might want professional representation when selling your home:
FINDING A BUYER IS EASY. FINDING “THE RIGHT BUYER” TAKES SKILL:
So you found a Buyer who loves your home and wants to write a list price offer. Additionally, they show you a “Pre-Approval” letter from a major bank stating they’ve been “Pre-Qualified.” What could possibly go wrong? More than you think! Did you know that many reputable banking institutions will “Pre-Qualify” a Buyer over the phone without running a credit report or verifying the Buyers financial information? This is perfectly legal and happens every day. The pre-approval letter is issued by the bank based upon verbal information provided over the phone. (We know Buyers always tell the truth, right?) Unless a complete credit report has been obtained and reviewed by the lender, and the Buyer has filled out a written loan application and provided their lender with the appropriate financial documentation (i.e., current tax returns, pay stubs, bank statements, W-2’s, etc.,) there is no way to tell if a Buyer is actually eligible for financing. Many times, Buyers are unaware of what’s on their credit report. A prior foreclosure, a lapse in employment or a judgment can easily kill a loan. As a Seller, why would you take your home off the market and enter contract with a Buyer unless you’re absolutely sure they are quailed to make the purchase?
FEDERAL LAWS PROTECT BUYERS BUT FEW LAWS PROTECT SELLERS
Did you know that if a Cash Buyer makes an offer to purchase your home, you can ask the Buyer to provide proof showing they have the funds to make the purchase, however, if a Buyer is obtaining financing, you’re NOT allowed (under RESPA laws) to ask the Buyer’s credit score? Why does this matter? Let’s say (hypothetically) a Buyer must have a minimum FICO score of 640 to qualify for financing. What if you accept an offer from a Buyer who has a FICO of 641? They qualify, right? Remember, a typical escrow is 30-45 days. What if the Buyer makes a few trips to Wal-Mart (for groceries and moving supplies) and puts these purchases on their credit card. It is possible their credit score could drop 2-3 points (or more) and their loan could be denied. Before you pack your belongings in the moving truck, you certainly don’t want to get a call at the last minute from the Buyers lender informing you the Buyer no longer qualifies for financing. A licensed Real Estate agent has the ability to verify that a Buyer is qualified to purchase your home. They know the right questions to ask, and they know the steps required to follow up on the loan process.
BUYERS CAN CANCEL ANYTIME THEY WANT, WITHOUT PENALTY?
Did you know that almost every Real Estate contract is “contingent” upon the Buyers ability to qualify for financing? This is great news for Buyers, because it allows them to place offers on your home without risk. If anything goes wrong with the loan, or if they lose their job, get divorced, etc., they can legally cancel the agreement at any time, so long as they can prove they no longer qualify for financing. This means that on day 29 of a 30 day escrow, the Buyer can call you at 11:59pm, (after you’ve packed up your home, cleaned your house, shampooed the carpets, turned off the utilities, cancelled the gardener and have all your worldly possessions packed in the moving truck,) the Buyer can exit the contract without penalty? Not so fast! An experienced Real Estate agent will require the Buyer to put “earnest money” into an escrow account to show “good faith” that the Buyer will perform to the mutually agreed upon terms of the contract. Additionally, a good agent will go to great lengths to protect you by establishing a date (in the contract) which ends certain contingencies, including but not limited to the financing contingency, appraisal contingency, inspection contingency, etc. By establishing this date in writing, (agreed to by all parties) the Seller may be entitled to receive the Buyers full earnest money deposit in the event the Buyer fails to perform. Additionally, the amount of the earnest money deposit should equal the possible damages incurred should the Buyer default (i.e. you could wind up making additional mortgage payments, paying additional utility bills, HOA fees, landscape maintenance, etc. until a new Buyer is found)
LEGAL RAMIFICATIONS AND CONSEQUENCES
When you hire a Real Estate Broker to sell your home, they have a fiduciary responsibility to professionally represent you and follow the Real Estate rules and guidelines specified by your state. Their license and obligation to take continuing education courses ensures they are knowledgeable with current Real Estate laws and procedures. There are many things that can go wrong in a Real Estate transaction. When you’re represented by a Broker, they are responsible for ensuring all pertinent Real Estate rules and procedures are followed. If a mistake is made, they could be legally liable. If you are not represented by a Broker, and something goes wrong, you could easily wind up in court and be held responsible for possible damages and legal fees. Each Broker must carry insurance in the event of litigation. While Real Estate Brokers are NOT lawyers, they must carry the burden to ensure the transaction is completed properly. If you choose to save a few bucks and complete a transaction without representation, you run the risk of carrying this burden alone.
The decision to hire a Broker is a personal choice; however, no web site will ever replace the guidance and expertise offered by an experienced agent. Agents do much more than put up “For Sale” signs, take photographs, create flyers and host “Open Houses” with cookies. Entering into contract with the wrong Buyer could be a very costly mistake. Additionally, using a “generic” Real Estate contract from your local bookstore offers little or no protection for Sellers.
Bill and Francoise Myers, owners of The Myers Team and Top Nevada Real Estate agents with Simply Vegas Real Estate are nationally recognized for specializing in Seller Representation.
Visit their web sites at:
For Traditional Sales: http://www.LasVegasList4Less.com
For Short Sales: http://www.NevadaShortSaleInfo.com
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