5 reasons you still need a real‐estate agent
By Tara Struyk of Investopedia

You might think buying or selling on your own will save money, but it could be more costly in the long run. 

The proliferation of services that help homebuyers and sellers complete their own realestatetransactions is relatively recent, and it may have you wondering whether using areal-estate agent is becoming a relic of a bygone era. While doing the work yourself cansave you the significant commissions that many real-estate agents command, for many,flying solo may not be the way to go — and could end up being more costly than acommission in the long run. Buying or selling a home is a major financial and emotionalundertaking. Find out why you shouldn't discard the notion of hiring an agent just yet.

1. Better access/more convenience
A real-estate agent's full-time job is to act as a liaison between buyers and sellers. Thismeans that he or she will have easy access to all other properties listed by other agentsand will know what needs to be done to get a deal together. For example, if you arelooking to buy a home, a real-estate agent will track down homes that meet your criteria,get in touch with sellers' agents and make appointments for you to view the homes. Ifyou are buying on your own, you will have to play this telephone tag yourself. This maybe especially difficult if you're shopping for homes that are for sale by owner.Similarly, if you are looking to sell your home yourself, you will have to solicit calls frominterested parties, answer questions and make appointments. Keep in mind thatpotential buyers are likely to move on if you tend to be busy or don't respond quicklyenough. Alternatively, you may find yourself making an appointment and rushing home,only to find that no one shows up.

2. Negotiating is tricky business
Many people don't like the idea of doing a real-estate deal through an agent and thinkthat direct negotiation between buyers and sellers is more transparent and allows theparties to look after their own interests better. This is probably true — assuming thatboth the buyer and seller are reasonable people who are able to get along.Unfortunately, this isn't always an easy relationship.What if you, as a buyer, like a home but despise its wood-paneled walls, shag carpetand lurid orange kitchen? If you are working with an agent, you can express yourcontempt for the current owner's decorating skills and rant about how much it'll cost youto upgrade the home without insulting the owner. For all you know, the owner's latemother may have lovingly chosen the décor. Your real-estate agent can convey yourconcerns to the seller’s agent. Acting as a messenger, the agent may be in a betterposition to negotiate a discount without ruffling the homeowner's feathers.A real-estate agent can also play the “bad guy” in a transaction, preventing the badblood between a buyer and seller that can kill a deal. Keep in mind that sellers canreject a potential buyer's offer for any reason — including just because they hate his orher guts. An agent can help by speaking for you in tough transactions and smoothingthings over to keep them from getting too personal. This can put you in a better positionto get the house you want. The same is true for the seller, who can benefit from a hardnosedreal-estate agent who will represent his or her interests without turning offpotential buyers who want to niggle about the price.

3. Contracts can be hard to handle
If you decide to buy or sell a home, the offer-to-purchase contract is there to protect youand ensure that you are able to back out of the deal if certain conditions aren't met. Forexample, if you plan to buy a home with a mortgage but you fail to make financing oneof the conditions of the sale — and you aren't approved for the mortgage — you canlose your deposit on the home and could even be sued by the seller for failing to fulfillyour end of the contract. (Keep in mind that the details of any contract may vary basedon state law.)An experienced real-estate agent deals with the same contracts and conditions on aregular basis and is familiar with which conditions should be used, when they can beremoved safely and how to use the contract to protect you, whether you're buying orselling your home.

4. Real-estate agents can't lie
Well, OK, actually they can. But because they are licensed professionals, there aremore repercussions if they do than for a private buyer or seller. If you are working with alicensed real-estate agent under an agency agreement, such as a conventional, fullservicecommission agreement in which the agent agrees to represent you, your agentwill be bound by law to a fiduciary relationship. In other words, the agent is bound bylaw to act in his clients' best interest, not his own.In addition, most real-estate agents rely on referrals and repeat business to build thekind of client base they'll need to survive in the business. This means that doing what'sbest for their clients should be as important to them as any individual sale.Finally, if you do find that your agent has gotten away with lying to you, you will havemore avenues for recourse, such as through your agent's broker or professionalassociation or possibly even in court if you can prove that your agent has failed touphold his fiduciary duties.When a buyer and seller work together directly, they can — and should — seek legalcounsel, but because each is expected to act in his or her best interest, there isn't muchyou can do if you find out later that you've been duped about multiple offers or thehome's condition. And having a lawyer on retainer any time you want to talk aboutpotentially buying or selling a house could cost far more than an agent's commissionsby the time the transaction is complete.

5. Not everyone can save money
Many people eschew using a real-estate agent in order to save money, but keep inmind that it is unlikely that both the buyer and seller will reap the benefits of not havingto pay commissions. For example, if you are selling your home on your own, you willprice it based on the sale prices of other comparable properties in your area. Many ofthese properties will be sold with the help of an agent. This means that the seller gets tokeep the percentage of the home's sale price that might otherwise be paid to the realestateagent.However, buyers who are looking to purchase a home sold by owners may also believethey can save some money on the home by not having an agent involved. They mighteven expect it and make an offer accordingly. However, unless buyer and seller agreeto split the savings, they can't both save the commission.The bottom lineWhile there are certainly people who are qualified to sell their own homes, taking aquick look at the long list of frequently asked questions on most “for sale by owner”websites suggests the process isn't as simple as many people assume. And when youget into a difficult situation, it can really pay to have a professional on your side.

Reprinted from MSN Real Estate, December 9, 2010