Why hire a real estate agency and pay a commission when I can do everything myself? You have probably heard this question or even asked it yourself before making a decision to sell or buy a property. While hiring a real estate professional is a common practice in the Western world, there are still doubts and dilemmas about it in our country. One of the dilemmas that many people are not convinced about is whether to hire a real estate agency. When it comes to real estate transactions, some may think that things are pretty straightforward. There’s a seller, an interested buyer, and a property that will transfer from one ownership to another. Simple, right? Not necessarily. The seller and the buyer are actually like two opposing sides of a coin. What one of them considers a goal at any cost, the other sees as diametrically opposite conditions that disrupt their plans. However, the goal of both the buyer and the seller is the same – to make the best deal with the property. It is precisely in this strange (or maybe not?) gap that real estate agents can play a significant role. If you have ever wondered if they are even necessary in the selling process, the following reasons might help you finally form your opinion!
How much commission do agencies charge and who pays it, the buyer or the seller?
The negative attitude towards hiring an agency often stems from the commission. Commission or brokerage fee is a significant item in the financial structure for purchasing a new home or selling an old one for many people. The usual amount in our market is often 3 percent. There are lower and higher amounts because the law does not specify the exact percentage. It is also common practice for many agencies to charge commission to both the buyer and the seller. Make sure to inquire about this before viewing the property you are interested in. The Law on Real Estate Mediation is clear: the commission is paid by the client who commissioned the agency. This means that you have a written contract with the agency. Therefore, read what you are signing. In the world, it is common to purchase properties exclusively through intermediaries. Many experienced agents will tell you that we don’t even repair our shoes ourselves, but we go to a professional – a cobbler. It should be the same with properties, which are a bit riskier endeavor than shoe repairs. In recent years, the situation has also changed in our country. There are around a thousand agencies operating in the market, from Zagreb, Osijek, Rijeka, Istria, Split, and Dubrovnik, to smaller and larger towns. Competition is increasing, and agencies compete for clients. Many offer full-service solutions. You can easily check what this means and what you actually get for the commission.
How to verify a real estate agency?
The first step in verification is to find a list of real estate agencies. It can be found on the website of the Croatian Chamber of Economy (HGK). Check if the agency you want to work with is registered in the Registry of Real Estate Mediators. Trust only licensed agencies and mediators. Additionally, Google the name of the mediator or agency yourself, as the internet remembers everything. Their clients will gladly praise them if they are good, but also criticize them if they were not satisfied with their service. Before signing any contracts, inquire about what you can expect from them, what services they provide, and at what cost – what is the commission fee. Compare multiple offers. Finally, rely on recommendations from people you trust, who have recently gone through the same process of buying or selling real estate through an agency. If you have resolved all your doubts, which will save you time and avoid potential problems later on, here are 5 reasons why it is good to engage a real estate agency:
Real estate agencies provide security.
The work in front of agencies is not actually that easy. Their task is to check all the important aspects to ensure a flawless and secure process, but also to understand and recognize the needs and intentions of the property owners throughout the process. “Our task is, among other things, to try and react to warning signs, for which sometimes you need to have a sixth sense. Indicators are usually dishonesty and lack of transparency. In this process, we all need to be honest and well-intentioned, and only then it becomes a win-win situation.” – Ivan Varat, real estate advisor
Real estate agencies have knowledge and power.
Agencies are like treasure troves of experience and knowledge, which gives them an advantage in the game organized by the real estate market. We usually leave the resolution of important matters to experts, and there’s a reason for that – they provide us with the best solutions. Buyers or sellers should be aware of all the benefits that come from excellent knowledge of the real estate market.
“The knowledge that an agency possesses allows them to set the price in the best possible way. Furthermore, agencies know how to quickly sell a particular property, where to offer it, and in what way.” Ivan Varat, San Patrik Real Estate
Real estate agencies have excellent negotiation skills.
A real estate agent spends time with the seller and develops a relationship, giving them a significant advantage in the negotiation position. “The agent is aware of the seller’s limitations, the price range they are willing to negotiate, and the limit beyond which negotiations may offend the owner and be terminated, while still achieving the lowest price for the buyer,” explains Varat. Moreover, when the buyer and seller meet in the process, their acquaintance is at least several hours poorer compared to the relationship developed with a real estate agent.
“In that kind of communication, there is a lot of valuable time. A real estate agent can negotiate a slightly better price for the buyer. A wise buyer is ready to recognize that the agent has the right information, so they pay a part, but earn even more.” Ivan Varat, San Patrik Real Estate
Real estate agencies efficiently solve problems.
Different strokes for different folks. In the process of buying and selling, this saying applies to a very slippery terrain where misunderstandings and differences in personalities can greatly complicate things, even when complications don’t realistically exist. To ensure a smooth process in the best interest of all parties involved, a real estate agency takes care of it. Let’s not forget that the best real estate agencies collaborate with an entire team of experts. Contacts with lawyers, notaries, architects, and builders are at their disposal when they need advice to facilitate the buying and selling process or to find the best solution if a problem arises. Because every property has its buyer, but that buyer needs to be informed about every detail, including any contentious ones.
Real estate agencies also handle the legal aspect.
Is there anything more valuable than time? In this step, the real estate agent actually gifts their clients a considerable amount of minutes, hours, and weeks… The administrative part, which involves a multitude of paperwork, requires thorough understanding, and let’s not forget waiting in lines at counters in the final stages of transferring responsibility for the property to the new owner.
“Agencies take care of preliminary agreements, all articles of the purchase agreement, land register statements, handover protocols, registration of property rights in land registers, efficient transfer of utilities to the new owner to avoid waiting in line at the counters of responsible institutions.” Ivan Varat, San Patrik Real Estate
Every real estate transaction is, in general, a small crisis situation. Research shows that moving ranks high on the stress scale. Having a person who will expertly guide you through the buying and selling process is priceless. If you have realized why it is good to engage a real estate agency, don’t forget the basic prerequisite. Research which real estate agency is the best fit for you! And once you have found the right person, or rather, agency, they should smoothly lead you to your goal, whether it’s your new home or a property investment. Text author: Stanarica.hr
