In both my residential and bed and breakfast real estate practice, I see Buyers and Sellers choose to not hire professionals so they can “save” money. What both sides of the transaction are thinking is that they will save the commission that would be paid to a REALTOR. There are several fallacies I see in that approach to buying real estate.
First, there is only one commission, but two sides trying to save that amount of money; the math doesn’t work that way. Second, how do you verify the “right” price for the property so you don’t pay too much or ask too little if you don’t have a professional helping you with that research? Thirdly, do you have the training or experience to qualify
Buyers or Sellers regarding their integrity in representing the facts, ability to buy or sell, or how to sort and understand the facts when they are presented to you? A professional can help you with all of those things and more. Saving money is important, if you truly save the money and don’t get trapped in a “bad deal”.
I believe that is where REALTORS, and professionals in all walks of life, earn their keep, guiding you to make the best decision for your life and situation. Let me share some examples to illustrate some of the points I’m trying to make here.
A Buyer wanted to purchase a small B&B so they could operate it without hiring help; they wanted this B&B to support them in their retirement; they had set their sights on a quiet little town because they liked the feel of it. By working with a B&B Broker they saw that by paying just a “little” more money they could buy a B&B that, though bigger than their initial dream, provided them with retirement income — and it came with trained staff who helped them through their transition to innkeepers.
A Seller chose to hire a residential agent rather than a B&B Broker, because the agent was a friend and wouldn’t charge as much money for the sales commission as the B&B specialist agent would. The B&B languished on the market for several years — long past when the innkeepers burned out and quit running the business as well as they had initially. They finally sold for much less money than they initially wanted to. In my opinion, few residential agents know how to market such a specialized property. There is more to selling a B&B than there is in selling a house — there is the additional complexity of ALSO pricing and selling a business.
Another Buyer wanted a B&B in a resort community. They found one that fit their every dream, except it wasn’t for sale. Upon approaching the owners (without the service of a REALTOR), found that for a price they could indeed have the inn of their dreams. A few years later, when they were ready to sell their inn, they found its true worth — they could not sell the inn for what they paid for it, much less break even or make a profit. It hasn’t sold yet, after almost a year on the market. They hope they don’t burn out before the B&B sells.
In all illustrations used here, “saving money” was a driving motivation. Only the first example hired a professional, which resulted in getting the viable situation they had dreamt about for so long. To me, *that* is saving money. In the other two examples they not only did not save money, but also lost significant time.