November 1, 2002

Dear George: What does a real estate agent do that a good informed consumer can't do for himself? I feel with some research, I can bypass them and save the commission. Should I reconsider? -- J. Carmon, Bloomington, Calif.

Dear J.: Everything you want to know about anything is on the Internet or in the library. With self-study a person can be his or her own lawyer, dentist, tax accountant or real estate agent.

Nationally, 13 percent of residential real estate sales were sold by owners (FSBOs, or for sale by owner). Most people use agents because of their knowledge regarding a complex legal and financial transaction. The benefits licensed agents bring to the home selling process include:

1. Pricing. Sellers lack market knowledge. What information they have obtained regarding the value of their home may be erroneous. They are at great risk of selling their property for too little or overpricing and not selling their home at all.

2. Qualifying buyers. Some people's weekend entertainment is looking at homes they are not financially qualified to buy. Agents interview and eliminate lookers who are not financially qualified buyers.

3. Negotiating. Sellers rarely have the objectivity and skill to elicit and identify the buyer's objections to buying. Selling a home is more than just setting the price.

4. Legal. Real estate agents are not attorneys. They are, however, licensed and trained to draft purchase agreements and ensure that all appropriate disclosures are made.

5. Problems. Real estate agents earn their commission only when the sale is closed. Consequently they pay close attention to ensuring that problems with title, documentation and financing or any other issues are resolved in a timely manner.

Most people who write me have created a mess that could have been avoided if they used an attorney and a real estate agent when buying or selling their property. Professional services are costly but cheaper than resolving problems after the closing.

By the way, most FSBOs after one experience representing themselves vow never to do it again.

GEORGE KARVEL teaches real estate classes at the University of St. Thomas, St. Paul, Minn.