Working with a real estate agent

Local property prices have been going up steadily by around six to ten per cent annually since the Sixties. And over the last decade, some areas/localities even recorded an annual percentage rise of 20 per cent.

Rocketing prices and increased competition between local developers have combined to make the sale or purchase of a property one of the most stressful transactions for a consumer. And this is where real estate agents start to play an important role.

A real estate agent is more of a 'guide' than a 'salesperson'. Estate agents act on your behalf, providing you with advice and guidance and helping you buy or sell a home. There are also times when you need the most recent information about what has sold or is for sale, and the only way to get that is from an agent.

Remember, estate agents are professionals who spend their days valuing properties, attracting prospects, arranging viewings and negotiating sales.

The trouble is that most people view estate agents in the wrong light, most probably because there is the element of commission involved. It is true that the seller and buyer (indirectly) will be expected to pay a fee or commission if the property is sold. But in return, the real estate agent offers helpful services, the value of which may easily exceed the commission price and which you may not be able to obtain otherwise.

Helping the seller

The right asking price is perhaps the most essential ingredient in the selling strategy. It is always very tempting to ask a few friends and relatives for their opinion and finally determine the price.

But if the asking price is too high, people will not even bother to view it and the result is that you won't even reach the market place. Ask too little for your property and you are potentially giving away part of your assets!

An experienced estate agent can help you determine a reasonable asking price by giving you up-to-date information on what is happening in the marketplace and valuable information about competing properties. These are key factors in getting your property sold at the best price, quickly and with the least hassle.

Once your property is on the market, the real estate agent might have an inventory of qualified buyers who may be interested in viewing your property. If you are lucky enough, you might even sell property within the first few weeks!

An estate agency will also take care of your marketing plan. In most cases they will advertise your property free of charge. And if the buyer puts an offer that does not meet your asking price (as happens in most cases), the estate agent will use his expertise and negotiating skills to find a compromise and close the deal. The agent should also make sure the closing goes through as planned and the change of possession takes place as smoothly as possible.

Helping the buyer

When you decide the time is right to invest in a property, you'll need to ask yourself how much you want to invest. The next logical step is to find properties that fit your needs and requirements.

But do you have the time, energy, sources of information and market knowledge to find the right property?

A real estate agent has many resources when it comes to the selection process, with objective information about each and every property that meets your needs.

A real estate agent will also:

• offer a wider choice by showing you a large selection of properties

• explain procedures and expenses involved in buying a property in Malta

• negotiate the right price

• suggest a reputable notary and

• keep you informed as new properties come onto the market

Remember... a skilled and knowledgeable real estate agent will save you time and money.

How should I select an agent?

• Ask friends or relatives for recommendations.

• Check the business directory or drive around the neighbourhood where you want to buy, looking for real estate agents specialising in particular areas.

• Look for an agent with a good reputation. Ask people who bought houses in the same area and see if they can give suggestions

• Call well established real estate agencies

The cheapest is not always the best. Find an agent who offers the service you need and want.

You may also want to seek the services of two or three different estate agents so that you can compare what each of them has to offer.

A final word

Real estate transactions involve one of the biggest financial investments most people experience in their lifetime.

Transactions today can easily exceed Lm40,000 for a good-sized apartment. If you had a Lm40,000 income tax problem, would you attempt to deal with it without the help of a certified accountant?

And if you had a Lm40,000 legal question, would you deal with it without the help of a lawyer?

Therefore, considering the small upside cost and the large downside risk, it would be foolish not to consider the professional assistance of a real estate agent!

Mr Cauchi is a property consultant with Re/Max Property Centre. E-mail kevin.cauchi@remax.com.mt