Why use a Real Estate Agent?

[Billy Knox]

Hello BP! 

I have a question for the group and was hoping to generate a discussion around this topic. 

Disclaimer – I am an instructor pilot in the Navy and not a real estate professional – so take everything with a grain of salt.

I recently completed a real estate transaction (sold our home) and I couldn’t help but think to myself – Why am I paying our Real Estate Agent so much money? Why do they get an equity stake in this transaction? And what do they actually do to earn that stake?

**If you are a real estate agent or know a real estate agent and are offended then my sincere apologies. I am not trying to denigrate anyone’s profession. I am sure there are plenty of agents out there that work really hard and are great people. Just asking the question.**

This got me thinking. I took a serious look at the whole real estate transactional process and it left me scratching my head as to what the actual value add of the real estate agent is these days. Understandable during the days of yore when all the data was exclusively held on the MLS and you needed agents to get access to reliable information. But we don't live in that universe anymore. The majority of data is open source and we can get it by simply looking at Zillow, county websites or heaven forbid taking a trip down to the county clerk's office and actually pulling the documents. So I now have all the information I need to make informed valuation decisions at my fingertips. Why am I giving up an equity stake for someone to run the same comparative market analysis I can run to come up with roughly the same number I would?

Well maybe they are useful when it comes to contracts and negotiations. I can see the argument there. The problem with that is that I spoke with a bunch of Real Estate Attorneys that assured me they can and do perform the same services (contract negotiations, advising, etc…) and they do it for a fixed hourly rate as opposed to an equity stake. Bonus – they have a doctorate in jurisprudence.

To me it seems like the future is moving towards a more streamline process. But I am interested to hear what the far more experienced professional investors and members of the BP community think... What, if any, is your experience navigating the waters of the real estate transaction process without agents and what are your lessons learned/thoughts on the subject? And on the flip side - what are the arguments for hiring and agent and giving them an equity stake in the transaction? 

Thank you for your time! And again, just asking the question. Seeking information/guidance/opinions on the subject. Not trying to upset anyone in the slightest!