Everything you need to know about hiring a realtor in Philadelphia
Rittenhouse Square realtor Maxwell Realty is proud to have over 50 years of service and commitment to clients, totaling $3 billion in Philadelphia property sales. Philadelphia’s luxury realtor Nancy Alperin, CEO of Maxwell Realty, IS the trifecta: she expertly owns, sells, and invests in the Philadelphia market. She practices what she preaches. Let’s fill you in on what to consider when choosing to hire a Philadelphia realtor, and how to get the most bang for your buck.
Should I Hire a Philadelphia Realtor?
YES. Hiring a real estate professional in Philadelphia fuels your process with expertise and power. Whether you are buying or selling, an experienced realtor is keen on “the big picture” and how to steer the ship, so to speak. Realtors also have access to tools and resources that are not typically available to prospective buyers or seller.
Some common reasons why it’s important to hire a Philadelphia realtor when buying a home include:
Realtors Have a Fiduciary Responsibility to the Buyer/Seller
Showing unnecessary private monetary particulars requests can be avoided; your professional real estate agent knows how to govern the entire process. Your realtor has a financial obligation to act your best interest — it’s legally binding. This holds true for self-represented buyers and sellers: showing financials to another parties’ agent should be called with due process.
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Philadelphia Realtors Eat, Breathe, and Sleep Real Estate Potentials
They are always on the know and inquiring about prospective properties. Buyer’s agents take note of what you are looking for and have an incredible amount of information to dissect:
- Assessing your needs and working within your budget
- Neighborhoods’ crime rates and demographics
- School rankings and proximity
- Market trends
- Home issues such as furnaces, leaks, roofs, foundation integrity, and pest infestations
- Fair market value according to nearby home sales – eliminate paying for more than what you bargained for.
- Setup your home inspection with an accredited source
- Inform you about mortgage lenders, options, and getting pre-approval
- Review sellers’ disclosures for accuracy
- Manage your purchasing process, prep you to be prepared for closing, and setup your closing.
Qualified Realtors Have Home Seller’s Agent Appeal
Realtors expand your potential buyer pool; many realtors do not list For Sale by Owner (FSBO) properties. Having a professional realtor represent the buyer attracts sellers’ agents and correct transactions. Paperwork and commission agreements that contract sellers to pay the buyers’ agent can have missing information and errors. Buying agents often experience delays or commission underpayments, causing them to steer their clients away from FSBO properties.
Realtors are trained to qualify potential buyers through questions, assessment, and review of pre-qualifiers. Also, potential buyers are known to prefer negotiating with the agent vs. the homeowner.
Should I Buy a House in Philadelphia Without a Realtor?
Managing the purchasing process on your own can be time-consuming, and ultimately infringe upon negotiations. This can mean being outbid on homes. Often, realtors have inside information and relationships with their peers, including the agents who are representing the seller, enabling more communication.
There are a few instances that can present favorable opportunities if you still choose to buy a home without a Philadelphia relator:
- Owners who have chosen to sell their homes without the help of a realtor prefer to negotiate with self-represented buyers because they can avoid paying realtors’ commissions.
- If you have a friend or acquaintance who is experienced in real estate, use them as a resource. Educate yourself (books, online, courses, recent homebuyers).
- You are buying and negotiating a sale with someone you know, or who you have a relationship with.
However, if you want to get the best deal for a home in Philadelphia, your first step should be contacting a Philadelphia realtor at Maxwell Realty.
The Home Buying Checklist
To ensure that you do not overlook anything in your home-buying process, review this checklist.
- Review your finances (debt to credit ratio), your credit reports, loans, current expenses, and cost of living, and then decide what you can afford.
- Decide what you want. How many bedrooms and bathrooms? Transportation? Neighborhood? Look at listings, go to open houses, and make a list. Compare average home prices, specific to neighborhood prices.
- Save money for a down payment. The more that you can put down towards your principal, the better off you will be for getting better interest rates and ranking higher. Create a goal. A 20 percent down payment is ideal. You can opt to put down less and seek out the available.
- Look for mortgage programs for first-time homeowner purchasers (if applicable) — the mortgage insurance you pay in your monthly mortgage payments will be higher.
- Research real estate agents and find one that you trust and that “you click with.” Referrals are always the best, hands down. Also, take a look at local listings – which agents have more listings in your areas of interest? More importantly, what are their sales stats for the last three months? Selling is telling.
- Reinforce that you are a contender by getting pre-approved for a mortgage. Get a pre-approval letter from your lender of choice to secure your purchasing power. This piece of paper can make a difference in bidding wars and negotiations.
- Make an offer and negotiate as you see fit. Your first step is to create an offer letter. Include any contingencies (conditions to be met) and/or seller concessions (possibly amended price because something is not up to par).
- Get a professional appraisal (mortgage lenders will require this).
- Get a home inspection to figure out if the house needs repairs or has old systems or foundations that may need to be replaced soon. We cannot reinforce how important detail to this is. A good realtor will have an excellent recommendation for you.
- Get a Seller’s Disclosure. Take notes of current conditions and possible repairs. Get sellers’ disclosure which should have all known needed repairs and devalued characteristics of their property.
- Negotiate. This is where having an agent is very desirable; they take the emotion out of it so that you can get the most out of your deal. Your inspection and appraisals may have offered some new information that may alter the final price. Your realtor can work on this. An example of an amendment is a ten-year-old leaking roof that may need to be repaired by the seller before closing, or they can adjust the price to offset the cost.
- Work with a title company for the transfer of ownership
- Sign closing papers and get your keys!
Should I Sell a Philadelphia Home Without a Philadelphia Realtor?
It’s understandable if you want to implement the FSBO process and avoid paying out excessive commissions. And although selling a home in Philadelphia is manageable, it’s definitely not a realistic idea. Here is why.
First, access to potential buyers will be limited. Realtors do not migrate to FSBO listings because of the risks that are accompanied by negotiations, loose ends, and commissions that are often underpaid. Additionally, you want to attract qualified buyers who can afford and complete the paperwork successfully.
Although you may want to refrain from paying commissions, in the long run, the national average FSBO home sale is LESS compared to sales assisted by an agent. The 2021 National Association of Realtors Profile of home sellers and buyers shows that agent-assisted home sales profited an average of $58,000 more than what individual FSBO properties profited.
Your Sellers’ Disclosure must be thorough. Contractual commissions to the buyers’ agent agreed upon must be abided to. You need to have an agent or a lawyer review your finalized paperwork to avoid errors that sometimes lead to lawsuits.
The Home Selling Checklist
If you are interested in selling your home, this checklist will ensure that you do not overlook any of the sales processes.
- Decide whether you are going to seek a realtor or sell your home on your own (FSBO).
- Clean, clear, simplify, and donate the home. It’s a good idea to hire a full-time cleaning service and a home inspector before pre-listing your home.
- Adding value to your home by making small changes can be made that may enhance your home value significantly. Repaint, resurface, and enhance where you can. Fixtures should be secured and can be replaced if needed.
- Stage your property. Depersonalize and remove any photos and valuables. Lighting should be bright; Use the high 3000k-3500k LED bulbs. Add plants. If you are hosting an open house, make cookies. Create an atmosphere.
- Have a real estate attorney as a resource for the signing of paperwork, transfer of title, and mediation of any disputes. FSBO property holders will need a realtor or real estate attorney to complete their paperwork.
What is the Difference Between a Realtor and a Real Estate Agent?
“Realtor” and “real estate agent” are two terms that may be used interchangeably, when the credentials are present to do so.
A realtor is a member of the National Association of Realtors (NAR) and must abide by the NAR Code of Ethics. They can work independently or hire agents to work with them and assume liability for their hired counterparts.
A real estate agent is a licensed individual who aids in selling and/or buying real estate. The Pennsylvania Real Estate Commission (PREC) grants licensure to potential agents. An agent must be employed by a broker and cannot be an independent identity.
How Can I Find the Best Realtor Near Me?
Choosing a Philadelphia realtor is the start of your journey. How to choose a realtor is one of the most important pieces of buying a home. Think of your realtor as an employee that you are aiming to hire. Your realtor is going to help govern many decisions, negotiations, and paperwork that will ultimately close your sale. You want the “best realtor,” and the best representation. With Philadelphia real estate, there are many choices to be made, whether you are a current resident or whether you are relocating to Philadelphia.
Here are a few methods you can use to choose the right realtor:
- Word of mouth. Recommendations from someone who had a great experience? The best resource is a referral! One person’s experience is not necessarily the next, so still profile and learn about your recommended realtor; however, a referral is an ideal place to start!
- Compare real estate agents by searching online — compare their listings and their reviews.
- Check the National Association of Realtors (NAR) website for its database of agents: you can search here by area. Members must meet specific standards and have agreed to a code of ethics.
- Interview (you are hiring, them, after all!) at least three agents. Have a list of questions, your goals, and your communication preference detailed. Chemistry is a must here. This is very much like a first date.
What to Consider When Profiling Your Philadelphia Realtor
- Find out if your realtor of interest is a qualified realtor. Ideally, a full-time realtor who is involved with the community and has a reputable reputation.
- Learn about your realtors’ sales experience. Here are a few questions to ask them:
- What is their track record in the recent past three months and year-to-date? Your real estate agent should sell a minimum of 35 homes over the course of the past year.
- Review the realtors’ listings. Review listings that are in neighborhoods that are of interest to you. Rittenhouse realtors, South Philadelphia realtors, Washington Square realtors, and Old City realtors can execute many neighborhoods — make sure they have the listings and recently completed sales where you are planning to live.
- What type of property sales is your real estate agent proficient in? Philadelphia realtors may sell only certain types of real estate such as commercial, residential, high-end, and low-income. Figure out their strengths by looking at their recent past sales. A few tools to aid you when accessing your realtor’s profile are Zillow, Trulia, and realtor.com.
- Look at your realtors’ reviews: Google, Yelp, Zillow, realtor.com, Houzz, and birdeye.com. Look for social media accounts.
- Google your realtor’s name and look for their involvement and mention within the Philadelphia community. A realtor who is involved in their community understands neighborhoods, trends, demographics, and many counterparts that come into play when breaking down sales.
- if you know someone who has worked with your realtor of interest, ask them questions! This is a gift of a resource in the personal experience.
- Practicing what they preach. Does your realtor live in Philadelphia? Have they ever? Do they invest in the Philadelphia market? Do they have relations with local businesses? This qualifies your realtor as being a known presence, contributor, and investor who believes in and understands the makeup of the Philadelphia community. A simple Google search can go a long way.
When you are ready to sell or buy a Philadelphia home, hire one realtor. Do your due diligence when comparing; formally hiring more than one realtor violates their code of ethics and may result in the loss of services. Check PA’s real estate department to make sure your agent’s license is valid. This is also where any disciplinary actions will be shown and red flags. Zillow also shows when agents’ licenses were issued.
What Should I Ask a Philadelphia Realtor Before Hiring Them?
You have searched the internet, asked friends and family, and reviewed realtors who represent properties in neighborhoods that you are interested in. Now you want to meet at least three and have some questions ready for their interview. Here are a few questions to get you started:
- What services do you primarily offer?
- Who do you mostly represent?
- How much experience do you have buying/selling in this neighborhood?
- How long are homes on the market in this area?
- Do you think this property is worth the asking price?
- What would you price my property?
- What marketing options do you use to sell a property?
- How do I pay you?
- What resources do you have that can make my buying/selling process smooth and impactful?
- Are there any disclosures I need to know upfront?
Compare your answers. Consider how you felt when talking with the agent; chemistry is important. Trust is important. Once you have made your decision, it is time to get the show on the road!
How Can Realtors Help You?
Realtors can make your home buying or home selling process smoother because they have resources and connections that they work with regularly. There are relationships, experience, and trust they have proven with people who have routinely taken part in their clients’ processes. They can be an extremely valuable resource.
Assessing Your Financial Needs
Your realtor has several, if not many, relationships with various mortgage lenders who can facilitate getting your pre-approval letter for a mortgage. This is a true power card to have. They can help you assess your financial situation, and based on what you want, can help you find a home that fits.
A realtor can help capture your financial reality and your home goals and produces options that integrate both. Allowances may have to be made here and there, but the big picture must be met.
A realtor can listen, assess, and be straightforward about what allowances would have to be made if any, for a dream home. Remember, the scope of a Philly realtor is committed to delivering you what YOU want and knowing that it is equally important to know what you do not want.
A Resource for Professionals
A realtor is also a great resource for working with experienced professionals during the home buying and selling process. For example, they can connect you with a great home inspector in Philadelphia (going with one on your behalf is a huge bonus!) You should attend this, always. Your realtor is great to have here. Take notes and make sure to review with the inspector as what was spoken and what goes down in the report must coincide.
You will need to hire a professional for a home appraisal (attending one on your behalf is a plus!). You should attend this, and your realtor, if possible. Recent updates may not be accounted for and this can enhance the valuation of your home.
Mortgage Processing and Validation
There are many steps to the mortgage process and much paperwork. Having an experienced professional who is invested in steering your process and who can oversee submitted information is invaluable. They can offer mortgage lender suggestions and programs that may be of interest to first-time homebuyers
Recommend a fair property value that you can ask for as a seller. This is where their resource for a home appraisal will be a major reinforcement. Realtors can also help assess, screen, and qualify potential buyers.
Use Marketing Resources for a Property Sale
MLS listings and relationships with fellow realtors and real estate agents are a huge tool and extremely effective in “getting your property on the map.” Realtors’ marketing, websites, blogs, social media, and community relations are all significant resources. They should heavily be marketing clients’ properties on their own website (as opposed to just the MLS listing), Pinterest, and whatever platforms they use.
How Much Commission Does a Realtor Make in Philadelphia?
Indeed.com cites that the average pay for a real estate agent is $77,747 in Philadelphia, PA, as of September 2022.
Since realtors’ salary is based on their commission, their salary depends on how many property sales they have completed and what commission they have collected. This includes overhead costs – fuel, MLS fees, marketing costs, and membership fees all must be deducted.
Realtors invest time, energy, and personal monies to create a path for property sales. Realized, actual complete sales are the only time they are paid.
Realtors’ commissions are collected by the buying and selling agents, and although they may be negotiated, they are typically 5 to 6 percent of the sale price. The commission is split between the realtor and the broker (listing agent). These commissions are sometimes negotiated, especially in volatile markets.
Pennsylvania ranks 35th in the United States in real estate fees — the average rate in Pennsylvania is 5.53 percent. The Philadelphia average rate is 6 percent.
The Pennsylvania Real Estate Commission (PREC) sets the guidelines for fair commission rates:
If a property sells for $200,000, when using the 6 percent commission rate, that is a split between the buying and selling agent: your agent gets 3 percent or $6,000 from the property.
The average buyers’ agent and listing agents’ commission may be split; however, this is not always the case. There are many instances where the commission split is 60 percent the buyers’ agent vs. 40 percent the broker’s (listing) agent. In this scenario, a $200,000 home sale results in your agent getting $7,200 (60 percent of the total commission) and the broker gets $4,800 (40 percent of the total commission).
Commissions are paid out and contingent upon the total cost of the home. When you complete your property sale transaction, these fees have already been accounted for within your cost.
Commissions are calculated before expenses and taxes. Agreements between agents are negotiated in many circumstances.
Negotiations between buying and listing agents may occur, especially during volatile markets. The seller is responsible for the buying agent’s and the listing agent’s (aka the seller’s agent) real estate commissions.
Realtors are only paid once the property sale is finished and all are signed.
Discounted brokerage firms offer lower commissioned sales or flat rates; the sacrifice here is large client pools and not as individualized attention.
Can I Negotiate Realtor Commissions?
You do get what you pay for and listing with a realtor puts you in the prime place to be seen: MLS listings.
MLS listings are private databases built and shared by real estate agents. You also get realtors’ expertise, connections, time, and negotiating power. Negotiations that occur usually do with less seasoned and less experienced realtors…which may mean less exposure to your market and a less fruitful sale.
If you are selling an expensive property, realtors may be willing to negotiate their commission.
Available listings that match your property may be limited; this may allow home sellers to negotiate commissions with brokers. Likewise, listings in the winter may not be as abundant as in the summer — check for trends.
Make the sale easier for your realtor – offer to upgrade some home features, pay for a 3-D online tour, added photography, staging your home. A faster sale means less working time for the realtor and a possible commission negotiation.
Hire a new, less experienced realtor who is more inclined to negotiate and get some sales under their belt. There is the risk of not getting as much money as your best-case scenario (with a seasoned realtor).
An investor selling and/or buying multiple properties with one realtor may be able to negotiate a commission.
Explore Hiring a Discount Broker
The internet pairs sellers with agents who are willing to abbreviate their commission; however, although one agent’s commission is adjusted, there is another half to the story. The buyers’ agent expects a full commission, as an independent party. These firms typically have a large volume of clients, so there is not as much individualized attention.
Some discount brokers accept a flat fee vs. a percentage of the sale for payment. Discount brokers may also mean curtailed efforts and a discounted sale. Do your
homework here and although the front end of the process may seem like “a deal,” you may be shorting yourself your greatest sale scenario and end up shorting your property sale.
Realtors do not get paid until the sale is made. Expenses such as commuting, ads, and office expenses are all out-of-pocket. Also, time and care are invested in clients’ home selling or seeking processes. Realtors have connections for home exposure in the housing market, negotiating power with their peers, experience, and knowledge of the communities; they have leverage for when the bidding wars begin. You get what you pay for.
Realtor Closing Checklist for the Client
To make a smooth transaction process for closing, there is a lot of paperwork and logistics that must be set in place. A purchase contract is signed by both parties detailing the down payment, the buyer’s inspection period, the closing date, and who keeps what (appliances and requested incidentals). Appraisals and inspections are complete. If appraisal created discrepancies, an appraisal contingency can be added to the contract to negotiate and resolve. Finally, the closing meeting is at hand, and where all is completed.
The seller prepares for the closing day by making certain the home is clean, documents are readily available, and the integrity of the home is to be received as expected:
- Clean your home — a total home cleaning service is a good idea. Make certain nothing is left behind.
- Store all receipts and warranties for appliances and home systems (boiler, air conditioning, heating) in one place. This also includes exterior work, such as a roof installation and warranty.
- The main water valve to the property should be shut off.
- Photo identification of all the sellers listed on the contract will be needed at the closing.
- Gather together all property keys, security codes, remotes, and entry/exit device assists.
- Final utility bills pending payment. Keep your home insurance and utilities intact until the title transfer and closing is completed, in the event something happens to the home during the transfer of ownership.
- If closing costs have not been electronically wired as of yet, bring a cashier’s check. Also bring a personal checkbook, should unplanned costs arise.
- Closing costs include real estate commission, taxes, utilities, insurance, escrow, title, and attorney fees (where applicable)
- All warranties are paid (if applicable)
- HOA dues are paid (if applicable)
- Bring home inspection paperwork and proof of repairs supporting the paperwork.
- The realtor will supply closing statements, seller disclosures, deeds, purchase contracts and all remaining documentation (and copies) to complete the closing.
- After all the documents are signed and the title is transferred, file for a change of address with utilities, businesses, and all necessary parties – and, of course, the post office. Now you can cancel your homeowner’s insurance and utilities.
- The buyer has been given the address of the closing meeting, typically hosted by their realtor agent. Identification, payments, signature and proper paperwork, a bunch of autographs, and the new residency is yours.
- Bring your closing disclosure. This is typically delivered to the buyer three days before closing. Review this document and make certain that the loan estimate, monthly mortgage payment, interest rate, and any other cited fees are aligned with your expectations.
- Any discrepancies can be brought up and resolved at the closing meeting.
- Your closing disclosure will have the balance due: it may be the down payment and/or closing costs. Two separate checks may be needed, so bring more than one. Your realtor will be able to inform you of the particulars in advance.
- Bring a copy of your homeowner’s insurance.
- Whoever is listed in the deed must attend to sign.
The home buying and home selling processes are involved, and there are many considerations to be made. Understanding your realtor and the purchasing and selling processes can help bring clarity to your goal — getting the home that you want or selling your home at its full potential.
Philadelphia hosts many wonderful neighborhoods and properties to consider: Rittenhouse Square condos, Rittenhouse Square homes, Society Hill condos, Society Hill homes, Fitler Square, Art Museum, Fairmount, Brewerytown, Old City condos, Old City homes, Fishtown condos, Fishtown homes, Pennsport condos, Pennsport homes, Queen Village condos, Queen Village homes, South Philadelphia condo and South Philadelphia homes, and South Philadelphia homes. Philadelphia has incredible, thriving neighborhoods with tons of character.
Rittenhouse Realtor Maxwell Realty is proud to call Philadelphia home, and to hopefully regard you as a neighbor one day soon! We are here for you to make it happen.