It’s a fair question these days, do I really need a realtor to sell my home with all of the services available to me? Technically no you don’t but my experience with both trying to sell a home on our own versus with a realtor can lend some real world experience to those who may be struggling with this decision.
The Case For Sale By Owner
Odds are the first thing your thinking of is that 6% commission you’ll owe to sell your home. When you’re talking about a $300,000 home that’s real money. One of the most popular services ForSale By Owner.com lists houses for as low as $80.95 to as much as $809 depending on your area. Versus $18,000 for selling with a realtor that can add up easily.
By selling it yourself you’ve put yourself in place to control most aspects of the selling process. Of course this means that it’s entirely on you to get this home sold. Beyond listing you in the databases and a yard sign kit you’re responsible for finding prospective buyers, showing them the house and handling the house sale process. This means you get to control when the house is available to show and you don’t have to be constantly vacating your home when the realtors are around.
Things to Look Out For with For Sale By Owner
Multiple Listing Service
I would not consider any form of service to help sell your home without a realtor that didn’t list your home with the Multiple Listing Service (MLS). This is the system that real estate agents will access to show their potential buyers homes. It’s also the database that feeds most any of the research tools for prospective buyers. You’ll be missing a huge portion of your target demographic by not being in that database.
Security is definitely something to think about when selling your home yourself. That will be your phone number listed. You’ll be the one showing your home with strangers so you should take adequate precautions. This is really a shared concern for realtor or not but one you should consider nonetheless.
Don’t Forget the Buyer’s Agent
Remember that a traditional 6% commission with a realtor pays 3% to the buyers agent. If you don’t offer that commission there’s little incentive on the buyers agent to show their clients your home. So just because you listed your home for $500 doesn’t mean you won’t be paying out another sum of money for the pleasure of getting agents in your home.
The Closing Process
Many of the packages from the various services do not include help during the closing process. There is a lot that goes along with this process and having someone to help guide you through all of the steps is very helpful. You might want to hire a Real Estate Attorney or pay an agent a flat fee to help you with this process.
In the event that something goes wrong in the process the realtors are typically the intermediaries in this process. If you are doing it yourself you’ll have to interact directly with the buyer. I have been there and I was very thankful to have my agent in the middle of this process.
The Case for Hiring a Realtor
Selling a home is a large proposition and I can bet you would like to get the best money you can as quickly as possible. You probably are not an expert on real estate and 2 months spent online researching real estate is not a replacement for a good realtor who knows the business, the local market and the process. They will have the best information available with respect to market research so that they can recommend the best price for your home. They’ll be able to offer you tips on making your home more attractive to potential buyers. They’ll show your home for you, field all inquiries and present offers to you as they come in. In essence they remove the burden from you, with the exception of keeping your house clean. They’ll often highlight your home to agents in their office and schedule previews with groups of agents from other offices. In short they’ll be able to provide a lot of qualified leads that you might not know how to find.
Also don’t let cost be your sole determining factor. In many cases the commission is negotiable and agents might be willing to reduce their fee to say 4% with some reduction in services or other extenuating circumstances.
Things to Look Out For When Using a Realtor
In the end your relying on one person to represent your home. Do your research as in anything there can be unscrupulous people in any industry.
- A referral from someone you trust will go a long way here. What’s their selling history?
- Are they using your open house to gather potential clients or are they actively trying to sell your home.?
- Do they have a high quality website to promote your home? Is it a site that was created for years ago with homes that have been sold in the late 80’s?
- Do you even like them? If you feel slimy even being in the same room with them so will your buyers.
My Personal Experience
I have to admit my view is rather jaded because I’ve gone both routes. We originally listed our house by ourselves and had approximately two potential clients come through our home. One of them was looking for a creative lease option arrangement because they couldn’t get credit and the other turned out to be a neighbor who just wanted to see the inside of our house. The rest of those that came through the house were realtors trying to offer us their services. We had our home listed for 6 months with terrible results. Of course the housing market wasn’t exactly booming in our area at the time but still it just wasn’t being seen by clients. We even tried offering a generous commission to buyers agents but there was not much interest.
We eventually ended up listing our home with a seasoned agent who came highly recommended. He offered a lower rate for commission because he knew of our financial situation and he worked his tail off getting everyone he could through our house. Once we got an accepted offer the process was incredibly easy and he provided us a van to use for free to help us move. After that experience I will absolutely do the same if we ever decide to move again. The stress of selling a house can be much reduced if you let a professional take care of the details for you. How about you what are you home selling experiences?
Be sure to check out some of the other Money Mavens take on Hiring a Realtor:
- Tom’s View from Canadian Finance Blog Should You Use A Real Estate Agent To Sell Your House?
- Green Panda Treehouse: Would You Take a Realtor To Sell Your House?
- JoeTaxpayer asks Using a Real Estate Broker?
- Len Penzo takes the stance Real Estate Agents: Why You Rarely Get What You Pay For.
(Photo Courtesy: TheTruthAbout…)