Do I Need a Real Estate Agent to Sell My Home?
For most of us, buying or selling a home is the biggest financial transaction we’ll ever make. With hundreds of thousands of dollars at stake, it’s nerve-wracking to say the least. At the same time, we don’t want to leave any money on the table if we can help it.
Selling a home is costly. There are closing costs, home inspections, repairs, and fees that chip away at your net profit. Those fees aren’t small - they can add up to tens of thousands of dollars. It’s enough that you may ask yourself how you can save on some of those costs. The largest costs are the real estate agent fees.
Can you forgo working with a real estate agent and sell your house on your own? Technically you can, but selling your own home is not for the faint of heart.
Before you try a for-sale-by-owner (FSBO) route, you want to make sure you understand what you’re getting into. There are more than a few reasons why so few people sell their home on their own.
Some Facts About Home Sales
It’s helpful to keep in mind some basic facts about selling a home. Roughly 90% of homeowners opt to work with a real estate agent. About 10% of those attempt a FSBO sale, but end up working with an agent. According to Zillow, it takes an average of two to three months to sell a home. It’s perfectly legal in all fifty states to sell your own home, as long as you are able to adhere to local laws and regulations. However, over twenty states require that you have a real estate attorney to oversee the paperwork.Selling Your House on Your Own
It’s no wonder that people consider selling their homes on their own. In most situations, the seller pays the fees, and the average commission rate is 6%. (Typically, real estate commissions are split between the seller’s agent and the buyer’s agent.) That 6% fee adds up to $12,000 for a home selling at $200,000 and $18,000 for a home selling at $300,000. That’s a lot of money. The big benefit of selling your home on your own is that you won’t have to pay commission fees. But that’s not the whole picture. In fact, that’s a deceptively attractive aspect of the situation. There are a lot of other variables at play.Downsides of Selling Without a Real Estate Agent
Sure, the extra $15,000 or so you save in commission fees is enticing. But, let’s look more closely at how you pay in other ways when you try to sell your house on your own.You’ll have a lot of extra work.
Real estate agents get paid because they have a great deal of knowledge about how to sell homes. They understand regulations, know the local housing market, and know how to market homes to potential buyers. When you attempt to sell on your own, you’re signing up to take all that on.You’ll have a lot of stress.
Moving is already a lot of work. You’ll be stretched pretty thin taking on a realtor’s job, too. You can’t get blood from a stone, as they say. Packing, decluttering, staging your home, reading regulations on home sales, and looking for buyers may leave you overwhelmed. Family time, work, and your health are bound to suffer.You don’t know what you don’t know.
A lot of people try selling their homes on their own. As mentioned, a fair percentage of them decide to go with an agent in the end. It’s likely they simply didn’t understand what they were getting themselves into. When you are brand new to something (and, let’s be honest, most of us don’t have real estate knowledge in our back pocket), it’s hard to envision all the steps you need to take to accomplish your goal. Did you know you should have title insurance? Do you know what an MLS is? (See below) Do you know how to negotiate offers? How will you handle the curveballs that come your way? Real estate is a steep learning curve. Are you ready?You don’t have access to real estate marketing tools.
Marketing is crucial to selling your home and getting the asking price you want. When you sell on your own, you miss out on an important marketing tool---multiple listing services (MLS). An MLS is a sort of cooperative where real estate professionals share with one another the properties they have for sale. A seller’s agent will check the local MLS to price homes for sale. MLS is often the first place an agent lists their client’s home for sale. It’s also the first place realtors check when they are helping potential buyers. Only licensed real estate agents can list in an MLS. Individuals selling their own home don’t have access, unless they pay an agent to do it.Lack of knowledge can cost you.
Here’s the kicker. You may think you’re going to save yourself a lot of money by not working with an agent. But you can lose out by not getting the asking price you want. According to the National Association of Realtors, home-sellers who work with an agent get an average of $295,000. People who sell their own homes sell for $217,900 on average. That dwarfs the amount of money spent on agent fees. Why such a large difference? Real estate agents know the tricks of the trade - like how to market, how to show a home, and how to negotiate. Also, if it takes a while to get up to speed, your house may sit on the market. This leads potential buyers to wonder if there is something wrong with the home. It also gives them an advantage when it comes to making an offer.Hidden Costs of Doing For-Sale-By-Owner
There are other costs that factor into the bottom line when you sell your home on your own. Some costs come from hiring real estate agents for a portion of their services. For example, people sometimes hire an agent to do a competitive market analysis to help them price their homes correctly. You may also decide to pay an agent to list your house in the local MLS. In nearly half of the U.S., you will need a real estate attorney to handle the paperwork at the closing. While you won’t be paying a seller’s agent fee, you will still be paying a buyer’s agent fees. That’s not an additional cost exactly, but it’s good to keep in mind that the buyer’s fee doesn’t disappear. However you decide to sell your house, let us help you with your move! Google Rating
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