When deciding how to go about the undertaking of selling their homes, homeowners should carefully consider the pros and cons of hiring a real estate agent. While most sellers choose to hire an agent to advise them with the sale, a minority of them choose to sell it themselves. In 2006, these “for sale by owner” (or FSBO) sellers totaled 12% in 2006, according to the National Association of Realtors. FSBO sellers stand to protect an enormous amount of money, but to do this effectively, they must be proficient and shrewd in a territory which they may find strange.
In the U.S., real estate agents typically take 4 – 6% of the value of the home, which many home owners view as unjustifiably large, considering the agent puts none of their own money into the home and comparatively small amount of their time. Yet, sellers must take into account that this fee is usually split between the buyer’s agent and seller’s agent, and the brokerage must be rewarded too. After taxes, the average real estate agent makes a humble living. Although, understandably, the seller doesn’t care about how the fee is split up, as they’d much fancy to pocket the whole amount.
There are also psychological considerations why homeowners choose to sell their homes themselves. Some people enjoy the feeling of being in control of the transaction and unencumbered by the potential problems or ulterior motives of professionals. The agent might want to accept a low offer because they’re in a hurry to sell the home, get their fee and move on, even if the seller is in no rush and desires to proceed at their own tempo. Moreover, the balance of the commission will be impacted very little by a change in the final sale price, leaving the agent with little incentive to dicker over a couple thousand dollars.
Of course, many sellers will easily pay a real estate agent a hefty commission, especially in buyers’ markets, when the seller can’t acquire sufficient attention to sell the residence on their own. Also, the thought of a property transaction– perhaps the most significant financial move of someone’s life – without having a professional may be unsettling to both the buyer and the seller. Brokers understand what agreements must be signed and which laws must be observed (such as disclosure requirements), decreasing a lot of hassle for the buyer and seller, and keeping them both out of the courtroom. A real estate agent will also operate as a shield between the buyer and seller, who could very well feel uncomfortable interacting with one another directly.
Potentially the finest reason to use the services of a real estate agent is that they know how to price a house, and, without their support, the seller may waste months trying unsuccessfully to sell an overpriced house, or, worse, sell the residence for too little. When selling a home devoid of an agent, owners will be accountable not only for making sure they pay the fees charged by numerous professionals, but they will also be responsible for finding these business people in the first place. A knowledgeable real estate agent will know to not skimp on the home assessment, for instance, by exclusively hiring InterNACHI inspectors.
Sellers can save thousands of dollars by avoiding the services of a real estate agent, but to do this adequately, they are going to have to earn that money. The subsequent tips are a good start for FSBO home sellers:
Don’t skimp on your own home preparation. Your selected house will be in competition with houses listed by agents who coach their clients on how to organize their house for showings. Be trained about legal requirements for disclosures in your location. If you do not reveal certain information to the buyer, they might be able attack you later in court. Familiarize yourself with the documents and contracts required by a real estate transaction. It usually pays to hire a lawyer to check the contract. Study ad and marketing tools available to you on the Internet. There are a number of sites that will even help you develop a video tour of your home. Hone your negotiating skills and be equipped to turn down some offers. Real estate agents are skilled negotiators, and the buyer’s agent might try to take advantage of your lack of experience.
In summary, it might make sense to seek the services of a real estate agent to aid with the sale of a home, but knowledgeable, responsible homeowners can save a great deal of money by selling their properties themselves.