Realtors can get a bad rap. In this housing market, so many people think there isn't any leg work to do when it comes to selling their homes. As such, a number of homeowners attempt to save some money and list the home as a For Sale By Owner (FSBO for short). Naturally, a lot of agents will give some push back on this, but why is it something that you should not do?
First off, the biggest reason that people tend to try to sell their house themselves is to save some money on paying commissions. Those pesky listing agents typically get paid commission for both the buyer and the seller and then split it with the other agent. While commission is negotiable, this tends to be around the 6% number - 3% for the buyer and 3% for the seller. When you take a look at how much a house can sell for - especially in a market in which prices are ballooning, it's easy to see why a seller might be interested in saving thousands. But what does reality suggest?
Often times, if a buyer's agent reaches out to show a property, they are interested in how they get paid. If the seller doesn't pay them, that leaves the burden onto their buyer client who is already about to shell out thousands in down payments, inspection costs, and closing costs just to live there, so often times the homeowner will pay the commission to the buyer's agent, however reluctant they may be. That doesn't sound so bad, they get to save half on the commissions! While yes, that is technically true, as of March 17, 2022, the average FSBO house sells for approximately 26% less than a property sold by an agent. Suddenly, saving a couple percent on a commission doesn't sound so great, does it?
Not only that, but the number of houses that are listed by the owners that actually sell are incredibly low - approximately only 11% actually sell. Why is that? There are a number of reasons. Firstly, most people selling their homes themselves have a job or other hobbies that just take up a large amount of their time. If you hire an real estate professional, they don't have to set away a large amount of time on top of their job - that is their job. That gives you as the seller more flexibility to go and continue to enjoy your life. Additionally, most homeowners simply lack the marketing tools that are necessary to sell a home. Sure you can post on Facebook or Craigslist and of course you're going to post to Zillow, but it's difficult to get your property out in front of people who are actually in the market to buy a house. Your agent has the tools and understanding of how to reach these people who are really interested in buying.
The last point I'm going to make will vary based on your specific situation. Some people sell their house and move out of state. While your agent could potentially refer you to an agent to help you buy a house in whatever new market you're looking in, their best use is to help you on the flip side. If your agent is helping you sell your house and buy your house, they can put together a specific plan based on your wants, needs and understanding of the deal on your house, and like we said up top, when they help you buy, it's usually the seller who is paying them.
There are so many reasons why you should hire an agent to help you sell your home. I understand that many people have had a negative experience with an agent in the past. Give me or somebody on my team a shot. Not all agents are built the same. Not every agent will use the exact same strategies or be as easy/difficult to work with. Ultimately, despite the desire to save money and move quickly, you tend to make less and move more slowly when you attempt to sell your home on your own.
Reno Reed, Realtor
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