When it comes time to sell, many homeowners wonder, “Should I hire a full-service real estate agent to help me sell my home?” Although I am not a licensed agent, I get asked this question often. My answer might surprise you.
Let me start by saying that there is no simple answer. It depends on the housing market. It depends on what you feel are your capabilities. It depends on whether you have the time to manage the process. It depends on how quickly you need to sell…or whether you have to get it sold at all.
And in this tough housing market, many homeowners are spending money on home remodeling or updating, then trying to reduce expenses by using cut-rate agents or listing the home themselves, For Sale By Owner (FSBO). But is this effective?
Well, can you write marketing copy, create and place ads, get in the local Multiple Listing Service (MLS), take flattering digital pictures, arrange for a video “Virtual Tour,” hold open houses, produce professional flyers, negotiate a deal, and handle a comprehensive sales contract?
Although there are firms offering FSBO services that can help quite a bit with these things, there is sometimes a perceived stigma in a buyer’s eyes, particularly with higher priced homes. And then there is the very real liability issue of legal disclosures. In my experience, even the most skilled and reputable agents sometimes can be somewhat lackadaisical about disclosures, since very rarely does a buyer try to come back after the seller for a claim. But it does happen…so be sure to over-disclose. Also, it is essential that you get listed in your local MLS, but a FSBO can usually do this through a flat-fee MLS listing service (do a Google search for one in your area).
I have remodeled a number of homes for resale, and I’ve done the buying and selling lots of different ways. I’ve hired real estate agents. I’ve bought and sold privately with another private party. I’ve sold on my own to a buyer who was represented by an agent. And I can say that it’s always tempting to try to sell on your own to save the hefty commission, which is generally 5-6% (usually split 50/50 between buyer’s and seller’s agents).
By selling it on your own (FSBO), you can dictate how much commission you are willing to pay a buyer’s agent. However, the reality is that many buyers are uneasy about a home that is not represented by an agent, and in fact I have found that some agents won’t even show your home to their clients if there are plenty of choices of homes listed with other agents. Also, there are legal potholes, particularly regarding mandated disclosures, for which you would assume responsibility and liability. I have found, however, that most escrow agents will gladly help you (and the other party, if appropriate) navigate these potholes without the involvement of a real estate agent. I’ve done it this way a couple of times.
Alternatively, if your buyer is represented by an agent (whom you are paying a 2 or 3% commission), you might ask the buyer’s agent to handle your contractual obligations for a small additional compensation, such as 1%. I’ve done this before, too.
Most Realtors will tell you that it’s best to introduce your home to the market at a fair price with a big splash, generate lots of traffic and hoopla early, and try to get multiple interested buyers bidding up the price. They’ll say that if you put it on the market yourself at the wrong price and it languishes, then it becomes “stale” and will be harder to sell later. I think this is mostly true, but of course new buyers emerge all the time, so don’t let anyone scare you into doing something you really don’t want to do. I would say that if you are selling a house during a seller’s market (like we had from around 1996 through 2006), and if you feel confident in having the time, capabilities, and wherewithal to do all those necessary things, then you might want to consider FSBO or flat-fee discount listing brokers. If you have any doubts, however, then hire an agent and let them deal with the hassles. Even in a seller’s market, your house will likely sell faster if represented.
On the other hand, if you are trying to sell during a buyer’s market (like we are in now), you really should hire a good full-service listing agent. Although you might be tempted in a weak market to lower your price and make it up by not hiring an agent, the stark reality is that this is precisely the type of difficult market for sellers in which you really need a strong, well-connected, and well-respected REALTOR to give you the best chance to get it sold.
Be sure to consider all of the pros & cons before making a final decision on whether to list with a full-service agent. Another piece of advice I’ll share is this: Don’t assume all agents are the same. Get referrals and do research to find the best agent with the best customer service and best track record of success. And don’t hire an agent as a favor to them just because it’s your best friend’s cousin or your grand-nephew. Your home is a major investment, so treat it like a business decision.
Should You Hire a Real Estate Agent to Sell Your Home?
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