I have been on a real estate kick lately. The reason is that my wife and I are selling our home. We have been wanting to do this for some time, but this is the year. Our house actually goes on the market this week, so we are excited. I have talked about improvements to the home, along with home staging tips in order to help you sell.
I also spoke about how to tackle a to-do list. One thing that I have spoken much about is how to list your home. There is always a nice debate about hiring a realtor or listing your home on your own. I will share what we did and why, along with the pros and cons of both options.
Hiring a Realtor
When people start thinking about listing their home, they tend to think of going with a real estate agent. It is a very popular choice, but I think that it is a conventional choice.
Real estate agents work on your behalf to find buyers and close the sale. If you have a good Realtor, then you shouldn’t have to do much besides approving an offer and cleaning up loose ends. That being said, here are some pros and cons of hiring a Realtor.
Pros of Hiring a Realtor
- They do the legwork. They list your home, take the pictures, and do competitive analysis.
- They understand the market. Realtors work everyday in the real estate market. They can give you insights that you might not know about, especially if you find one that is versed in your specific area.
- They handle the marketing. It can be hard to sell a home without some good marketing. You need eyes on your home in order for people to find it.
- They show your house. There are probably only a handful of people that will buy a house without seeing it. If you need to show you home, then hiring a Realtor is going to be a good choice.
- They handle the paperwork. I hate paperwork, but Realtors handle the dirty stuff. They handle the offers, then pass them to you. They also handle the back and forth negotiations, as well as closings.
Cons of Hiring a Realtor
- They charge a lot! Hiring a real estate agent costs money. They charge a commission that they then split with a buyer’s agent. The typical fee in our area is 6% of the sale price. This can amount to thousands of dollars depending on how much your home is.
- They can be busy. Depending on who you go with, they might be a very active agent. If they have a lot of listings, then they could very busy, which could put you in a line for service. It wouldn’t be good if someone was interested in your home, but their agent couldn’t get in touch with you agent. Just something to think about.
Selling Your Home on Your Own
For sale by owner (FSBO) is becoming a popular trend these days. There are many resources online that will help you list your home and give you sample paperwork to write up contracts. For Sale By Owner is a great website that can help you with listing and selling your home.
If you wanted to go this route, you will need to understand the legality of your contracts and make sure you have access to a lawyer to handle the legally binding paperwork.
Pros of FSBO
- It costs much less! This is a big one. One of the big reasons for people to go FSBO is due to the cost. To save on commission costs, you can just list it yourself. While it will cost you to list your home on MLS and others, this will be much less than with a standard Realtor agreement.
- You own the process. You get to control each and every part of the process. You can choose how you want to list your home, where to list it, and all other aspects.
Cons of FSBO
- You still might pay a commission. There is a general rule that I found out with regards to listing on MLS. If you list on your own, the rule is you still need to pay a commission to the buyer’s agent. The general fee is 2.4% of your sale price. If you went with a regular agent, that 2.4% comes out of the overall fee you are charged. If you don’t put a commission up, many agents won’t show your home.
- You are responsible. Selling a home is not an easy process. If you are the one running the show, then you have to be willing to handle every part of the process. If you don’t do it right, you either will not sell your home, or you will delay the process.
- Your home attachment might stifle you. This is one that is often overlooked. If you are selling on your own, then you might be offended by some of the feedback you receive when showing your home. This can be off putting to potential buyers. Many FSBO homes last longer on the market, because owners are unwilling to lower the price. You could be pricing yourself right out of the market.
There is an alternative to using a real estate agent and selling your home on your own. There are many flat-fee listing companies out there that will list your home on MLS, plus many of the other sites like Zillow. They will also handle the closing and showings. There is one in our area that will handle this for just $1,000. This is becoming a popular option for many home sellers.
One thing that you need to understand is that you should still provide a buyer’s agent commission if you want your home to be shown. I have discussed this with many agents who are also friends.
As I stated, some agents won’t show your home if they aren’t getting a cut of the sale. Think about it. Would you show a home to your buyer if there is one down the street that is offering to pay you?
What We Did
We decided to go with a traditional real estate agent. We interviewed many, along with a few flat-fee companies, and came up with one person. This person just blew our socks off right from the start.
She understands our area, which most we interviewed did not, along with giving us a competitive fee. She was the only one that was willing to negotiate with us on the commission. She is part of a company that has sold the most home in our area for a number of years. She also brought us a potential buyer before we even signed the paperwork.
The main reason we picked a realtor is due to time. My wife and I both work, plus I do a lot on the side. I don’t have time to sell our home on our own. I also don’t have the patience. Trying to sell our home would be too much on my plate if I had to handle it.
So, would you choose a real estate agent or try to sell it on your own? What have you done if you have sold a home?
Photo courtesy of: danielmoyle