In a “Seller’s Market”, some folks like to consider selling their homes themselves. Before making this decision, it’s important to understand the services a real estate agent provides. It’s so much more than a sign in your yard!
- Realtors Make Sense: Selling a home is one of the biggest financial decisions you’ll make. Your sale may exceed $400,000. If you had a $400,000 income tax or legal situation, I’m confident you would enlist the help of a CPA or an attorney rather than trying to handle it yourself. Your home is no different
- The MLS (Multiple Listing Service) is the first critical benefit: Only licensed real estate agents can place homes on the MLS. This is the magical well that all Buyer Agents use to find homes for their customers. Properties that are For Sale By Owner (FSBO) cannot appear in the MLS. The MLS is also what populates the public-facing sites like Zillow, Trulia and Realtor.com where many buyers start their home search.
When a property is listed in the MLS, Buyer Agents know that the transaction is going to be conducted with other professionals that thoroughly understand the process. Their job is to protect their client’s investment, and most know from experience that FSBO’s are rife with dangerous financial scenarios for buyers.
- The Selling Process: Getting an offer from a buyer is only the start of the home sale process. From this point, you progress through title research and insurance, inspections (including objections and resolutions), appraisals (often requiring negotiations) Earnest Money disputes and more. Each of these areas are “landmines” that can destroy a sale. Your agent knows the ins and outs of each of these steps, how to solve problems and negotiate aggressively on your behalf to insure a smooth process. Your buyer will have an agent negotiating for them, and you need to be equally represented to insure a fair transaction.
- Pricing : A correct sales price is determined by the current market value of the home/location, its features/upgrades and other intangibles. Your buyer’s agent absolutely knows these values. An overpriced home will languish on the market, becoming a “stale” listing that drives off buyers. If you are selling in spring or summer, prices fluctuate rapidly, often on a weekly basis. Your agent watches this diligently and recommends a selling price and sales plan to achieve maximum revenue. Sometimes, just a few thousand dollars can make the difference between a quick offer and a house that sits.
- Marketing:The goal is to get as many people as possible, as soon as possible to make an offer on your home. This can result in “bidding wars” that drive your price up (yay), or buyer concessions that work in your favor (bringing cash to closing to bridge appraisal issues, waiving deficiencies, etc.). Your agent should work with you to stage and organize your home so that the home’s features and architecture are highlighted.
Your agent should create a pre-listing buzz by networking with other agents, letting them know your property is “coming soon” via email blasts, MLS communications, social media and more. You want buyers lined up the day you go on the market. Your agent should also arrange professional photography (not from their cell phone) and write targeted descriptions to guarantee your home makes an amazing first impression on the internet, where 90% of buyers start their home search.
Your agent will also schedule, promote and staff Open Houses that you agree upon. “I don’t want to do an Open House – I don’t want my nosey neighbors in my home!” First, by the time your home is ready to go on the market, you and your agent have already “de-personalized it” and packed up most of your unique items. Second, those nosey neighbors may have friends or family members that want to live in your ‘hood! Neighbors are a great source of qualified buyers.
- Assessing Offers: You could potentially see offers with Conventional, VA, FHA or USDA financing. They may contain escalation clauses, appraisal bridges and more. Your agent knows how each of these will differently impact the sales and closing process, and will work with you to determine the TRUE best offer. Seller agents also review the financial viability of each buyer. They are familiar with a wide variety of lending institutions, their reputations, and which ones do diligent pre-approval. Good agents will call a potential buyer’s lender to determine their financial viability. You don’t want to accept a great offer, only to have the deal fall apart in two weeks because it turns out the buyer really wasn’t qualified for a loan that large.
- Simplicity and Safety: Lots of people will want to see your house. Working with an agent means you don’t have to personally deal with strangers coming into your home. It also means that those who view it are accompanied by licensed agents that are responsible for the safety of your home and possessions. Your agent works with you to develop acceptable showing guidelines. Do you need 2 hours notice or 24? Want folks to take their shoes off? Special instructions about pets? It’s your home. Having an agent lets you control the process and reduce risk.
- The Closing Process: Your agent will be working closely with the title company throughout the selling process. If there are clouds on the title, easements that impact your property or any other matters that could negatively impact your sale, your agent will help to get those cleared. Your agent also works with your buyer’s lender to make sure their loan is progressing and funds will be available on closing day.
- The Money: Your selling agent charges a small commission to handle all of the points listed above (and many more), while greatly reducing your risk. Home sales commissions are split between the selling and buying agent. Should you decide to sell your home yourself, you will absolutely have to pay a commission to the buyer’s agent (unrepresented buyers are extremely rare right now – the market is too competitive). This means you are really just looking at half the commission (or less) to receive all of these selling agent benefits!
Talk to an agent before making the decision to Sell By Owner. Find out how commissions and necessary closing costs will impact your final figures. Many agents will offer a discount on your listing commission if you let them help you with the purchase of your next home. You owe it to yourself to find out more!