So, you’ve decided to sell your home on your own instead of hiring a qualified professional. Your decision was probably motivated by several compelling reasons:
- First, you don’t want to pay a commission, which is a chunk of change that can look like a huge bite out of the proceeds from the sale of your largest asset.
- Second, you feel like real estate agents get paid for barely doing any work. For example, you may be thinking, “What does an agent do to earn a commission? They show up once for the listing appointment, then they call occasionally to make us scrub the house clean on a 2-hour notice, and then shoo us out of our own house to show it to people we don’t even get to see or vet!” (I nailed this one, haven't I?)
- Third, you may have had a bad experience with an agent in the past, and you no longer trust real estate agents in general, especially when they keep bugging you with their pesky cold calls, sounding like tenacious telemarketers.
So why in the world would you want to hire an agent to sell your home? Here are six reasons why recruiting the help of a professional is in your interest.
1. You Can Actually Net More with an Agent
According to NAR (National Association of Realtors) statistics, agent-assisted listings on average sell for 18% more than FSBOs (for sale by owner, pronounced as ‘fizzbo’). Agents have access to a vast network of other realtors, have the tools (MLS, CRM, developed social media and web presence, YouTube channels, etc.) to gain a wide yet very targeted market exposure, and have a superior knowledge of the market trends and local neighborhood specifics. Speaking of YouTube, check out our own channel.
Also, you may not realize this but by not hiring an agent to sell your home you would be saving only a part of the commission. Almost all buyers are represented by agents, who won’t show your house to their clients if they can’t get a fair compensation for their work. And if you can’t get the traffic to your house, you’ll have a lower potential demand, and as a result a lower price. It’s Econ 101!
Also, as FSBO you’re going to attract bargain hunters with lowball offers going after your commission saving. Makes sense, right?!
2. Marketing Isn’t As Easy As You Think
Do you have a lot of free time? How about extra cash for marketing?
In today’s informed, computer-savvy-homebuyer age, simply putting up a “For Sale” sign in front of your house won’t get you the traffic streaming to your home. As a FSBO seller you would have to spend a lot of money on advertising.
The trouble is that most of your target audience will still be out of reach if your home is not posted on the multiple listing service (MLS), and you’re going to need an agent for that or you’d have to pay an outside agency a flat fee of several hundred dollars to get your home listed.
The MLS provides massive exposure to potential buyers, which explains why more than 80% of buyers find their home through the MLS. Besides the MLS, agents have a number of additional powerful marketing tools for which they pay out of pocket.
3. Hidden Costs Can Add Up
You may not know this but many realtors bear much of the burden of expenses related to getting your home marketed and sold. A list of expenses can include
- professional photography
- membership access to the MLS
- targeted social media campaigns
- web, youtube, and tiktok video posts
- signage and print advertising (not much of a thing anymore)
- and of course, the opportunity cost of the time spent on the long and complex process of selling your home.
We, for example, routinely spend hundreds of dollars to market each of our listings. These expenses come out from the agent’s commission, and sellers with representation are often blissfully unaware of these costs. In fact, agents do all the work and pay marketing costs without getting paid for weeks or months (sometimes never, if there is no closing).
4. Agents Are Better at Pricing
It doesn’t matter how uniquely beautiful your house is (and how much it means to your family). It just won’t sell if you’ve priced it too high. The simple truth is: you just can’t beat the market (ask anyone in finance). Not by much, anyway.
If you overprice your home beyond what the market can bear, you risk letting your house languish on the market for an extended time, making it look stale and undesirable. People will start wondering why the house has been on the market for so long. Also, buyers won’t feel the urgency to put in an offer. And urgency can be a powerful motivator in negotiations.
An accurate pricing strategy isn’t easy. Every house is different, and good pricing requires deep knowledge of factors that affect house values, as well as current market trends, home and community specific features, and the economy overall.
So it helps to have a realtor with a PhD in economics on your side (wink!). By the way, check out our monthly housing market report.
5. Save Yourself from Drowning in the Paperwork
Dealing with the real estate paperwork can be a daunting task, and getting the legal stuff wrong can expose you to potential liability. Closing involves a lot of mandatory disclosures, inspection reports, appraisals, and addenda. Just google “closing paperwork checklist in Florida” to see if you are ready to deal with the paperwork on your own.
6. Showings Can Be Draining
Buyers can’t buy if they can’t see your house, so you would need to make it available often, at various times of the day, and on a short notice. Are you prepared to make quick changes to your schedule or plans? Can you call in sick every time a buyer wants to see your home?
Also consider this, most buyers’ agents as well as buyers themselves are uncomfortable when the owner is present during a showing.
If you’re still unconvinced and want to DIY, at least do it right (read these 7 tips).
A final note: according to this blog on LinkedIn, “91% of FSBO sellers eventually hire an agent, but usually not without first spending considerable time and energy.”