If you’re a Kentucky homeowner, no doubt you’ve watched the state’s real estate market reach new peaks in the past few years. It saw a record-breaking 2017 when it came to home sales. 2018 wasn’t far behind and there are strong expectations for 2019, as well.
That has homeowners across the state putting up “for sale” signs hoping to take advantage of Kentucky’s red hot housing climate. Most are going to professional realtors to make sure they get a premium price for their property.
A professional real estate agent knows the local market conditions. They have the expertise to price your home for its optimum value and the resources to then find the right buyer.
But some home sellers are opting to go it alone. There are many reasons sellers choose to put up a home as “for sale by owner” or FSBO. One of the main factors: they don’t want to pay real estate commission fees.
That’s not completely unreasonable. After all, as a home seller, you want to keep as much of the sale price of your home as you can. A realtor’s commission appears to cut into what you pocket after the sale.
However, cutting out the “middleman” isn’t always the best strategy when it comes to buying a house. Yes, you can potentially save money on commission fees, but you could end up losing money if you don’t optimally price your home. To do that effectively, you need to understand the market and have the latest data to make an accurate price assessment.
If you’re thinking of listing your home, here’s what you need to know about how to sell a house by owner in Kentucky.
How Real Estate Agent Commissions work in Kentucky
A home seller typically pays the real estate commission for their listing agent and for the buyer’s agent. The total is generally 6% of the sale price of the home (3% for the listing agent and 3% for the buyer’s agent).
If a homeowner sells a property in Kentucky at the state’s median home value of $145,100, they would typically pay a 6% commission totaling $8,706. This is not always the case, however. Read on to find out how you can work with a flat fee Partner Agent to save thousands of dollars in commission costs.
It’s natural for a homeowner to want to keep that $8,706 by bypassing a real estate agent. But the real number you should worry about is the amount you receive for your property. In most cases, a real estate agent will more than earn the commission fee back by selling the home at its highest possible price. In many cases, this is above the market value of the home.
Taking a closer look at some of the numbers surrounding FSBO, it becomes clearer why this is a risky option. Across the U.S., 36% of sellers attempt FSBO listings every year. But only 11% of homes actually sell without the help of an agent.
A Clever Partner Agent can help a home seller with a wide range of services. They will market your home through various listing services, launch a social media campaign, and negotiate on your behalf. They will also walk you through the entire closing process, including the legal paperwork and government requirements.
A professional real estate agent can also help give you staging ideas, determine what upgrades and repairs will give you the best return for their cost, and help you highlight the best features of your house, townhome, or condo.
Most importantly, they will be able to assess the true value of your home. Their insight into Kentucky neighborhoods will help you price your home so that it sells quickly (often within weeks) and for a premium amount. Multiple studies have shown that sellers who partner with agents get higher offers on average when compared to FSBO-listed homes.
This can be an additional tens-of-thousands of dollars. It’s clear to see that the services and return-on-investment that professional realtors provide far outweigh the commission fee. You can feel confident knowing that you are working alongside a professional who is determined to make the sale fast and for the peak price.
Learn More: Average Real Estate Commission in Kentucky
Four Tips for Selling Your Home Without a Real Estate Agent in Kentucky
Price Your Kentucky Home Competitively
If you want to sell your home quickly and for the right return, then pricing your home with realistic expectations is essential. But how do you determine what the listing price should be?
That requires up-to-date statistics and market trend reports in Kentucky. Kentucky home values have been increasing across the state for several years. The year-over-year change in median home values between 2017 and 2018 was 6.4%. And that growth is expected to continue this year.
But market conditions vary from city to city and even neighborhood to neighborhood. For example, while the statewide median home value in Kentucky is $145,100, it’s $160,000 in Louisville.
It’s even higher in Lexington, where the median home value is $166,000. It’s interesting to note that the median price of homes selling in Kentucky is considerably more than the median home value.
A professional realtor will know how to price your home so that it not only sells quickly but also sells for top price. Recent data from the National Association of Realtors suggests that sellers who work with real estate agents get 33% more (on average) for their homes than those who opt for FSBO.
That means a Louisville homeowner selling a home assessed at the median value of $166,000 could potentially lose $48,000 on the sale.
A good realtor can help you determine what the optimal selling price for your home should be. And in most cases, you can realistically expect your home to sell for near or above the listing price.
Our Partner Agents are professionals who buy and sell homes in Kentucky everyday. They know the local market trends and they can fully take advantage of a seller’s market like the one in Kentucky.
Learn More: How to Sell a House Fast in Kentucky
Stage, Market, and List Your Home to Attract Qualified Buyers
Listing your home FSBO is one thing. But to effectively sell your home and get as much as you can for it, you need to market your home effectively.
One of the best things you can do to sell your home for more is spend money for prime staging. The cost of renting modern or updated furniture and placing updated lighting into a house or condo is minimal for the return.
Effective staging will usually cost less than $2,000, but it can add tens-of-thousands of dollars when it comes to the final sales price. The return-on-investment is definitely worth it.
The same goes with hiring a professional photographer or video person to create an optimal listing. If you put up your home FSBO, you don’t want to skimp corners here.
Creating an effective listing, social media campaigns, and marketing plan is key to attracting qualified buyers.
A professional real estate agent will be able to highlight features in your home and neighborhood that buyers are looking for. They know which schools in your neighborhood attract parents, and they can tell potential buyers what they need to know about the local amenities your community has to offer.
Learn More: How Much Does it Cost to Stage a Home?
Negotiate With Buyers to Get the Best Possible Price
As noted above, it’s not easy determining what your home’s true value is. It’s not uncommon for homes to sell for much more than the market value. That’s why it’s essential that you sharpen your negotiating skills if you opt for FSBO.
In most cases, a buyer will have a seasoned negotiator, a buyer’s agent, working on their side. They make offers and counter offers for a living, so don’t be surprised if you get a lower initial offer than you were expecting.
If you have done your due diligence when it comes to assessing the true value of your home you will know how to respond. If you work with a Partner Agent, they’ll have the latest statistical information and market trend data to help you make a counter offer. Once you and a buyer come to an agreement, they’ll guide you through the paperwork to finalize the agreement.
Understand Kentucky Legal Requirements & Paperwork Involved
When it comes to selling a home, Kentucky’s real estate laws don’t require either a buyer or seller to hire an attorney. But if you opt to go the FSBO route, then it’s in your best interest to hire a lawyer to look over the contract and final transaction.
Local Partner Agents are familiar with Kentucky regulations and requirements for real estate transactions. Their expertise and professional knowledge about what is required to finesse the state’s home sales laws will take the stress off of you.
A professional realtor will also help determine the escrow or title agent during the closing process, and they will guide you through the disclosure process.
This is an essential step for home sellers in Kentucky. State law requires that sellers fill out and provide buyers a disclosure for on any significant defects on the property. You need to understand disclosure requirements thoroughly, otherwise you could jeopardize your sale or even end up in legal peril.
The Pros and Cons of Selling Your Kentucky Home Without a Realtor
As we noted earlier, it’s tempting to sell your home on your own. After all, if you can sell your car, why not a house? There are some significant differences, however. For one, determining home valuation is much more complex than a car. And probably the biggest difference is that your home is usually the most valuable item you own. You don’t want to make a mistake.
Ironically, that’s why some homeowners decide to sell on their own. It gives them the ability to be in full control of the transaction. They may feel the agent will accept an offer that is too low or make concessions that the seller doesn’t like.
But a good real estate agent will never put their client in a situation they do not want to be in. A good realtor always understands his or her client’s needs and will negotiate to ensure the best financial outcome for the seller.
Probably the biggest pro to selling without an agent is that you don’t have to pay a realtor’s fee. But as noted above, a professional real estate agent provides services that are well worth their cost.
One of the cons that FSBO sellers must be aware of is that some buyer’s agents don’t like to show their clients FSBO properties. The reason is that many realtors don’t want to deal with someone who is not a professional and may not fully understand the complexities of selling a home. Some also find FSBO sellers difficult to negotiate with due to the personal attachment to their home.
So, as a FSBO seller, your potential buyer’s pool will be smaller if agents show other listings first. That means less competition for your home and potentially a lower sales price.
Finally, the potential savings of a real estate commission must be compared to the costs. You will have to devote the time to list your property, have professional photos taken, devise a social media campaign, and determine what paperwork and legal requirements are necessary to sell your home in Kentucky.
All this can be taken care of by a professional real estate agent. The upshot: you can sell your home without stress and get more from the sale.
Cost-Saving Alternatives for Kentucky Sellers
All home sellers want to control their costs and get as much for their home as possible. There is an alternative to the FSBO option.
Working with a flat fee Clever Partner Agent can save you thousands of dollars. They charge a flat fee of $3,000 for homes that sell for less than $350,000 and 1% over that. Partner Agents are full service, so you get all of the benefits of a professional realtor at a much lower cost.
They are top-real estate agents from major companies like Keller Williams, Century 21, and RE/MAX. Our Partner Agents will make sure your home sells fast and for its best possible price.