Have you ever cut your own hair? It usually only has two outcomes: either you are pleasantly surprised to find that hair cutting is your life’s calling, or you have to go to a more experienced individual to clean up the mess you’ve created. Selling your home For Sale By Owner produces similar results.
Many FSBO sellers do their research and jump into selling their home themselves with confidence. As they soon find out, however, no two selling experiences are the same, nor do they replicate like the one you saw on YouTube or heard from your aunt, Joan.
If you are in the FSBO boat and working on selling your house, here’s why you should, and should not, switch to a realtor.
Here’s why you should:
Realtors Know Your Market
Your real estate agent is going to know the market well. It’s their job to know the market well! Because they have this understanding of the housing market in your area, they are going to be able to price your home effectively.
To price your home, they’ll complete a comparative marketing analysis (CMA). Basically, they’ll compare your home to all of the similar homes in your area that are either on the market or have sold recently. They’ll look at things like the square footage, how long it has been (or was) on the market, and what it eventually sold for.
- Understanding a CMA
- How To Price Your Home To Sell Quickly (For Top Dollar)
- 17 Tips to Get Your House Ready to Sell
Realtors Understand Marketing Homes
Part of knowing your market means your rockstar realtor also knows how to market to that audience. They’ve been in the business long enough to know where to advertise for your home, so the right audience sees it. Whether they run ads on social media or other spaces, they’ll be able to get the right eyes on it a lot faster than someone who doesn’t do this for a living.
Realtors Have Access to the MLS
Ever looked up a house through an online database? The MLS probably supplies the data. The MLS is the Multiple Listing Service, and it’s the database of homes that other real estate agents in the area subscribe to so they can all share their inventory and know what’s available on the market. Because it is primarily for real estate brokerages, you need to either list with a listing agent or go through an MLS listing service to get your home on the MLS.
Think of the MLS like a specialized Google for homes in your area. If you want people looking for houses like yours to come to you, you've got to have it on the MLS.
Experienced Agents Understand Contracts
Every sale involves contracts. One of the most significant issues that FSBO sellers run into with the law is over a misleading contract. The seller may have said something to imply the condition of the house is different than what is actually the case, and the buyer then takes them to court. When you have an experienced agent draft and review these documents, you can rest assured that there will be minimal surprises at the close of the house.
Another advantage to having a real estate agent for the contracts is for exceptional circumstances. For example, if you want to sell your home via short sale or you’re doing a 1031 exchange, the paperwork process is going to be different than your typical transaction. Your agent will also know what provisions (known as contingencies) to put in the contract and keep track of contract extensions as needed.
- Top 10 Things to Look For When Hiring A Discount Real Estate Agent
- Do You Need a Real Estate Agent?
- Is It Better to Sell Your House FSBO?
Realtors Help You Save Money
Hold the phone. You mean realtors actually help you save more money than if you sell FSBO?
Yes. Yes, they do.
Let’s break it down.
When a seller decides to sell their home FSBO, they are telling the other realtors out there that they are saving between 3% and 4% on the sale of their home. In the agent’s eyes, that’s money that they can use to bargain. Some agents will increase their fee, as they now are drafting the contracts for both parties, not just their client. Other agents will use the 3% to 4% as purchasing power.
They’ll be looking to make a deal not just a sale. If you’re an experienced negotiator, this might not faze you. If you aren’t, however, you could end up paying more than you would have paid a realtor.
- How To Choose A Realtor - The Right Way
- How to Negotiate Realtor Commission Successfully
- Do You Need a Realtor to Buy a Home?
Here's Why You Should Not Switch To A Realtor:
Although selling with a real estate agent is a good idea, there are some circumstances where a FSBO seller should not switch to a realtor.
Depends on the Real Estate Agent
Some realtors are inexperienced or are unmotivated. You should be careful about using a real estate agent who is either. Choosing your real estate agent will determine the experience and price you get from the sale of you home. If you take a chance on an inexperienced agent, for example, you risk them fumbling around to find the right audience and stumbling on the sale.
The good news is they have a more extensive network of agents to call upon in times of need. The bad news is those real estate agents are their competitors and don’t necessarily have their best interest at heart.
If you choose to go with an unmotivated real estate agent (usually a family member or friend), realize that you are going to be driving this sale. It’ll be up to you to make sure to list your home, market it, and hold open houses.
It is also up to you to make sure the contracts are really reflective of the deal you are offering and is correct on timeframes. Because you’ll be doing most of the work anyway, you are better off saving the commission and just going solo.
If You Already Have A Buyer
You probably do not need a real estate agent if you already have a buyer. Your buyer could be a family member or a tenant (especially if they have first right of refusal). You won’t need an agent to market the sale of your home, nor will you need them to list your home on the MLS.
You may still want someone to draft the contracts, however. For the contract portion, you may choose to pay an attorney for a few hours and save the larger commission rate of a typical agent.
If You Are Willing To Do The Leg Work
Convenience is also a strong motivator when sellers choose to work with a real estate agent. Listing and selling your home is a lot of work! If you’ve got the time on your hands to learn and see the house from listing to sale, however, it may be worth it!
Some of the work includes responsibilities already covered by the seller, like prepping the home for sale, but also includes duties such as holding open houses, overseeing the inspection and appraisal, marketing your home, negotiating offers, completing contracts, and working with the buyer’s agent.
There is No Timeframe for the Sale of Your House
If there is no pressing reason why you want to sell your home, you may want to consider sticking to selling FSBO. You may be holding your home on the market just to see if you can get the right price. If so, you should weigh the pros and cons of working with a professional who can get you that price. If you aren’t very motivated to sell your home, working with a realtor may end up being a frustrating experience for you. They will be highly motivated to sell the house as quickly as possible which could end up rushing your decision. Always know your selling time frame and motivation before looking for a real estate agent.
Are you thinking of switching to a realtor? Choose one that gives you a high level of service with a low fee. Choose Clever. Call us today at 1-833-2-CLEVER or fill out our online form to get started.