You are ready to move and want to sell your home. What are your options? Traditionally, folks either take the For Sale By Owner (FSBO) route, or list with a local real estate agent. (Today, there are even ways to sell your home online with contenders like Zillow, OpenDoor, and HomeGo. We explored these online, ‘instant offer’ avenues in a previous blog post, which you can read here.)
FSBO (pronounced, “fizbo”) is when a homeowner sells their home without the assistance of a real estate agent. The homeowner is solely responsible for the entire selling process, from start to finish. This includes pricing the home, staging the home, marketing the home, negotiating with prospective buyers`, completing paperwork, and closing on the home. In 2017, FSBOs accounted for 7% of home sales.
Some homeowners take the FSBO approach to avoid paying a commission to a real estate agent (usually 5-6% of the home’s sale price) or to attempt to decomplicate the home-selling process by cutting out the middleman. These home sellers fail to realize how much time, effort, and expertise it takes to make the most money off of a home sale, and almost always lose money in the end.
Hiring a local, experienced real estate agent is a great alternative to FSBO. Here are 5 reasons why:
#1 – Agents price homes correctly and negotiate effectively, earning you significantly more money on your home sale.
According to 2018 National Association of REALTORS, the typical FSBO home sold for $200,000 compared to $265,500 for agent-assisted home sales. Take a look at Figure 1:
Let’s say your real estate agent’s commission rate was 6%. Even after paying your agent $15,930.00 in commissions, you still made 33% more than you would have selling your home by yourself. How does this happen? Often, people selling FSBO price their homes incorrectly.
Price Your Home Right (or Risk Its Reputation)
Pricing your home too low or too high can have a detrimental effect on your home sale. If priced too low, it may sell quickly, but you’ll likely undercut your home’s worth. Buyers may also be suspicious about an abnormally low-priced home, and assume there is something wrong with it; that it must need too many repairs; that there are critical, hidden issues lurking in the fine print. Likewise, pricing your home too high can have a negative impact on your home sale. Your high-priced home will likely stay on the market longer, forcing you to drop your price until a buyer bites.
A real estate agent ensures that your home is priced accurately and that you are not dismissed as a ‘Buyer Beware.’ Experienced agents can get you an accurate, yet favorable appraisal on your home. Agents also know all the industry jargon and negotiation tactics, and can best advocate for you and your home. They are able to settle arrangements in your favor, and make it look easy. Take the terror out of pricing your home and haggling with prospective homebuyers by letting the agent do it for you.
#2 – Agents manage communication with all parties involved in your home sale.
Business meetings can be intimidating—especially when it’s just you versus, well, everyone else. Don’t stress! Real estate agents are used to interacting with prospective homebuyers as well as other professionals involved in successful real estate transactions! Your agent will handle the:
- Buyer, who wants the best deal possible
- Buyer’s agent, who solely represents the buyer’s best interests
- Home inspection companies, which work for the buyer and almost always find problems with the house
- Termite company, if there are challenges
- Buyer’s lender, if the structure of the mortgage requires the seller’s participation
- Appraiser, if there is a question of value
- Title company, if there are challenges with Certificates of Occupancy (CO) permits or other permits
- Town or municipality, if you need to get the CO permits
- Buyer’s buyer, in case there are challenges with the house your buyer is selling
#3 – Agents know how to make your home look its best and get it in front of the most qualified buyers.
According to NAR’s 2017 Profile of Home Buyers and Sellers, 95% of buyers searched online to find a home. But writing a post about your home being for sale and sharing it on Facebook just won’t cut it. Your home needs to be seen by motivated, financially qualified buyers, not just your friends and family.
Most real estate agents have access to the Multiple Listing Service (MLS), an online database where agents all over the country list ‘for sale’ properties. They do this so that their peers (often agents representing buyers) can easily see what homes are currently on the market and find the best homes to show to their clients. Having your home included in this database will help it reach interested buyers, ensuring a quick sell!
What is even more important than visibility? Presentation! Experienced agents are experts at staging homes for sale. The goal of staging is to make a home appealing to the highest number of potential buyers, thereby selling a property more swiftly and for more money. With staging, your home’s photos and videos will showcase your home’s best features.
#4 – Agents protect you from bad deals, and help you maintain your position of power when it comes to negotiating with picky buyers.
Real estate agents protect you from scams and the unexpected. In North Carolina, real estate laws protect the buyer, not the seller. It’s the real estate agent’s job to protect the seller, and insulate the seller from losing thousands on a deal falling through.
If you, the seller, have not taken every precaution to get your home inspected and repairs completed, the buyer can and will point out imperfections and demand that the repairs be made before purchase or be deducted from the overall home price.
Your real estate agent will assist you in making sure this does not happen by scheduling inspections and rectifying issues before they are ever seen.
#5 – Agents cover all the little details and expenses related to your home sale so you don’t have to.
Yard signs for Coming Soon, For Sale, Under Contract, and Sold selling statuses; directionals for Open House; professional photographers and videographers to capture pictures and drone video; specially designed flyers to hand out to interested buyers. Legal contracts, experienced attorneys, necessary home warranties and inspections. These details can be expensive and overwhelming when you’re trying to sell your home on your own.
But when you’re working with a seasoned agent, they’ll handle the mundane tasks while you spend your time doing the things you love.
The Bottom Line
The percentage of sellers who have hired real estate agents to sell their homes has increased steadily over the last 20 years. Hiring an agent saves you time, headaches, and money.
Attend Our Free Seller Seminar
At the Marti Hampton Team, we host monthly seminars to educate homeowners on how they can use their home sale to secure their financial future. Sign up to receive a notification when we schedule the next one by clicking here.
If you’re thinking about selling now, I’d love the chance to sit down so I can learn more about you and your needs. Together, we’ll talk about all of your options and what my team can do to make the process of selling your house a stress-free experience. Let’s have coffee.