Realtors make 5-6% standard commission on home sale transactions. If you sell your home for $300,000 that’s approximately $15,000 to $18,000.
It might sound attractive to sell your home on your own so you can keep this percentage to yourself. Before you make a decision, however, it’s important understand exactly what Realtors do and why there are risks when you go the for sale by owner route.
Let’s explore the benefits of going with a Realtor vs. for sale by owner.
Your home may take significantly longer to sell.
What’s the first reason it’s good idea to go with a Realtor vs. for sale by owner? The probability of selling faster.
Some buyers’ agents will not show a for sale by owner home. This is because they may prefer to avoid the hassle of not having a real estate professional on the other end of the transaction to help move things along.
Having your pool of potential buyers cut because buyers’ agents are reluctant to work with you can make your home take longer to sell than you’re hoping.
Another major factor is that price negotiation takes skill and experience to execute successfully.
If you don’t know how to do a proper Comparative Market Analysis, you could price your home too low or high.
Too low, and potential buyers may get the idea that something is wrong with your property. Too high, and people will pass by your listing in favor of other similar homes with more reasonable pricing.
If you get an offer you’d like to counter, it’s very easy to kill the deal if you don’t know the right amount to propose or how to present the counteroffer to the buyer.
When you sell your home through a Realtor, you automatically solve these problems.
Buyers’ agents will not be afraid to work with you. Then, you will have the widest range of potential buyers available.
When it’s time to negotiate, your Realtor will do that smoothly so your counteroffer is accepted.
Your Realtor will do a Comparative Market Analysis, too. That way, your price is attractive, will closely match the appraisal, and brings you top dollar. Potential buyers will flock to a well-priced home.
Selling your home is a full-time job.
A sellers’ agent performs a multitude of tasks throughout the process of selling your home.
- Staging your home and taking photos
- Marketing your home on the multiple listing service (MLS)
- Answering the phone for every new potential buyer
- Scheduling every requested showing
- Negotiating offers
- Taking care of paperwork for the contract
- Negotiating back and forth about the repairs the buyer requests after viewing the home inspection report
- Staying in contact with the loan officer, home inspection company, appraiser, underwriter, and closing attorney throughout the entire process
If you’re not confident you have the time and energy to put into the above work, you’re definitely better off working with a Realtor.
Real estate is their full-time job, so you have the assurance they have the time to complete everything that must be done to sell your home quickly and efficiently.
You may lose money rather than saving.
Going back to point number one, when you go the for sale by owner route, you don’t necessarily know how to price your home or negotiate, and your pool of potential buyers is lower.
Not only does this increase the amount of time it takes to get an offer, it also increases the likelihood of you making less money than you could with a Realtor.
- It costs money to use the multiple listing service (MLS), a fee you would not have to pay if you worked with a Realtor.
- If you price your home too low and accept an offer, you’ll lose out on profit because other comparable houses sell for more.
- With a home that’s priced too low, buyers may be reluctant to view your property, believing there must be a problem to warrant the discount. This means you could end up lowering your price further in an attempt to draw people in, thinking you priced it too high.
- If you price your home too high, your entire contract could fall through if the appraisal is less than the offer you accepted and the buyers can’t make up the difference in cash.
- If you don’t know how to find out whether your buyer is pre-approved, you could end up accepting a contract with someone who is not going to be approved for a mortgage loan. Then, you have a high risk of their loan application being denied and the closing not going through.
- When the buyers get the home inspection report, they will most likely submit a list of repair requests. Without a Realtor to help guide you, you might accept more of these requests than necessary and spend a lot on the repair work.
A Realtor knows how to list your home at the perfect price and bring you top dollar.
They’ll balance competitiveness with profit margin and make sure your home is likely to appraise for the listing price.
They’ll also be able to screen potential buyers, to make sure you only accept an offer from someone who is serious and qualified.
You’ll be able to work with your Realtor to determine which repair requests to accept, too. If you need to turn any down, they’ll take care of the negotiating for you.
You could expose yourself to potential legal repercussions.
As the seller, you must disclose any known defects or problems about your home.
Legalities such as the above are an imperative part of closing. Without a real estate professional to help, you may miss something crucial on the paperwork.
Rather than finding out you made a mistake when it’s too late and you’ve been sued, you can work with a Realtor. That way, you have a real estate expert to double check the paperwork before closing.
Even if the Realtor makes a rare mistake, they have errors and omissions insurance. That way, in the event of an error, the buyer won’t have to pursue you for reimbursement.