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Getting ready to sell our home in the next couple months as we are about to make a cross country move. Our home is about 7 years old, great condition in a good market -- no reason it won't get offers within days of posting and sell quick.
We have two friends who are agents, but whoever we pick needs to offer the most competitive commission rate. One agent claims to sell for 1%, but need to understand the fine print. I don't think I want to pay more than 3% tops. The other option is I don't use an agent. With my mind pretty occupied with the move (and with the possibility we might want leave town with the house on the marker BUT before it sells), I figured an agent might be the way to go.
What's the time commitment selling a house by yourself (photographing, listing, etc). Is a place like Redfin a good option? I know you'll need a lawyer to draft the closing papers.
I've heard that a house with an agent might sell for a higher price (due to their negotiating experience), but when you factor in commission, it winds up possibly equalling what the house might have sold on its own without a commission.
Thanks in advance for any insight. And, I'm not looking to dismiss the value of a real estate agent. If a agent truly will take 1%, that's probably a decent arrangement given our circumstances. I'm just curious to hear from others who have been through this thought process. Thanks!
Not here to sell you on using a broker.... Just to first correct a few errors and misunderstandings....
Redfin is a brokerage, not just a site to post listings to. Redfin does employ agents who may offer less than other brokerages, for their services...
Even if you list it with a low cost brokerage that will only charge you 1% to list it.... you still should offer something to buyer's agents, unless you will only accept unrepresented buyers, which would really limit your potential buyer pool.
I've been down both paths ... on raw land, developed commercial property, and residential SFH ...
selling FSBO with my own 1-page sales contract or on a standard "fill in the blanks" form (compliant with all the real estate selling requirements/documentation in the state) from the stationary store. Closing set up directly with the Title Company, I paid for the needed surveys ILC documents, specified a "general warranty deed" to minimize those costs, and had an easy, quick, effortless sale process where I got FMV for the transaction without the burden of paying a commission to somebody who wasn't going to get me a higher net sum in hand.
My FSBO buyers were all motivated and financially capable, either having the ability to write a check or arrange for their own financing. If they felt the need to have the contract reviewed by an attorney, they did so at their sole expense. I never had any alterations to one of my sales contracts.
The key here was similar circumstances to yours: a desirable property in a "seller's market" where a simple ad in the local newspaper or "word of mouth" referral brought me a capable qualified buyer within days. We were able to close in less than two weeks.
I would gladly entertain an offer from a buyer with representation on the basis that their agent looked to the buyer for their earned commission. If, as a seller, you look upon the buyer's representation as being paid for "by the buyer" even in a regular listing full commission sale ... then you're on the right track. Indeed, it's the buyer who pays the real estate commissions even though they are deducted from the seller's proceeds. Ask yourself where do the seller's proceeds come from? in light of the fact that without a buyer and their funds, no sale is completed and no commissions paid.
On the other hand ... I've had properties that weren't in such good condition or were in a "buyer's market". Finding that buyer took the marketing exposure/multi-listing of a pro broker who could aggressively seek to sell the property at the best possible advantage for me. In those instances, their earned professional services were the key to getting a deal done. Sometimes they did earn their commission ... and sometimes they didn't; either no buyer was found and no sale transacted, or they "found" a buyer in minutes among their que of investors/buyers looking for what I had to sell.
A "key" aspect of their work was selling me upon a listing price which they knew was within the range of what they had for buyers in-house already. While I accepted such "low-ball" listing contracts a few times just to make a property go away (or from my profound ignorance of the real market at the time), I've also had a number of times where I declined to give the listing to the agent. In one case, a desirable residential property was suggested by the agent to be comparable to a number of local listings at over $150K less than I listed the house for with another agent who had their list of sales comps showing the far higher figure. The house sold within 45 days at $140K over what the first agent had wanted to get the listing ... almost 1/3 less than the FMV of the house.
At this point, motifone ... what have you got to lose by trying the FSBO route? If you have the ability to put the house on the market via routine advertising/social media and the prospect of connecting with a capable qualified buyer at a realistic FMV, why not try it? You'll find FSBO packages at many Title companies to assist you. If you need a survey, that's easy to get.
And so forth ... the details of selling an uncomplicated residential property in a seller's market just aren't the hocus-pocus that so many RE agents would make it out to be. Nor are the horror stories of "so many pitfalls" in the wording of a sales contract; if you have concerns about little details of that nature, a RE attorney at a nominal hourly rate can be asked to review your contract for those concerns so you can make an informed decision about what it is you're selling and under what terms. Even a $400/hour attorney can be $many thousands less than a percent of a residential sales commission.
From my perspective, the biggest potential downside of representing yourself in a residential RE transaction is the ability to distance yourself and be professional in dealing with your buyer. So many RE agents will blow that up into being a huge obstacle to dealing with buyers at arms-length. No doubt there are sellers who are too emotionally invested in a property to show and "sell" it effectively to an "on the fence" buyer who could be induced to make a valid offer under the sales skills of a given agent. Yet the fallacy of such an argument is revealed when that same RE agent is the seller of a property they bought for themselves or to "flip". That's the day when they, too, are the owner/seller. At least in my area of the country, many RE agents/brokers are aggressively seeking those properties which can be bought "back of market"; ie, they go out on listing calls and convince a owner to accept what amounts to a low-ball offer, so the agent buys the property for themselves. The property gets a few upgrades and voila ... it's back on the market for significantly more money, offered by the owner-agent. It's a common enough situation here that it's part of RE practice law that the licensed RE agent disclose that they are the owner-seller of a property upfront.
Good Luck with whatever you decide to do with selling your house.
Sunsprit, thanks for taking the time to give your detailed reply. Lots of great information there to think about. I think your last point about FSBO and not sabotaging your own sale by being too emotionally involved is important, too. Also appreciate the advice of MrRational. I do believe if I was staying in town and didn’t have a cross country move/job search etc going on, I’d be more inclined to do my research and sell the house myself. But if there’s a chance we need to leave town before the sale closes, I’ll need to consider that, too.
I suppose if I use an agent and, after they get their commission, I still get a “higher net sum in hand” compared to the sum I might get selling it on my own, it’d be worth to use an agent in terms of pure numbers. For example, I sell house let’s say with the help of an agent for 700k at 3% so the agent gets $21k.... that leaves me with a net of $679k. Now perhaps if I had sold the house FSBO withot an agent and let’s say because my negotiating skills were lacking I only sold it for $660k. All mine to keep ($660k) but still less than agent was able to net me ($679) after their cut. I’m simplfying the scenario, but does this thinking and numbers make sense?
I do believe if I was staying in town and didn’t have a cross country move/job search etc going on,
I’d be more inclined to do my research and sell the house myself. But if there’s a chance we need
to leave town before the sale closes, I’ll need to consider that, too.
The message is to engage the agent NOW.
Get their input and advise and help and maybe even a sale ASAP.
Quote:
For example, I sell house let’s say with the help of an agent for 700k at 3% so the agent gets $21k....
This first half of the commission is a given. The discussion is about the second half.
Don't get caught up in the math or be pennywise. Focus on the pack and move and moving on.
Sunsprit, thanks for taking the time to give your detailed reply. Lots of great information there to think about. I think your last point about FSBO and not sabotaging your own sale by being too emotionally involved is important, too. Also appreciate the advice of MrRational. I do believe if I was staying in town and didn’t have a cross country move/job search etc going on, I’d be more inclined to do my research and sell the house myself. But if there’s a chance we need to leave town before the sale closes, I’ll need to consider that, too.
I suppose if I use an agent and, after they get their commission, I still get a “higher net sum in hand” compared to the sum I might get selling it on my own, it’d be worth to use an agent in terms of pure numbers. For example, I sell house let’s say with the help of an agent for 700k at 3% so the agent gets $21k.... that leaves me with a net of $679k. Now perhaps if I had sold the house FSBO withot an agent and let’s say because my negotiating skills were lacking I only sold it for $660k. All mine to keep ($660k) but still less than agent was able to net me ($679) after their cut. I’m simplfying the scenario, but does this thinking and numbers make sense?
It makes sense if you have "bought into" that scenario where you believe that a pro agent can, in fact, make the transaction for you at that higher sales price.
The assumption you've made is that you can't ask and get the same sales price that the "pro" negotiates on your (and their ... remember, they have a vested interest in getting the highest sales price possible, too, for a successful sales contract) behalf.
So here's my perspective: if you believe that an agent can get $X's for your house, what prevents you from asking and getting that same $X's sales price? Even if you believe that you'd only get $X minus some nominal amount because you and the buyer are "going to split the difference" of the sales commissions not needed to be paid ... will you net out less than you'd get with an agent representation at the closing table?
IF, indeed, you are talking about netting out $10's of thousands of dollars less by selling the house yourself, then you would definitely be on the right track to turn the transaction over to that pro agent.
But WHAT IF you could pay yourself most, if not all, of those $10's of thousands of dollars? Is that worth your time/effort/energy to pursue? I did not need to leave that money at the closing table where both seller and buyer had an easy time "meeting of their minds" and my time was readily available to complete all the phases of the transaction in a timely manner.
The choice is yours.
If you believe that you cannot get the same sales price (or nearly so) for your property (and have your time available to do the marketing/sales process to completion), then you've made the decision already. Take MrRational's advice and get that property listed ASAP.
Getting ready to sell our home in the next couple months as we are about to make a cross country move. Our home is about 7 years old, great condition in a good market -- no reason it won't get offers within days of posting and sell quick.
We have two friends who are agents, but whoever we pick needs to offer the most competitive commission rate. One agent claims to sell for 1%, but need to understand the fine print. I don't think I want to pay more than 3% tops. The other option is I don't use an agent. With my mind pretty occupied with the move (and with the possibility we might want leave town with the house on the marker BUT before it sells), I figured an agent might be the way to go.
What's the time commitment selling a house by yourself (photographing, listing, etc). Is a place like Redfin a good option? I know you'll need a lawyer to draft the closing papers.
I've heard that a house with an agent might sell for a higher price (due to their negotiating experience), but when you factor in commission, it winds up possibly equalling what the house might have sold on its own without a commission.
Thanks in advance for any insight. And, I'm not looking to dismiss the value of a real estate agent. If a agent truly will take 1%, that's probably a decent arrangement given our circumstances. I'm just curious to hear from others who have been through this thought process. Thanks!
I just sold a home for a very nice price. The home sold in sixty days.
How did that happen? I didn't attempt to do brain surgery on myself. I employed the services of a good real estate agent. She not only assisted in getting us the best price we could for the house, she helped us negotiate a number of provisions in our real estate contract that work to the seller's advantage. I was grateful to have her on my side.
You get what you pay for in life. Nothing more and nothing less.
I just sold a home for a very nice price. The home sold in sixty days.
How did that happen? I didn't attempt to do brain surgery on myself. I employed the services of a good real estate agent. She not only assisted in getting us the best price we could for the house, she helped us negotiate a number of provisions in our real estate contract that work to the seller's advantage. I was grateful to have her on my side.
You get what you pay for in life. Nothing more and nothing less.
Congrats on your satisfaction with a home sale.
Sometimes an agent is worth their "weight in gold".
Sometimes ... not.
RE: "get what you pay for in life" ...
there's thousands of pages of threads on C-D forums which suggest otherwise. For example, a glance at the automotive thread alone would point up other transactions where people without pro training/skills/licenses are able to accomplish a lot of things for themselves. Or threads about home repairs/improvements, or about going into business, or ... well, many other things in life where a person can do quite well for themselves with a little bit of interest/time/basic abilities. Lots of choices to be made, lots of value to be had by doing stuff yourself. Some folk don't require a tailor or seamstress or dressmaker or drapery or upholsterer to do projects for them ... y'know, that's why there's lots of sources for sewing machines, for example. Or places like Home Depot/Menards/Lowes sell the equipment/supplies to paint a house. Or hardware stores sell basic items to "fix" things or build projects yourself. Or numerous suppliers of cookware and cooking appliances ... you don't need to be a trained Cordon Bleu chef or graduate from CIA to create and serve superb elegant meals.
And so forth .... yes, I do know a lot of folk who prefer to pay a "pro" for so many services, and can't sew a button on a shirt, nor paint a wall, nor fix a doorknob, nor change oil in their car, and think that the only way they can get a really good meal is to make reservations at their favorite restaurants .... or pay a real estate agency to write a simple contract and set up a closing ...
it's all a matter of choices and priorities. Sure, some things aren't very practical to do yourself ... major surgery or dentistry comes to mind. Or threading through a legal process where specialized knowledge and procedures aren't very common knowledge outside the profession and not knowing how to do so can have very adverse consequences for you.
The bottom line is if you believe you got fair value for your money, then your perception is all that counts.
Al depends on how "hot" your area is and how do you plan to advertise it if you sell by owner? If it's a hot market and you list it yourself on the MLS then you'll probably get lookers if you know how to price it right using comparables that have sold recently nearby. You also have to have the time to show the home and the patience to deal with people who are not serious buyers that will waste your time!!
If the market is not too hot in your area or if you're looking to sell quickly and need advise on what price to list at, someone to do paperwork and guide you through the process than hire your friend!
When we sold our home two years ago I didn't have time to deal with everything that goes into selling a home. We interviewed a few agents and went with the most knowledgeable person for the job, not based on their commission. Now I'm not saying that money isn't a factor, but we were in a time crunch to move and we didn't need to play around. I'm also not a realtor by trade, so why would I try to act like I am? It's better to have a professional deal with a big financial transaction such as buying and selling a home IMHO! The realtor brought in a stagger, took professional pictures and we had a buyer/contract within a few days. She took care of everything and all I had to do was worry about my new home!
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