by Sally Boone
(Los Angeles, California, USA)
Your home is one of the biggest investments you’ll ever make. So it stands to reason that when you’re selling it, you want to get the highest return possible. There are many things – from major decisions to the littlest things – that can affect the profitability of the sale of your home.
You have certain things you have to consider, including who will be responsible for selling your home for you? Will it be a real estate agent or you? Many homeowners are taking the For Sale By Ownerroute, but for others, it’s a burden that isn’t worth the commission they save.
You need to be willing to take a look at the current housing market to determine if it’s a good time to sell. It may not be, but you may not have a choice depending on the situation you’re in, such as making a move to another community for a new job.
Even in a bad market, there are ways you can increase the value of your home so that you get the most possible money out of the transaction. You’ll be hosting open houses or readying your home for a showing if you have an agent.
And in the end, what will you do to find the new home of your dreams? You’ll want to know how to scout out a home you can move into and get the best mortgage rate for your new purchase.
Once you make the firm decision to sell your home, you want the best price you can get for it, but you’re not sure if you should try using an agent to sell it for you or try to sell it on your own. Here are some advantages and disadvantages of both.
Choosing and Using an Agent
A real estate agent can be an asset to you when selling your home. They take care of all the aspects of selling for you. They deal with and essentially screen the buyers to get you the best possible deal.
They have more connections with other agents who have buyers that are looking for a home. If time is a factor in selling your home, then a real estate agent can handle many tasks that free you up to get ready for your pending move.
They have knowledge of the real estate market and know how to get your home out there through the networks to get more interested buyers. They take the headaches away from you, so you have more time to spend on other things.
Their expertise in the real estate market, however, comes at a price. Their commission can be high, and you may not want to give up a $25,000 piece of your profit pie. Some agents can earn around 3-5%. Some could be more than that, depending on the agent you choose.
However, unless you know how to navigate the For Sale By Ownerprocess, your agent might be able to negotiate a better sale price for your home than you would, which might cover the cost of their commission and allow you to unload some tasks you’d rather not handle.
Don’t choose a real estate agent based on just a recommendation. Many people have friends in the industry, but that doesn’t mean they work hard for you. Sometimes an agency can let you know which of their agents have the best performance rate.
A real estate agent and a Realtor are not the same thing. While both have the responsibility to disclose all of the facts of the process to you, Realtors abide by a Code of Ethics that is unique to them.
Realtors also have access to the Multiple Listing Services (MLS) where they can share listings and access more properties than non-Realtors. You want a Realtor who handles properties of the same value of your house.
Don’t get someone used to selling $100,000 homes if you live in a property valued at 2.5 million. You want someone whose personality meshes well with your own – an agent who will answer questions and take time to explain things properly to you.
If you go the agent route, then you want them to perform as many tasks as possible for their commission, such as arranging inspections, knowing which lenders the buyers can approach for their mortgage, and other specifics. The more they leave up to you, the less their commission should be.
Interview the agents until you find someone you feel will work hard to sell your home and get you a good price for it. You want to know their marketing plans, their time availability for showings, closings, etc.
Find out how good their level of experience is. Have they sold many homes in the last year? Are they just a part-time agent who dabbles in the market from time to time? You want someone dedicated to the industry.
FSBO (For Sale By Owner)
Selling your home without the use of a real estate agent is obviously cheaper because there won’t be any commission to pay. This gives the homeowner more control over the sale. You have to bear in mind that real estate agents want your home to sell so that they get their commission.
This could cause some of them to price the home lower than what it could sell for, just so they ensure their hard work isn’t for nothing. The disadvantage to selling on your own is that your time will be consumed by marketing the house and showing the house to prospective buyers.
Some buyers who might be interested in the house, may not want to deal with you, but would rather go through an agent instead. This could lose an owner a sale. In order to be successful in selling a home on your own, you need to have some knowledge of the necessary contracts that need to be signed by all parties, plus all of the other paperwork like titles and deeds, etc.
There are many real estate lawyers who handle just such tasks for homeowners selling their home by themselves. It’s a small investment, much less than what you’d pay for the commission of a real estate agent, and it takes the worry out of having to shoulder the legal burden on your own.
To decide which option is best for you, you’ll need to figure out how much time you have to devote to the selling process. Many marketing methods are free. If you’re not intimidated by the process, then try to sell it on your own without having to give up a percentage of the selling price to an agent.