Wondering whether or not to sell your own home without enlisting a realtor? When it comes time to sell your home, understanding your options is the first step to figuring out whether you should sell your home yourself For Sale by Owner (FSBO)-sytle, use a discount broker (typically 4 – 5 percent of your home’s value), or use a full commission agent (6 – 7 percent of your home’s value). Any of these three methods can work. Deciding whether to sell your own home or hire a realtor usually comes down to your time limitations and how much money you hope to keep when making the decision.
Sell your own home
Why sell your own home? Typically selling your home For Sale by Owner (FSBO)-style without the help of an agent translates to the most money in your pocket, since you won’t be paying any agent fees of commission. What is the downside to FSBO? It does require some time to list your home, create your marketing materials, arrange for showings, and figure out the details of the paperwork. The selling process might seem a little intimidating, but with a little time, you’ll be on your way to selling your home like a pro.
Key findings in a six-year study by Aviv Nevo, a Kellogg School of Management Professor at Northwestern University, disclosed that Realtors® do not offset the cost of their commission, and they do not get sellers a higher price. In fact, agents generally bring a 4- 11 percent listing price decrease, not to mention their 6 percent commission.
If you’re interested in selling your own home but it is something you’ve never done before, or if you would like more information on how the FSBO process works in today’s market, visit ListingDoor.com for more information. ListingDoor offers step by step expert advice on the entire process, including preparation to sell, pricing your home, creating marketing tools, finding a buyer and closing the deal.
Bottom line: if getting and keeping the most money generated from your home’s sale is your first priority, and you’re willing to put in a little work (most home owners say the entire processes, including showings and negotiations, takes about 12 hours), choosing to sell your own home may be your best option.
Sell your home through a discount broker
You might not retain as much money for your home’s sale by using a discount broker, but for some the convenience is well worth the cost. If you know you don’t’ have the 10-12 hours needed for the FSBO process, or don’t want to hassle with the details, a discount broker may work for you. There are two down sides to selling your home using a discount broker, however—even though they discount their commission, the cost is still in the thousands of dollars. Additionally, the number one problem according to the (National Association of Realtors®) is the poor quality of discount brokerage agents.
According to a recent National Real Estate Association Report, “The real estate industry is saddled with a large number of part-time, untrained, unethical, and/or incompetent agents.”
“Becoming a cosmetologist requires an average of a 372 hours. But to become a licensed real estate agent requires an average of only 70 hours with the lowest state requirement being 13 hours.”
The financial incentive of a typically 1 – 2 percent savings is offset by other compromised quality warnings that many discount brokerage firms use cheap generic graphics or no graphics at all to market listings, and they usually put a lock box on your home so there is no personal connection or feedback from the buyer. Plus, typically you’ll will owe a commission to the buyer’s agent.
Bottom line: discount brokerage firms may be a good option to market a listing for people who don’t want to pay a full 6 percent commission, and don’t mind generic marketing material.
Sell Your own home or pay a full commission agent?
Should you sell your own home, or hire a real estate agent to sell it for you? A good agent is experienced and has a strong track record. Unfortunately, there are people who pose as experienced agents who actually don’t have substantial experience or just want to sell a home at any price to get the commission. A good agent can reduce the time it takes to get a listing ready, show your home, and act as a middleman between the home seller and the buyer. If you do decide to use a full commission agent, make sure to ask for references from recent clients. Make sure you ask for the actual cost of the service, not just the commission. A good agent is an option for people who don’t want to hassle with the details of selling their home, but it’s important to remember that most agents are NOT trained in negotiations. They will operate as a middleman but typically you will still need to negotiate the terms of the sale yourself.
Bottom Line: If retaining the most amount of money from your home’s sale is not a priority, but your time is a priority, then you should consider a full commission firm. A full commission firm will ultimately reduce the amount of money you make from the sale.
