For buyers, the choice is obvious. Almost always, the way the current real estate industry is structured, it makes sense to buy a home with an agent. Whether from a builder or a preowned home, the cost is already budgeted and on the seller.
For sellers the decision can be more complicated, or at least more difficult.
Firstly, the temptation not to use an agent is much greater. As a buyer, the seller is typically paying all the commissions, so that is gravy for them. But now, as the seller, you are paying two agents’ commissions! Your own listing agent, and the buyer’s agent. While there is no fixed commission percentage, that is usually anywhere between 5% to 7% of the sales price of the home – usually $1000s or $10,000s. Many sellers pause when they see this and at least briefly consider their For-Sale-By-Owner (FSBO) options.
When FSBO is a good idea
- You already have a buyer. If you are just trying to sell your home to a friend or relative, you probably don’t need to actually list your home with an agent. You can agree on terms with the buyer, and go to a lawyer’s office to draft the paperwork for a fee. Even then, I would recommend consulting a real estate agent to get a market analysis on your home. It is possible you are letting go of your home for far less than it’s actually worth. Maybe that is okay if you are selling to family or friends, but at a minimum, you should use an agent to educate yourself on the market.
- You aren’t that serious about selling. Maybe you would sell for the right price, but aren’t in a hurry or really need to sell. It probably is not yet worth your (or the agent’s) time to put it on the market. But it might still be a good idea to get in touch with an agent to get a market analysis, and start getting a feel for agents down the road when you really do want to sell, if you haven’t before then.
Reasons to work with a Realtor® to sell your home
- Time. Even if you had the tools, education, experience and skills to sell your home, the time it takes to acquire these traits and put them into practice to sell your home may be worth the commission check by itself.
- Experience. What we as agents do is not rocket science. There are only six classes required in Texas to get your real estate license, and you don’t even need a high school diploma to get there. So, it’s not the case that we are overeducated geniuses who alone are capable of selling your home. But what good agents do have is experience. And the real estate market has a very tall and steep learning curve. Even the smartest people will have to start from scratch when it comes to learning the intricacies of the local market. And you will be amazed at how diverse the problems and pitfalls of home transactions are. An experienced agent will know what to do when the title commitment comes back with an issue, or
- MLS and Advertising. The Multiple Listing Service is how agents advertise your home (and commission) to other agents. Many MLSes and brokerages automatically syndicate their listings to dozens of the listing outlets. All without your having to lift a finger or pay a monthly fee.
- Qualified Buyers. As a listing agent, I am excited when other agents call, wanting to show my home. I am approximately half excited when someone calls off my yard sign or a Zillow ad. Why in the world would that be, especially when I can take those buyers and turn them into clients if the home they are inquiring about doesn’t work out? Tire-kickers or not-yet-serious “buyers” tend to call on yard signs, wander into open houses, and nonchalantly peruse Zillow. Qualified buyers tend to work with real estate agents. Advertising your home, and a commission, to a buyer’s agent is the best way to get it sold.
- Transaction Coordination. Has the buyer’s agent ordered the pest inspection yet? Will we need an amendment to extend the closing? Does title have the contract? Related to the time and experience reasons, having someone working through the important minutiae of getting you to closing is a load off your back.
- Legal Documents. Agents already have all the forms at hand to get the job done, and the experience to wield them to your advantage. Owners out on their own are more susceptible to predatory buyers who may waste your time, take your home off market for a contract that never closes, or needlessly surrender other concessions to the buyer. The Texas Association of Realtor promulgated forms will help protect your interests during the process.
- It’s free if you don’t sell. When an agent lists their home, they are betting on themselves. All of their time, work, and money they sink into your home won’t earn them a dime if it does not sell for a price you are happy with. This means you are your agent’s incentives are aligned. They are motivated to sell your home. And, if the commission is a percentage, the more your home sells for, the more the agent makes. Win-win.
At the end of the day, it is important that your agent provide value commensurate to the cost. A quality agent will do this by helping achieve the marketing principles in PACE, maximizing the value your home sells for while relieving you of the stressful process-oriented details.
Still not sure if an agent is right for you? Interview one or two and let them share their value propositions. There is no commitment, and you can just explore if having an agent on your side is the right fit.
Brian E Adams, REALTOR®, GRI
StarPointe Realty Central Texas LLC
Licensed in the State of Texas