Is it a waste of money to pay a realtor to sell your home? Some property owners think so, but the services provided by a quality real estate agent are arguably worth the money. Before you post that “For Sale by Owner” sign, consider what that 6 percent of your sale price could buy.
“The reality is that a professional realtor provides a wealth of knowledge, experience, and marketing capability that a property owner just doesn’t have,” says Jolie Williams, a realtor associate at Coldwell Banker Residential Brokerage – Dallas/Fort Worth.
“When an agent is not involved, there is greater risk that a critical (and costly) step in the legal process of purchase will be missed,” says Glenn S. Phillips, CEO of Lake Homes Realty, a multi-state real estate brokerage. “Does the homeowner understand title insurance, contract details, required federal and state legal disclosures, and the closing process? Can the homeowner provide clear title? Does the homeowner know how to resolve unexpected outstanding liens that may appear prior to closing?”
Granted, people who profit from selling real estate are, of course, going to extol the virtues of what they do for a living. Read below to hear them lay out the case themselves, and if you choose to forego one, you very well might want to hire a real estate lawyer to help you work out the details.
A realtor is well versed on real estate laws. “We are educated on market trends and statistics, legal disclosures, real estate financing, contracts, contingencies, and deadlines,” explains Williams. “The highest offer does not always yield the highest return, and realtors are able to identify the best offer out of a pile.”
“An experienced real estate pro knows the legal paperwork inside and out, and I’ve seen sellers lose out by not using a realtor,” says Brad Pauly of Pauly Presley Realty in Austin.
A realtor performs tedious, time-consuming tasks that sellers do not want (or are not qualified) to do, which include scheduling home inspectors and appraisers, ordering title insurance, and assisting in acquiring documents such as termite bonds, homeowner association account statements, and fire-dues paperwork.
“We perform multiple real estate transactions a year,” says Williams, “and this experience keeps us up-to-date with the market and with the legal aspects of selling a home.”
“When selling a home, a realtor knows who to use for photographs, how to create a brochure, where to print the brochures, how to get a sign installed, how to create a web page, how to advertise the web page online, how to schedule an open house, how to get feedback on showings, how to analyze the market,” says Gary Lucido, president of Lucid Realty in Chicago. “The list of tasks is huge.”
In the age of the online home search, these tasks are important, which is why many realtors have full-time marketing and PR teams on call. “We can suggest stagers, photographers, and fixes that will help the seller get top dollar,” says Bianca Mitchell, a residential realtor with Partners Trust Real Estate in Los Angeles. “Most sellers don’t have the resources, time, money, or background to successfully market their homes to the level that a professional agent can.”
You’ll reach far more buyers with a selling agent than you ever could on your own. “We can post a property on hundreds of websites to reach realtors and buyers,” Williams explains. The agent uses the all-important Multiple Listing Service, or MLS. Without it, “98 percent of current buyers will not see the property,” says Pauly.
And realtors are connected. Mitchell is continually working with house hunters and meeting with brokers who are on the search for inventory. “When you list your home with me, I may already have a buyer in mind for your property and can assist in a quick sale,” she explains. “Most sellers don’t have a network of buyers lined up or the marketing power of a real estate firm.”
“Homeowners rarely have the data to determine a current market value for their home,” says Phillips. “They can see how nearby homes are priced, but those homes may have more or less space, different zoning, or more or fewer bathrooms, which means they’re not true comparables.”
Determining what your home is worth requires more than looking it up online. “Online pricing tools are rarely accurate and can cause sellers to overprice their home,” says Mitchell, who’s been in most of the on-market (and many of the off-market) properties in her market. “Knowing the right price allows for a quicker sale and avoids the need for a price reduction and re-marketing down the line.”
Phillips wants homeowners to understand that they won’t pocket 6 percent by not hiring a selling agent. “Buyers know that for-sale-by-owner sellers are not paying commission,” says Phillips. “Buyers expect to get that amount as a discount off the selling price. In the end, the price gap between buyer and seller is often larger than when an agent is involved because neither party is well equipped to negotiate away that difference.”
Interestingly, Colby Sambrotto, founder of ForSaleByOwner.com, didn’t sidestep a selling agent when selling his own property. “Sambrotto hired a real estate agent to sell his $2 million condo and increased his sales price by 7.5 percent,” says Williams. “Proof right there that hiring a realtor is the best decision.”
I am currently selling my home in Raleigh, NC. We are in a seller's market; however, I am quite upset with the feedback I have received from buyer's agents. (Note-I am the seller so this is not my agent) Time and time again, I hear the location is the issue - not the price - and a few more updates would have been appreciated. I have also heard genuine issues like prefer bathrooms centrally located in house, etc. However, the feedback regarding location bothers me.
If you are a buyer's realtor, would you not know the location of the home? Seems like realtors are not as knowledgeable as they should be about their buyers' needs.
I try to buy a house with cash money ,do the bank say not to my purchase because don't accept cash ? It's legal not acept a government legal note as money?
Hi Tony, It sounds like you have a legal question that would be best answered by a lawyer in our free Q&A forum. Lawyers do not provide advice through our blog, but they do in the forum -- usually within 12 hours. All questions are open to answers for seven days. You can post your questions here when you're ready: http://www.avvo.com/ask-a-lawyer. You can also browse previously asked questions and lawyer answers, or read legal guides that may answer your questions, here: http://www.avvo.com/free-legal-advice. I hope this is helpful!