Some homeowners are eager to “save the commission” by trying to sell their homes privately, but selling a home may not be as straightforward as you may think. It’s important to consider the advantages and drawbacks of going it alone, versus working with a professional real estate agent.
To help you make an informed decision, consider the pros and cons of both strategies.
Real estate agents are professionals. A good agent will be plugged into the marketplace and will have connections with other agents to help spread the word and give your home broader exposure. Chances are your agent (or the company he or she works for) also has a website featuring current listings.
Your agent will professionally photograph your home to showcase its best features, and will write a summary for an MLS listing designed to attract potential buyers. He or she also likely has an experienced eye for what sells, and can offer impartial sales advice and ideas on how to make your home more attractive — from worthwhile upgrades to the way it is staged to presentation tips.
Perhaps most important of all, real estate agents have the knowledge and experience to set an appropriate price for a home, which is essential to a fast sale. An overpriced home may languish on the market for weeks or months. The longer it’s up for sale, the less likely it is to attract potential buyers.
Of course, your agent’s services come at a cost. While it may be negotiable, your agent will charge a commission that might be anywhere from 3% to 7% of the sale price.
If your home sells for, say, $350,000, doing the legwork yourself could save you as much as $24,500 plus tax, if you don’t have to pay a top commission. This savings potential is the biggest advantage of a private sale.
If you know you won’t have to pay a commission, you may be willing to accept a lower offer from a potential buyer, which could help your home sell more quickly. In addition, if time permits, you can devote your entire day to showing and promoting your home. No real estate agent could match that level of service.
However, the drawbacks of trying to sell your own home can be significant. You may potentially save on commission, but you will have to pay money up front for advertising. Then there’s the cost in terms of your own time and effort. In addition, unless you know the market in your area well, you might underprice or overprice your home.
Keep in mind that the process of selling a home is a team effort that calls for a range of expertise at different stages: from sales and marketing to home inspection to mortgage financing to finalizing the legal documents. To help put the right team in place before you sell, your mortgage broker can be a great source of professional connections, and can refer you to a real estate agent, lawyer or perhaps a home inspector, as you need them.
© 2010 First National Financial LP.