14/06/2016
Why you Should Always Use a Real Estate Agent to Sell a House
Using a real estate agent can be expensive, and many sellers think selling a house themselves is a great way to save money. A seller may save a commission by selling a house themselves, but trying to sell a house without an agent may actually cost them more money than the commission they saved. People will claim they saved thousands by selling their home without an agent and they even sold it in one day! There is a reason they sold it in one day, they left a lot of money on the table! A great real estate agent could have more than made up for the commission they charged, by pricing a house right and working for the seller’s best interest. While real estate agent’s commissions may seem high to some, it is important to know they are negotiable. Real estate agent’s are able to charge so much, because they provide a great value to homeowners, and usually get them much more money than they could on their own.
Real estate agents are experts in marketing, educated in the sales process and know how to value a home. I explain exactly why real estate agents get paid so much here; they are not paid just for the time they spend selling your house. They are paid for all the licensing courses and continuing education they must take. They are paid for their experience marketing homes and getting the most money possible for a seller.
You may not save as much as you think when you sell a house yourself
When you try to sell a home yourself, it may appear you can save 5, 6 or even 7 percent of the sales price by not paying a commission (all commissions are negotiable). However most buyers work with real estate agents when they are looking for a house. If you are not going to pay the real estate agent representing the buyer a commission, you eliminated most of the buyers in your market. Eliminating most buyers, will definitely decrease your selling price and cost you money. If you do agree to pay a cooperating broker, you are only saving half of a commission. On top of only saving half of a commission, the buyer is represented by a real estate agent and you are not. Who will have the upper hand in negotiations and the selling process? The buyer’s agent will have the best interest of the buyer in mind, not yours. Here is a great article that describes all the costs associated with selling a house.
Real Estate Agent, Structuring Investments
Why you Should Always Use a Real Estate Agent to Sell a House
Using a real estate agent can be expensive, and many sellers think selling a house themselves is a great way to save money. A seller may save a commission by selling a house themselves, but trying to sell a house without an agent may actually cost them more money than the commission they saved. People will claim they saved thousands by selling their home without an agent and they even sold it in one day! There is a reason they sold it in one day, they left a lot of money on the table! A great real estate agent could have more than made up for the commission they charged, by pricing a house right and working for the seller’s best interest. While real estate agent’s commissions may seem high to some, it is important to know they are negotiable. Real estate agent’s are able to charge so much, because they provide a great value to homeowners, and usually get them much more money than they could on their own.
Real estate agents are experts in marketing, educated in the sales process and know how to value a home. I explain exactly why real estate agents get paid so much here; they are not paid just for the time they spend selling your house. They are paid for all the licensing courses and continuing education they must take. They are paid for their experience marketing homes and getting the most money possible for a seller.
Here is a great article with more detailed information on tricks and tips to sell a house for the most money.
You may not save as much as you think when you sell a house yourself
When you try to sell a home yourself, it may appear you can save 5, 6 or even 7 percent of the sales price by not paying a commission (all commissions are negotiable). However most buyers work with real estate agents when they are looking for a house. If you are not going to pay the real estate agent representing the buyer a commission, you eliminated most of the buyers in your market. Eliminating most buyers, will definitely decrease your selling price and cost you money. If you do agree to pay a cooperating broker, you are only saving half of a commission. On top of only saving half of a commission, the buyer is represented by a real estate agent and you are not. Who will have the upper hand in negotiations and the selling process? The buyer’s agent will have the best interest of the buyer in mind, not yours. Here is a great article that describes all the costs associated with selling a house.
Why is it so important to value a home correctly?
If you price a home too low or overprice a home, it can cost you thousands of dollars. When a home first comes on the market, is the best opportunity to sell a house, especially in a seller’s market like we have now. There are buyers waiting for the perfect home to come up for sale, and it is vital that a home is priced right from the beginning. Here is a great statistic for people who try to sell a home themselves versus use a real estate agent;
Why will overpricing a home cost a seller money?
If a home comes up for sale that is overpriced, a buyer may not even look at the home. An overpriced home will then sit on the market for weeks, or maybe even months until the price is lowered. When buyers see a home has been on the market for an extended period, the buyers start to wonder what is wrong with it. Even if the price is lowered to the right value after a few weeks, the home still may not sell for what it would have sold for if it had been valued correctly to begin with. Houses become stigmatized the longer they are on the market. For an investor or a home owner that no longer lives in the home a stigmatized listing is very bad. Every month a home sits vacant, it costs the seller money and if there is a loan on the house it can cost the seller thousands of dollars a month. If a seller would have priced a home correctly to begin with, they would have sold the home quickly and saved thousands of dollars.
How will pricing a home too low cost a seller money?
Pricing a home too low can cost just as much money as overpricing a home. When you under-price a home you will most likely sell it very quickly, but there is a great chance you will sell it for less money than it is worth. It is true that under-pricing a home can stir up a lot of activity and produce many offers. In amultiple offer situation, it is possible to get a contract over asking price. The problem with a low asking price is it attracts buyers who want a great deal like myself. Many times a multiple offer situation will actually scare away some buyers. Some buyers do not want to get into a bidding war, and will not offer on a house that has multiple offers.
If you price a hoe too low and get an offer over asking price, the chances are you could have gotten an even higher offer had you priced the home correctly. Most buyers will base their offer off of the list price and not what the home is actually worth. I hear it all the time from buyers; I offered $10,000 over asking price and still did not get the home! They are basing their offer on the list price, assuming the seller is asking fair market value. The buyers are not basing their offer on what the home may actually be worth. Another downside to an offer well above asking price, is it may give an appraiser a reason to come in at a low value. If an appraisal comes in low, it could cost the seller even more money! By pricing the home right to begin with, you will almost always sell the home for the most money.
Why is valuing a house difficult without a real estate agent?
Valuing a property is the most important aspect of selling a house as I just discussed. I explain how to value a house in this article; it is very difficult to do without a lot of experience and MLS access. Without MLS access it is very hard to get information on recently sold properties. Recently sold properties are the most important piece of information needed to value a home. People have access to active listings through websites like Zillow, but only licensed agents have access to MLS, which lists sold homes. Active listings can give an idea of house values, but you have no idea if houses are overpriced or what price they will actually sell for. Every house is different, because every house has different features and locations. A real estate agent is an expert at determining value based off of these characteristics. It can take years to understand local markets and local markets can change extremely fast. It is very difficult and takes a lot of time for an agent to determine value correctly, it is much more difficult for someone who is not an agent. Here is an article on how hard it is to become a real estate agent if you are interested.
A real estate agent knows how to market a home
There is a definite art to marketing a home correctly. You can’t just stick a home in the MLS and wait for offers to come in, unless you price it too low. A real estate agent knows how to take the best pictures, do virtual tours, create the best brochures, what websites to use, which magazines and newspapers to advertise in and much more. Real estate agents also know people, and have their own list to market the home too. Many times an agent will have buyers waiting for a house just like yours.
A real estate agent knows title companies, lenders and other agents
A real estate agent knows the market and they also know people in the business. They can help a seller find a title company with the lowest fees and best service. They can help the seller find the best contractorif repairs are needed before the listing or after an inspection. Here are a few more things an agent will help a seller with.
Negotiating price
Negotiating inspections
Negotiating appraisals
Negotiate title resolutions
Negotiate multiple offers
Negotiate seller concessions
Negotiate earnest money
Negotiate inclusions and exclusions
Negotiate conditional sale contingencies
Negotiate survey resolutions
Negotiate due diligence resolution
Obtain and review buyer’s qualification letter
Negotiate closing and possession date
Conclusion
It is almost always better to use a real estate agent to sell a home, instead of selling a house yourself. A real estate agent will make you more money on the sale of your home, because of their knowledge and experience. I know many investors who have their real estate license, and they still use another real estate agent to sell their house for them. Those investors know that another agent has the time needed to sell the house and the market expertise. Before you try to sell a house on your own, consider if it is worth the time it will take to understand the process and if you will actually save any money.
