Hire a Realtor or Sell by Owner – Pros and Cons when Selling Your Home

Family standing in front of home for sale yard signBuying a home is a significant financial decision, one that shouldn’t be taken lightly or based solely on a quick Internet search. The same can be said about selling – that equity you’ve managed to build up in your home over time is a necessary aspect of getting into your next home, and if something goes awry during the selling process, your overall financial picture could look much different than you initially imagined.

While some opt to go it alone when putting their home on the market, others turn to a professional real estate agent to get the job done right, hopefully, the first time. Both methods to selling your home have advantages and disadvantages that should be considered prior to making your next move.

Real Estate Agent Benefits

The most powerful benefit of working with a realtor to sell your home is the experience that person brings to the table. Just like the buying process, selling a home requires countless forms, contracts, reports, and disclosures that safeguard not only you as the seller but the buyer on the other end, too. A seasoned realtor is well-versed in what is required in each sell transaction, and he or she understands the ins and outs of the process from start to finish.

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In addition to bringing experience related to the process of selling a home, good real estate agents also are master negotiators. Remember that equity we just mentioned? Your real estate agent knows that the sale price is just as important as the ease of the process, and they work to ensure you get every dime that’s available. Serious negotiating skills are not in most peoples’ competency set, so handing that necessary aspect of the process to the capable hands of a realtor is often a better choice.

Some REALTOR Caveats

While real estate agents bring plenty of value to the table, working with a professional comes with a cost. As you would with an attorney, an accountant, or a fitness coach, you pay your realtor for the time he or she has put into getting your home into the hands of the next owner. Real estate agents generally charge a commission between 3% and 8% of the price of the home which comes straight out of the seller’s coffers.

When you work with a realtor to sell your home, you also face the reality that you are just one client out of many. Getting timely phone calls or e-mails back may not be the norm, and you may be competing with several other buyers and sellers for that single realtor’s attention. The busier your real estate agent is, the more likely you are to have at least one point of frustration throughout the selling process.

Advantages of Selling Your Home by Owner

Most people are drawn to the do-it-yourself method of selling a home if they are focused solely on the cost of using an agent. A 6% commission on the sale of a $300,000 home is a whopping $18,000 that comes directly from your home equity. Opting to sell your home without the help of a real estate agent means you don’t have this added cost.

Additionally, you are in total control over your time when you choose to go it alone. Instead of waiting on responses from a real estate agent regarding viewings, potential offers, and contract updates, you as the owner have direct access to other realtors and their buyers. This takes away the headache that often comes with having the help of a real estate agent who is inexperienced or has a significant number of clients at all times.

Drawbacks to For Sale by Owner

While the cost savings may be a lure to working without the help of a real estate agent, you stand to lose much more in the long run. If you do not have a handle on the jargon used in the real estate world or lack an understanding of the detailed, often complex contracts and documents needed to make the sale concrete, you may be paying far more to fix issues after the fact than you would have in commissions to an agent.

Similarly, without a strong knowledge of your local housing market and the specifics buyers are after in a new home purchase, you could be setting yourself up for a missed opportunity. The longer your home stays on the market, the more likely you’ll need to adjust your sale price down to entice buyers to bite. A real estate agent knows the fine line between pricing and demand that could make the difference between a quick sale and a house that simply sits on the market without moving.

Working with a real estate agent isn’t for everyone, but the vast majority of home sales go off with fewer hitches when a professional is added to the mix. To save yourself some of the trouble that working with a mediocre real estate agent brings, take the time to do your research. Gather referrals from friends and family, and search their credentials to ensure they have ample experience in your housing market. Taking these steps allows you to reap the benefits of working with an agent, without the unnecessary frustration.

Posted on February 3, 2017 by in Mortgages

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