Why Real Estate Agents Aren’t Always Worth It
Although FSBO (for sale by owner) selling options have been available for a long, long time, it’s only recently that it has become an increasingly popular choice for owners who are trying to save money and reduce their fees, due to rising mortgage costs and a stagnant housing market. Many, many real estate agents and realtors do a fantastic job, but many don’t. Some realtors will take your money and set up a three month contract, then sit on the house, enter it into the MLS and fail to do any further marketing. When the housing market becomes saturated with properties, realtors have to do more and more work and juggle more and more clients. Unfortunately, properties that are lower in value tend to fall out of favor for pricier properties and higher commissions, which can mean that they languish on the market for months at a time with little to no marketing efforts. Taking matters into your own hands by listing your property yourself, instead of going through an agent, is one way to not only reduce costs but to also take back some control of the process.
Agents often use their fee to construct a professional image. Fliers, business cards and for sale yard signs all add up to a pretty smart-looking agent. But if there is no substance behind any of their advertising materials – no experience – it’s little more than a pretty picture. It’s very easy to get taken in by a professional image and to think that the better the image, the better the agent, but the opposite can be just as true.
Another sticking point is the amount of commission paid to a realtor once the sale is complete. Although 3% (or a little more or a little less) doesn’t sound like much, when you take into account that 3% of a $300,000 house is $9,000, the fee suddenly seems a little high. Is entering your home onto the MLS and putting a sign up in your yard $9,000? In most cases, no. Unless the agent is regularly pushing your home and marketing it at every opportunity, it seems like a little bit of a stretch for them to be paid such a large commission.
Not only that, but when entering into negotiations with a prospective buyer, there is a lot more leeway for both you and the buyer if you don’t have to pay an agent 3% of the purchase price – serious negotiations usually involve up to 10% of the purchase price, which’ll give both you and the buyer a sweeter deal if you’re not paying the agent. Look at it another way: if you’re making $50,000 a year and have to pay your agent $9,000, it’s little surprise that you’d want to cut out the agent so that you can keep more of the sale. That works out to more than two months’ per year of work, 40 hours per week. If you were to dedicate over 320 hours to selling your home, you’d do it. You’d do it in half of that, without having to pay anyone else.
Selling your home through For Sale No Agent isn’t as scary or as difficult as you might think. Provided that you follow the instructions and act on the advice of your lawyer and/or bank, the sale should go through quickly and smoothly, saving both you and the buyer money – and enabling you to move forwards with the sale as quickly as possible.