Intro:
A skilled real estate agent can help you sell your home faster and for more money than you could on your own. However, the majority of agents charge a commission fee based on the sale price of the home, which can reduce your net proceeds. Technically, you don’t need one, but there is plenty to consider. Especially in today’s hyper-competitive housing market.
Is a Real Estate Agent Required to Sell My Home?
The use of a real estate agent, broker, or realtor is not required by law for home sellers. Depending on the situation, a smart and resourceful seller may be able to do the work of these professionals.
Yet, a for-sale-by-owner (FSBO) transaction necessitates time, knowledge, and trust. If you don’t have all three, hiring a professional who knows the ins and outs of successful listing and selling can help. Let’s take a look at some of the most important factors to consider.
Why is it Advantageous to Work With an Agent?
As determined by the National Association of Realtors most recent Profile of Home Buyers and Sellers, about 90 percent of sellers used an agent, and it’s easy to see why.
According to NAR data, the average home sold with the assistance of a real estate agent in 2021 for $318,000, while homes sold without the assistance of an agent sold for $260,000.
A good agent can assist you in determining your best list price. Furthermore, agents can advise you on whether it is better to start at the top of the market and have some room to negotiate down or to start at a lower price to entice more people to make offers and bid against each other, driving your price up.
Agents are well-versed in all of the disclosures that sellers must make during a real estate transaction. These disclosures are legally required.
Real estate agents can also access the multiple listing service (MLS).
An agent can list your home in your local multiple listing service, which will broadcast it to other websites with large audiences. This increases your chances of receiving the desired offer.
In addition to putting your listing on the MLS, an agent can help you figure out who is a real buyer and who is “just looking” or not serious about making an offer.
You’ll have the help of an expert when negotiating, weighing, and accepting offers. The agent can provide you with professional advice on what to include and leave out of your listing and what types of pictures and videos to take. You’ll have someone dedicated to performing the vast majority of the work involved in marketing and selling your home.
Realtors are also skilled at staging a home for sale, ensuring that your home looks its best to attract more buyers. Keep in mind that if you hire a professional stager, you will have to pay more money to make your home look more appealing.
Your agent will also set up open houses and private showings. The agent will coordinate with all other vendors involved in the selling process. Such as appraisers, home inspectors, title agents, and notaries. Also, he or she is ready to answer your questions and deal with your concerns right away.
A real estate agent can help you get through the mountains of paperwork you need to sell your home.
Agent Disadvantages
The most significant disadvantage of working with a real estate agent is that you will almost always have to pay a commission based on the sale price of your home. This is usually between 4% and 6%, but it can be as low as 1% if you work with a “discount” broker who offers fewer services.
Some agents provide reduced-priced services. They’ll accept a lower commission in exchange for the home seller taking on more of the agent’s responsibilities, such as staging and photography.
You must also sign a listing agreement with the agent in addition to the commission costs. That means you’ll be required to work with this person for a specified period of time unless the agent agrees to let you out of the contract. This is why it’s important you agree with your agent’s approach to marketing, sales, and negotiating strategies.
Choose Which is Best for You
Every situation is unique, and you may still be wondering, “Do I need an agent to sell my house?” If you’re debating whether to hire a real estate agent, consider the following key questions to determine whether you need their services:
Do you have a good idea of how much your house is worth?
A real estate agent will look at similar homes in your area to figure out what price to put on the listing. Though nothing prevents you from doing the same. If you know what other homes like yours have sold for on the market, you’ll have a good starting point for selling your home without an agent.
How much time do you have available?
Selling a home requires a significant amount of effort. Taking professional-quality photos, advertising the property online, screening and welcoming homebuyers for tours are just a few of the many responsibilities you’ll face if you do it yourself. If you have an open calendar and strong marketing skills, you might be able to do the work of a real estate agent.
How comfortable are you with awkward conversations?
A house is a valuable asset, and you may be proud of the work you’ve done on it. But keep in mind that a buyer is looking for a good deal. You may receive an offer that is significantly less than what you believe is fair. You must deal with the back-and-forth of telling a buyer that you will not budge without the assistance of an agent.
Alternatives to Hiring an Agent
Instead of listing your home with a real estate agent, you could list it as “for sale by owner” (FSBO) and sell it yourself.
You can put ads for your property for sale in public places and on websites that help people buy and sell real estate. When a seller uses these platforms instead of a traditional real estate agent, finding a buyer depends a lot on how good the seller is at marketing, how quickly they can respond to interested buyers, and how willing they are to work with buyers whose agents want commissions.
If you go the FSBO route, your home may fail to make an impression on the market due to a lack of marketing skills or an inappropriate pricing strategy. This can reduce your chances of selling fast and for the highest possible price. You may also face some logistical difficulties. The National Association of Realtors says that two of the most common problems for FSBO sellers are not being able to fix up the house and not being able to understand and fill out the paperwork.
Going with a discount broker to save money is another option. Yet most discount brokers will only list your home on the MLS. Some provide additional services à la carte or on an hourly basis. This puts your house in front of a large number of people, but you are left to manage everything else.
A third option is to sell your home to a cash buyer. These services make selling your home quick and easy. All you need to do typically is fill out an online form or make a call, and the cash buyer will provide you with an instant cash offer, but there is a catch.
There is no need to go through the hassle of staging, listing, and hosting open houses, which saves time and money. Cash buyer offers, on the other hand, are always below full market value because they need to buy, repair, and resell the home for a profit. As a result, you will not get top dollar for your home.
How Home Sellers Can Save Money
If you prefer to work with a real estate agent but want to keep costs low, there are still ways to save:
Negotiate the commission with your agent
Try bargaining the commission with your agent ahead of time. Many agents will negotiate commissions, which could save you 1 to 2% on the sale of your home.
If the buyer’s agent is not involved in the deal, other agents will lower their fees.
Don’t overspend on home improvements.
If you’re not careful, it’s easy to overspend on extravagant staging or expensive upgrades that don’t provide a significant enough resale return. Talk to your real estate agent or an appraiser to find out which improvements, if any, could make you money.
The Bottom Line
In conclusion, a real estate agent’s commission fee can eat into the money you make on the sale of your home. Well-prepared sellers can sell their homes without the help of an agent. However, as with many things in life, you get what you pay for.
You must be honest with yourself about whether you have the time and knowledge to price, stage, and market your property. Not only that, but you also need to negotiate with buyers and their agents. This includes knowing what disclosures your state requires. Something you’re unlikely to be an expert in unless you’re an experienced seller.
Finally, it’s understandable that sellers would prefer to avoid paying a commission. A good agent is supposed to raise the sale price to compensate for the commission, so that the seller nets more money from the sale with an agent than if they tried to sell without one.
Regardless of how you decide to sell your current property, you can always choose to buy your next home without using a real estate agent.
