In a seller's market it's tempting to sell your home For Sale By Owner (FSBO) but even if you can save a few thousand dollars in commission, it's likely going to cost you money along the way.
We all know a bit about real estate, because whether we rent or own, we all LIVE in real estate! What a lot of people don't realize is how the market changes buying/selling strategies. In a seller's market it's tempting to sell your home For Sale By Owner (FSBO) but even if you can save a few thousand dollars in commission, it's likely going to cost you money along the way. Let me tell you 'bout my best friend (and if you're not singing right now I feel sad for you!)
Realtors have expertise and access to more information for appropriate pricing.
On July 26, I met with my best friend to talk about the possibility of selling her home. For this story, let's call her Janet. Janet has owned her house since 2007 and was basing her home's value on that purchasing experience and what she saw online when house hunting. After going over the improvements she has made over the years and talking marketing options, I headed home to do my homework. Reason #1 Janet is glad she has a Realtor: I worked up a Competitive Market Analysis (CMA) based on recent sales in her area and discovered her home was worth about 13% more than she was wanting to ask for it! That alone will more than cover my commission, the buyer's agent's commission and any repairs Janet may have to do.
There are more moving parts than most people realize
I listed Janet's home on July 28. By July 29 we were in multiple offers and that evening we accepted a good, strong offer. Reason #2 Janet is glad she has a Realtor: good marketing meant only 1 day of showings!
It's a long process
We had many more showing requests after that but we declined them due to being under contract. Reason #3 Janet is glad she has a Realtor: I fielded all those phone calls asking why we were declining showings and took a LOT of headaches off of her.
We got through inspections and negotiated repairs, where Janet was going WAY above and beyond. On August 9, I received a call from the buyers agent that they had decided to back out, with no real reason. Reason #4 Janet is glad she has a Realtor: I had to fight for Janet to receive the earnest money since they were setting her back on the timeline to purchase of her new home and didn't have a valid reason for backing out of the contract. There's $500 Janet would have lost if she didn't have a Realtor.
And a lot of work
That evening I called ALL of the agents who had requested listings while we were under contract to let them know we would be accepting backup offers becasue we were anticipating the original buyers backing out. Reason #5 Janet is glad she has a Realtor: that was a LOT of phone calls!
It was totally worth it, because on August 10 we received the release from contract and the listing went live again. By that evening we had 5 showing requests, 4 of which were direct results of my phone calls. Reason #6 Janet is glad she has a Realtor: she likely would have missed out on those four showings if I hadn't made those calls. Instead, she once again only had one day of showings and we're once again in multiple offers!
And a lot of math
It may seem that paying a Realtor 2-3% (because let's be honest, you're going to be paying a buyer's agent either way) is a big expense, but let's do the math with some nice, round numbers.
$200,000 (what you believe your home to be worth)
* 13% (percentage you're under by because the market is CRAZY!)
$226,000 (listing price)
* 3% (selling agent's commission)
$226,000 (listing price)
- 6,780 (selling agent's commission)
$219,220 (what you actually sold your house for)
But it's worth it
And that's not taking into account the earnest money that would have been lost, the phone calls dealing with the origial buyer's agent and more following up with all those showings that had been declined, and the heaps of paperwork that went along with releasing a contract and, perhaps most of all, having someone who is unbiased to talk things out with. There are lots of jokes in the Real Estate community about how we are 40% sales people and 60% therapists, but it really is important to have that person who can talk pros and cons and help you make a logical, not emotional, decsion.
Especially if you let a Realtor do it for you!
So what are you waiting for? Call a Realtor!