Thinking of Listing Your Home without a Realtor?
By: Kyle Spearin
The time has finally come.
You’ve decided to relocate and put your home up for sale. As you begin this process, one question continues to linger in the back of your mind: “should you sell this house by yourself or hire a realtor?”
Without a doubt, this is the single most important decision you will make at such a pivotal juncture in your life. At a glance, the prospect of selling a house by yourself seems to have many advantages. It could potentially be more economical to list it on your own.
Upon further examination, though, you will find that it’s not that simple.
There are a variety of reasons why 90% of consumers use real estate agents (realtors) to buy and sell their homes. You need to strongly consider weighing the pros and cons of each. In this article, you will see 3 major factors why you should use a realtor.
Before listing your house as a FSBO (For Sale By Owner), you need to keep reading.
You Probably Won’t Save Any Money
Perhaps the single largest objection people have to listing with a realtor is that it hurts their bottom line. Contrary to what you might think, this couldn’t be further from the truth.
Most FSBOs dismiss employing a realtor because they don’t want to pay a commission. Who wouldn’t want to save something like 5% (potential realtor commission) when you could just do it yourself?
If you look deeper, however, you will find that you still have to pay a commission. Even when you sell a house on your own, you will be responsible for paying the buyer’s realtor a commission. This cuts your potential “savings” in half (or close to it). Regardless of whether you have a realtor, you will still have to pay at least one realtor a commission. It’s up to you to decide if it’s worth it to list on your own to keep a few percentage points off the bottom line.
On average, your realtor will actually make you more money than you would theoretically save by selling a house on your own. This might seem counter-intuitive, but the numbers don’t lie.
Based on this statistic, it’s clear that there is a great disparity between selling a home on your own and listing with a realtor. Using the same numbers as mentioned above, you could be leaving tens of thousands of dollars on the table. Let’s say you sold your house on your own for $200,000 and saved $5,000 on a realtor commission–2.5% of the list price because you still have to pay the other realtor. This leaves you with a net profit of up to $195,000 after subtracting the buyer’s realtor commissions.
Now consider if you listed with a realtor and sold your house for $280,000. Even if you paid your realtor and the buyer’s realtor a commission, you would still make significantly more money. If you paid 5% total in commissions or $14,000 (instead of saving 2.5% by not having a realtor), you would still net $266,000.
Most realtors are worth the commission–they won’t save you money in commissions, but they’ll make you significantly more on average!
Another major factor to consider when determining a realtor’s value is marketing. The majority of FSBOs don’t market their houses at all. Those that do prefer to host open houses.
Is it worth having open houses if no one comes?
Typically, FSBOs get a lot less traction at open houses than realtors do. They simply have less of an audience that they can reach out to. Even if you told everyone on your street and listed the house yourself and advertised on sites like Zillow, you still have a far smaller reach than a realtor.
A realtor has limitless marketing tools at their disposal. For one thing, they’re typically backed by a brokerage which have steeper pockets than the average home seller. On top of this, simply using the MLS (Multiple Listing Service) to advertise an open house exposes them to every buyer in the area looking at that price range. Plus, the open house will automatically get listed on Zillow and other home selling sites. The last reason a realtor has the upper-hand in this category is that they’ve probably been in the real estate business longer than you. That means they have far more connections they can draw upon to build hype about their listings.
In most cases, a realtor has greater marketing capabilities and experience. Let them promote the property for you.
Having a Realtor Takes Emotion Out of the Process
As anyone who has ever bought or sold a house knows, this can be an incredibly emotional process. Having a realtor handle the process for you reduces your emotions and makes the process more transactional.
If you were to sell your home, you would need to fulfil the role of the seller’s realtor. This means talking to the buyer’s realtor, negotiating, filling out paperwork, and so on. During any of these components, emotions can get involved. It can be as simple as a request the buyer makes or a counter-offer. With a licensed professional as your intermediary, you won’t say something you regret to the buyer.
In general, selling a house and (presumably) finding another one can be stressful as well. Do you really want to manage this plus deal with the responsibilities associated with selling your own home?
Using a realtor can make the home selling process less stressful and allow you to focus on other facets of your life.
Ultimately, the decision you make can have a significant impact on your financial future and stress levels. For these reasons, you should strongly consider hiring a realtor