Should I Use a Real Estate Agent to Sell My Home?
One of the questions that lots of consumers ask themselves is whether they should use a real estate agent or not. Selling your house can sometimes be a big deal, and many people often view it as giving up a prized possession, especially if they have lived in it for many years and have created many fond memories in it.
However, once the decision has been made to sell, one question many people often struggle with is whether to use a real estate agent or choose to sell privately.
The reason for this indecision is not too difficult to understand. The average real estate agent or Realtor® fees on a property sale is in the 5-6% range. This fee, in addition to others associated with a property sale, can easily amount to a good chunk of the sale price of a property. So it is very understandable when a seller considers doing away with using an agent. But is this really a good idea? The following thoughts attempt to answer this question.
Who is a real estate agent?
A real estate agent is a professional who is licensed to arrange, negotiate, and facilitate real estate transactions between buyers, sellers, and real estate brokers. They will usually have undergone some mandatory education or training, have some level of experience, have a good understanding of the property market.
An agent should be able to properly advise you on how best to go about selling your property, as well as provide you with other useful information and insights into the process.
An agent often acts as a mediator and also assists in the transaction process by detailing the terms of the deal and may also represent a client in settlement of the transaction. When a real estate agent successfully sells a property, they are paid a commission, which is usually a percentage of the sale price.
In order to qualify as a real estate agent, you have to undertake specific pre-license education as well as pass the relevant exams, after which you would then be granted your real estate license in the state where you intend to work. On average, the entire process of becoming a licensed real estate agent or Realtor® can cost anywhere between $600 to $1500, which can include education, training, and licensing fees.
It should be made perfectly clear that there is a real difference between a real estate agent and a Realtor®. The above reference at Maximum Real Estate Exposure goes into an in-depth explanation of why they are not the same. It will be worth your time understanding how they differ.
Advantages of Using a Real Estate Agent to Sell Your House
- Focused on the job
The primary job function of an agent is to facilitate the sale of the properties under his or her portfolio. This is, therefore, their primary job function. They will usually approach the task with a specific focus and single-mindedness that someone else whose primary job function is not selling properties would not.
Additionally, a real estate agent does not have any emotional attachment to the property being sold, unlike the owner, and therefore, will be able to make decisions that are considered to be in the best interest of the deal at hand, as opposed to being guided or influenced by any emotional attachment to the property or other similar considerations. Your real estate should have a measured factual basis for the advice they give you. Not what you want to hear!
Real estate agents are usually always available as it is part of their job to be able to conduct property viewings, answer questions that potential buyers might have, among other tasks. An agent will also go the extra mile to try and get the property sold as quickly as possible, as very often, the bulk of their income will usually come from the commission from selling a property.
According to Maximum Real Estate Exposure, the average commission rate for a Realtor in many areas is 5 to 6%, which is calculated on the buying or selling price of the property. It should be noted that commissions are negotiable. Different companies can and do have differing fee structures. The state you live in could also play a role in this expense.
- Large networks
Real estate agents usually network with people in their industry on a regular basis. This enables them to reach a broader target market and get their message across to people looking for property to buy. This can substantially facilitate your real estate needs and ensure that your property is off the market at a faster rate than it otherwise might have been on the market for.
Unfortunately, without the backing of a real estate agent in your corner, it is much harder to get the word out on your own. This is one of the many reasons for sale by owners fail and end up hiring an agent to get the job done.
- Qualifying buyers
Real estate agents can easily sift out unserious buyers which will save you time and money in the long run. Estate agents can conduct the necessary background and other checks to see whether interested buyers might potentially be able to qualify for a mortgage. Once they’ve established this, they can weave out unqualified buyers and essentially save you time. There is a lot to know about mortgages. An agent who has been in the business for a while can be a valuable asset to make sure everything is being done correctly.
- Price negotiations
When you plan on selling your house, you might have an idea of the price you’d like to get for the property. Real estate agents are often skilled at negotiation and will use this skill to try and get you your desired price for the house. As their commission is based on a percentage of the selling price of your property, they will do all they can to get the maximum they can get for the property.
Cons of using a real estate agent
The incomes of real estate agents are often directly tied to the amount or value of the properties they sell by way of commissions. They, therefore, usually try to negotiate as high a commission rate as possible. The average commission on a property sale is often in the 5 – 6% range. Considering that the property sale price likely will be substantial, this commission figure can amount to a decent sum of money. When you factor in other costs that the seller might incur like taxes and repairs, then that agent’s commission begins to look like a lot.
Another option some folks are looking into is what’s called a flat fee MLS agent. A flat fee broker will just list your home in the MLS and do nothing else. Lots of consumers like this idea, but keep in mind there is a lot more to selling a home than putting it in the multiple listing service. In fact, real estate agents who do this are often called “post and pray.” The cost for this service is typically somewhere around $300-$600. Don’t forget though; you will need to pay the buyer’s agent half a commission. So the savings isn’t what it seems like upfront.
- Sellers’ market
A sellers’ market is described as one whereby the supply of houses for sale is far lower than the demand from buyers, which also means that prices will usually be higher. Therefore, in a sellers’ market, it may be much easier for a homeowner to sell their property by themselves and more so get their desired price for their home, as there is likely to be a high demand for properties.
This then might negate the need to incur the additional fees that would otherwise have been paid to an agent.
- Ease of Listing your home (ForSaleByOwner)
Listing your home has never been easier than in today’s world. At the click of a button, you can post a free advert that can reach thousands of people around the world. With platforms like Craigslist, Zillow, and several others, a property owner can market their own property, while also saving thousands of dollars on commission and marketing costs.
- Interested buyer
If you have an interested buyer, then there may not be any need to use a real estate agent. You won’t need to market your property, pay an agent commission for closing the deal, and several other tasks. You should, however, be sure to consult with a real estate attorney which is a requisite in certain states such as Alabama, Florida, New York, Massachusetts, and several others during real estate closings.
Among other things, lawyers will prepare and review documents related to a real estate transaction such as transfer documents, title deeds, and purchase agreements.
Final Thoughts on Selling Your Home With a Real Estate Agent
So, should you use a real estate agent when selling your house? The answer is that it is totally up to you. The pros and cons of using an agent that has been discussed above were meant to provide you with information that can help you make that decision. You should note that there are perhaps some instances where you will have no choice but to deal with an agent.
However, ‘conventional’ wisdom from certain quarters has it that you are more likely to benefit from having an agent on your side than not having one.
The most important thing you can do in order to make a decision is to educate yourself on the process. If, in the process of doing so, you feel that you can handle the entire process from A – Z by yourself without any external input, then, by all means, feel free to do so. But if you think that it might be too much for you to handle, then that tells you that you should instead involve an agent.
Also, it is advisable to always focus on your net when trying to figure out if you are going to be saving money or not. Quite often, what you think you’ll save doesn’t come anywhere close.
Other Valuable Mass RE News Media
Get more helpful real estate advice in these articles at Massachusetts Real Estate News.
- Moving out of state – long-distance moves are a lot more challenging than when you are staying local. See some excellent tips when you will be relocating across the country. Planning will be an essential task to ensure things go smoothly.
- Best home staging tips – do you want to get your home sold quickly? Homes that look their best will sell for more money than those that don’t. Real Estate agents use the term “pride of ownership.” It will really make a difference when you are selling your place. Follow the home staging advice to sell quicker and for more money.
About the author: The above article on whether to use a real estate agent or not was written by Kanayo Okwuraiwe. Kanayo is a startup founder, an incurable entrepreneur, and a digital marketing professional. He is also the founder of a digital marketing company called Telligent Marketing LLC that provides attorney SEO services to help lawyers grow their law practices.