This is a common question for people who would like to save thousands of dollars in real estate sales commissions. The average exclusive rights of sale listing will come at a price of 6 percent of the agreed purchase amount. For a home that sell for $250,000, that adds up to $15,000 in commissions for the listing agent as well as the buyer’s agent.
While this sounds like a lot of money to hang out in commission, you have to appreciate what goes into the marketing of a home sale. Agents routinely dig into their own pockets quite deep in order to market a property. There’s far more to the process then adding the listing to the MLS and putting ads in the paper.
What Real Estate Agents Do for Their Clients and Commissions
Did you know that it take thousands of dollars and scores of formal, state-mandated education hours, in order to get into the real estate business? Just like financial planners and attorneys, real estate brokers and agents are regulated by the state and must adhere to a code of ethics, as well as the law. Though the market dictates their marketing strategy, good agents do a lot of preparatory work to get a home ready to sell. Because these professionals are experienced, they know precisely what features will help to sell a home and which ought to be replaced.
“Some sellers are tempted to try a For Sale by Owner (FSBO) transaction because their local community is in the midst of a sellers’ market and they think they can sell easily without help. Others try the FSBO route because they want to maximize their profits and avoid paying a commission to a Realtor. However, statistics show that selling your home with the assistance of a professional real estate agent will garner you a higher profit, enough to cover the commission as well as put more money in your pocket. According to the National Association of Realtor’s 2013 Profile of Home Buyers and Sellers, the average FSBO sales price was $174,900, while the average price for a home represented by an agent was $215,000, a difference of $40,100.” —Realtor.com
Typically, an agent will put their experience and expertise to work prior to listing a property. Before they even get an exclusive right of sale contract, they’ll put several hours into researching the home, its history, and look into the future for possible developments.
These many hours before, during, and after the acceptance of a purchase contract go into facilitating the transaction into a successful sale. Think about it this way, how much is your time worth and then double down and ask yourself if you would work for the promise of a payday without a guarantee?
Should I Hire a Real Estate Agent or Sell Myself?
Should you still not be convinced, then it’s time to look a bit deeper into a home sale. First and foremost, where would you get the right data to arrive at a reasonable asking price? That information is in the MLS and if you don’t have access to it, you are highly likely to price your home too high or too low. Here are a few other things to consider:
- Contracts are tricky and negotiation is quite perilous when there’s a lot of emotion involved with the process. A professional third party will keep a calm head and get the best deal.
- Real estate agent’s aren’t allowed to lie, but you might be tempted. In practically every home, there’s something which needs attention and, if you don’t disclose it, you’re opening yourself up to a lawsuit.
- An agent or broker will take the time to verify. There’s an old saying in the real estate industry, “buyers are liars” and, a good agent will check with the buyer’s lender to learn how much that person qualifies for in a mortgage loan.
- Buyers do not like going directly through the homeowner because they feel as though they’re not getting a good deal; and, they aren’t getting the full and complete truth about the property.
In addition to these things, a real estate professional will be on-the-spot when needed and will know how to get your home ready for sale, highlighting the best features and setting the right listing price.