Selling Your Home? Look at Your Options
Understanding your home selling option is the first step to figuring out whether you should sell your home yourself, use a discount broker (typically 4–5% of your homes value) or use a full commission agent (6–7% of your homes value) Any of the 3 methods can work. It usually comes down to your time and money when making the decision.
Should you sell your own home?
Why should you sell your own home? It usually comes down to one word-money. Typically selling a home yourself gets you the most money since there is no middleman who needs to make a commission. So, what is the downside? It does require some time to list your home for sale, create your marketing, arrange for showing, and figure out the details of the paperwork. The selling process can be a little intimidating
Following a six-year study, Aviv Nevo, a Kellogg School of Management Professor at Northwestern University, says, “our key finding is that Realtors® do not offset the cost of their commission; they do not get you a higher price.” In fact, agents bring a 4–11% listing price decrease, not to mention, a 6% commission.
If you’re interested in selling your own home, but it is your first time, or if you would like more information, visit ListingDoor.com, there are some great blogs on the topic. The blogs offers step by step expert advice on the entire process, including preparing to sell, pricing your home, creating marketing tools, finding a buyer and closing the deal.
The bottom line: if getting the most money is your first priority and your willing to put in a little work (most owners say the entire processes with showings and negotiating takes about 12 hours) selling your home yourself may be your best options.
You might not get as much money for your home when you use a discount broker, but for some the convenience is well worth the cost. If you know you don’t’ have the 10–12 hours or don’t want to hassle with any details. There are 2 down sides — that even though they discount the commission, the cost is still thousands of dollars. The other is that the #1 problem according to the industry association (National Association of Realtors®) is the poor quality of agents.
“The real estate industry is saddled with a large number of part-time, untrained, unethical, and/or incompetent agents.”
“Becoming a cosmetologist requires an average of a 372 hours. But to become a licensed real estate agent requires an average of only 70 hours with the lowest state requirement being 13 hours.”
A financial incentive is that you typically save 1–2% but beware that many firms use cheap generic graphics or no graphics at all. They usually put a lock box on your home so there is no personal connection or feedback from the buyer. And typically you will owe a commission to the buyer’s agent.
The bottom line: Discount firms are a good option for people who don’t want to pay a full 6% and don’t mind generic marketing material.
A good agent is typically experienced. Unfortunately, there are people who pose as experienced who don’t have substantial experience or just want to sell a home at any price to get the commission. A good agent can reduce the time it takes to get a listing ready, show your home, and be a middleman between you and the buyer. If you do decide to use a full commission agent, make sure and ask for references from recent clients. Make sure you know the actual cost of the service not just the commission. A good agent is an option for people who don’t want to hassle with the details but remember most agents are NOT trained in negotiations. They will operate as a middleman but typically you will still need to negotiate the terms of the sell.
Bottom Line: If getting the most money is not a priority and your time is a priority, then you should consider a full commission firm. With a full commission firm “it will ultimately reduce the amount of money you make from the sale.”