All real estate agents have heard stories of the FSBO nightmare. Being exhausted, sick of the showings, frustrated because people would make appointments and then not show up, owners hearing them say bad things about the house because they have an emotional attachment. At first, it might seem heartbreaking. Fork over 6% of my home’s sale proceeds to a total stranger? Why use a real estate agent at all?
Well, once you read through the real benefits of hiring an agent you’ll see they’re worth every single penny.
1. Getting into the MLS Is a Goldmine for Sellers
The multi-listing service (MLS) is the holy grail of real estate listings. Once a home is listed in the MLS, it is distributed to dozens of internet sites and into the hands of buyer’s agents and brokers, ensuring that your home receives a regular stream of showings and open houses.
To list a home in the MLS, you must be a licensed agent in the state. As a result, if you list as a for sale by owner, or FSBO, you’ll have to pay a broker a flat charge or commission to gain access. Because you are not utilizing an agent, the cost already depletes your cash flow. Only 89 percent of sellers listed on the MLS and worked with an agent to sell their house, according to the 2019 National Association of Realtors Profile of Home Buyers and Sellers.
2. FSBO Listings aren’t looked at by high-end buyers.
All real estate agents, concur that the number one reason people prefer to sell their house privately is to save money on commission. But there’s a catch: statistics say you won’t.
According to the Profile of Home Buyers and Sellers, the average FSBO home sold for $200,000, compared to $280,000 for agent-assisted home sales.
Those ‘A’ buyers are in town for the weekend to buy a house, or they’re under contract to sell their home and need to find another. They will never buy from a private seller, and those are the highest-paying buyers.
One of our previous clients is attempting a for sale by owner And the main reason they gave was that they were attempting to save money, which is ironic because people who want to buy for sale by owner are usually on a tight budget.
3. Agents are legally obligated to put you first.
A realtor has a fiduciary duty to the customer, and it’s insane not to hire an agent because you always wind up making back the money you thought you’d save.
Simply put, a realtor is required by law to operate in the best interests of a seller. If they don’t, the seller has the option of going to court.
4. The Commission Money You Save Won’t All Go to the Bank
Agents are usually compensated on a split commission basis, which means that the sellers pay the listing agency 5 percent to 7% of the selling price as compensation, and the listing agent halves the money with the buyer’s agent. The commission on a $250,000 home can be as high as $17,500.
But don’t put all that cash in the bank just yet.
According to statistics, the average agent-assisted listing sold for $39,000 more than an FSBO, however FSBOs who want to save money on commission neglect to pay the buyer’s agent.
If you don’t pay a commission to a buyer’s agent, your listing will never be their top priority. The commission profits are usually shared between the listing agent and the buyer’s agent. Offer them half of the commission to attract buyers to your FSBO home.
Overall, on a $200,000 home, which is the typical FSBO sale price, a seller who thinks they can save $12,000 in commission only saves $6,000, or 3%.
5. At the negotiating table, you never want to be an amateur.
In a tight offer negotiation, who would have the upper hand: a licensed, professional, experienced buyer’s agent who has done this dozens upon dozens of times in their career, or a first-time home seller with an emotional relationship to the property? In a gunfight, never bring a fist.
Sellers who do not have a listing agent are at a disadvantage in negotiations. Even in a pleasant, easy-going negotiation, that agent’s primary goal is to get the house for the price the buyers want—he or she has no obligation to the seller.
Plus, that doesn’t account for some unusual offers that can be tough to accept: all-cash bids, home bidding wars, low-balling offers, and so on.
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6. It’s Like Hitting an Exact Bullseye When It Comes to Home Pricing
When they narrow in on an effective price, real estate agents have access to comparable home sales and neighborhood information dating back years. Sellers without access to this pricing information are throwing a dart in the dark, which could make or break a listing.
The worst thing you could do is overprice a home. Overpriced homes are more likely to sit on the market because they don’t show up in potential buyers’ search criteria.
Think a site like Zillow can get all that information for you? Think again. Home value is called a “Zestimate” for a reason—it’s based off of user-inputted data mixed with public information in a Zillow formula.
While no online tool can be as accurate as a realtor who physically evaluates the home, Houston Premium Homes Realty Group offers a Free Instant Home Value Estimator. Our home value estimator uses information from multiple sources to create a real-time home value estimate based on current market trends.
7. Marketing Is a Whole Different Ballgame Than Listing
You won’t sell a home by merely listing it on websites and waiting for offers to come flooding in. They won’t. That’s where marketing comes in.
There’s a difference between marketing a home and selling a home. The way you get top dollar is to market a home, and that’s what our real estate team does.
Marketing is about getting exposure in the best places with the best angles. A real estate agent knows what listings buyers will be attracted to, gets the listing on the best websites, recognizes and highlights a home’s stand-out qualities, positions home showings in the best light, and networks regularly about the house. It’s a consuming process that will evolve according to reception at open houses and reactions from potential buyers.
8. You Want Access to a Realtor’s Buyers List
Many real estate agents work with both buyers and sellers, and so they have access to high-quality home-seekers on the other side of the equation who may be the perfect fit for your home.
A study by the National Association of Realtors shows that 82% of homes are sold via realtor contacts—i.e. prior clients, referrals, friends, and family.
9. There’s Nothing More Frustrating than Endless Paperwork
One glance at the 15-plus-page state contracts, plus their addendums and disclosures, should send more people scrambling to a real estate agent to close on a home. That’s just one technical form sellers have to complete in the process, which are time-consuming and can be confusing.
All this paperwork can add up to mistakes. Mistakes can be costly, not just in terms of dollar value but in the law. With a realtor, any of these types of mistakes pass the repercussions off to the agent, and they won’t sit on sellers’ shoulders.
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10. Selling a Home is a Full-time Job
Selling a home is a full-time job. You have to host open houses, prep for last-minute showings, vet a slew of interested people to find actual potential buyers, complete the seemingly endless paperwork, market a home, and do all the smaller day-to-day tasks that keep your home presentable. It’s exhausting.
For most people, they already have a full-time job. For agents, this is it. You don’t realize how hard it is to sell a house until you try to do it
11. Emotions Don’t Mix with a Business Transaction
Buying and selling a home are next to getting married and having a baby — all the reasoning goes out the window, sometimes, people get very emotional.