If you’ve ever sold a house before you know that the myriad of fees, points and commissions charged by the various people involved in your transaction can rack up fast. In some cases, these line items can eat significantly into the final amount you’ll end up pocketing when the sale is said and done.
If you’ve been eyeing the current hot home selling market this season and thinking about ways to trim the administrative fat in your home sale, you aren’t the only one. “For sale by owner” signs have been popping up on properties around the country. But does going into a home sale unrepresented by an agent really save you in the end? We’ll break down the monetary and other costs of trying to go it on your own and explain why, in this case, a penny saved doesn’t always equal a penny earned.
Selling Your House is Complicated
While putting out a for-sale sign might seem like an easy task, the truth is that getting a buyer is just the tip of the iceberg. Selling property has always been a legislative and administrative hassle. Did you make the proper disclosures regarding lead? What about that termite damage you had remediated a few years back. Do you remember to put all the clauses into writing? Online forms can only get you so far and missing an important addendum, disclosure or another requirement can mean the difference between a closed sale and a lawsuit.
Are You an Expert at Negotiating?
Speaking of those termites, a real estate agent is responsible for more than just baking cookies at your open house. A licensed, experienced agent is knowledgeable in the market for your particular area and knows what concessions are commonly granted, and which aren’t. Should you credit your potential buyer for a new roof? What are other sellers doing when it comes to requests for closing fees? Your real estate agent is your primary source for negotiating and advising on responses to demands from the buyer. The wrong move here could cost you thousands of dollars in unneeded fees or credits, or, potentially your sale.
The Cold Hard Numbers
While we’re on the subject of dollars, it may seem reasonable that eliminating an agent reduces your out of pocket expenses but does it really save you money in the long run? As it turns out, having an agent can actually net you more at the end of the day. This is because real estate agents are specialized professionals whose sole job it is to market, advertise and promote your property listing. While they will pocket on average 3.5% of the listing price, this figure is easily made up for by the higher final sales price in most cases. On average, realtor marketed homes sold for at least 8% more nationwide in 2015.
In addition to higher overall offers, homes represented by real estate agent’s sell faster than for sale by owner homes. A whole 30 days faster to be exact. It again comes down to expertise, and also the tools agents have at hand. It can be difficult, and in some cases impossible, for sellers to gain access to the multiple home listing services that buyers and buyer agents use to help search for homes. Since the majority of home purchases today are initiated through internet searches, it makes sense that not being included in the online sources limits your potential pool of buyers. This can end up costing you.
To Wrap Things Up
While we like a good self-motivated homeowner when it comes to basic repairs, maintenance or doing beginning research when looking to buy or sell, the truth is that there’s a reason for the various roles involved in a real estate transaction. You may save a few thousand dollars in fees, but long term value in cold hard cash, plus the value of your time and potential liability in case things go wrong, can all add up in the end. While you may be tempted to jump on the For Sale By Owner bandwagon, try sticking with an agent to see real savings and even gains.