Traditionally the only way to reliably sell a house was by using realtor / real estate agent. Realtors are generally qualified, licensed professionals with knowledge across the real estate business and of particular local market conditions. Realtors usually offer a network of contacts – mortgage brokers, lawyers, property inspectors etc. These can be useful, but it’s still worth getting alternative quotes to make sure your realtor’s recommendations are competitive.
A good realtor can ease you through the process of moving home, widely regarded as one of life’s most stressful events.
All well and good, you might think, apart from realtor commission charges coming in at around 6% of the transaction value. With houses priced at $100,000’s that works out at a lot of money, maybe $10,000’s.
Choosing a Realtor
With the kind of money available per completed sale it’s little surprise that there’s a lot of realtors out there. Leafing through the weekly listings mags it seems every operator is an award winner / top producer etc! So how do you begin to find the right one? Personal recommendation can count for a lot, but make sure you trust the person making the recommendation. It’s not unknown for realtors to pay for introductions.
Always talk to at least 3 realtors before signing a listing contract. Get their valuations of your property, check how much they’ll charge in commission, and find out what they’ll be doing to sell your home.
Some realtors may give inflated valuations just to get your business, and then after your home fails to sell they suggest a price reduction. Others may come in on the low side, just to secure a quick sale. Guard against these by doing your own research. Have an idea of what you’ll be asking before a realtor sets foot inside your home. Remember, you’re the boss.
Experience is an important factor in selecting a realtor. Even in these days of the Internet personal contacts still go along way in the world of real estate, and contacts are built up over time.
FSBO (For Sale By Owner) has been around a long time, but in the past it’s been a case of sticking up a homemade sign, or placing a few ads in the local press. The realtor’s network provided access to motivated buyers and made FSBO relatively hit and miss with FSBO homes sitting around a long time or failing to make top dollar.
The rise of the Internet has leveled the playing field somewhat. These days it’s easy to get your home up on one or more of the many real estate listings Web sites that are visited by thousands daily.
Make sure you acquaint yourself with the various stages of real estate transactions before you begin, and have a clear idea of how much you’ll market at, and also the lowest figure you’d be willing to accept.
Security is an important consideration whichever route you take to selling. Essentially you are inviting total strangers to come in and wander around your private space. Using a realtor can offer a degree of protection since the realtor will have done some screening of potential buyers. If you do decide to go it alone, there are some simple precautions to safeguard yourself and your property. Only allow viewings by appointment. Screen potential buyers before making an appointment. Get a contact telephone number, find out more about what they’re looking for, if they have a property to sell etc. The genuine enquirer should be able to answer without hesitation. If in doubt, don’t let them in. Arrange for a friend or relative to be there when you give viewings. Make sure easily pocketed valuables are safely locked away out of sight.
If you’re buying it may seem there’s little to lose in using a buyer’s agent, after all the buyer’s agent’s fees are paid by the seller. Beware, however, that the buyer’s agent may steer you towards properties that offer the greatest return for him. He may avoid introducing you to homes listed by discount realtors, and certainly won’t show you FSBOs. If you charge your buyer’s agent with price negotiations remember he’s in the contradictory position of trying to get as low a price as possible for his client (you), but wants to keep the price as high as possible to maximize his commission.
Over to you
The purpose of this article isn’t to tell you to use a realtor, or to go it alone. It is to get you to think about the pros and cons of each route and make a reasoned choice.
If you are a real estate novice, or are pushed for time, engaging a realtor might be a wise move. If you have some real estate knowledge and/or experience, and are able and willing to spend the time needed to make it work then FSBO might be for you.
There’s nothing to stop you trying FSBO. If it works, you’ve saved a sizeable sum. If not, you can always hire a realtor once you’ve tired of trying.