If you are planning to sell your home, will you be using the services of a real estate agent or will you be going the for sale by owner (FSBO) route? Selling a home has gotten very interesting over the past decade as surging home prices, price wars, and real estate fees have caused many home sellers to take a good, hard look at selling their home themselves.
Well, we’re not about to tell you which home selling method to choose but we will share with you the good, the bad, and the ugly of the home selling process.
Question: Our home’s price has gone way up since we bought our house, why should we pay a 6% commission to a realtor who will take a bigger chunk of my home’s profits?
Answer: Your home’s value is strong and reaping the financial benefits of selling your home should be a priority.
A professional real estate agent has the experience to set your home’s price; provide marketing; screen buyers; negotiate the selling price; work with other realtors, mortgage brokers, and attorneys; arrange home inspection; and make sure that everything related to the home selling process is handled smoothly so that your home closes on time.
Question: The agent’s fee is still too high. I expect my home to sell immediately, therefore won’t only a limited amount of marketing be necessary?
Answer: A realtor’s fee is negotiable. Some agents will accept a lower fee, but keep in mind that as much as half of the fee could be split with another broker. If you are able to get the lower fee, make sure that you still receive the full services promised by your agent.
Question: I’ve decided to go ahead and sell my home myself. What steps should I take to prepare for a sale?
Answer: You’ll want to make sure that your home is ready to be seen. Assuming that all exterior and interior preparations have been made, then preparing a marketing plan is the next step. An FSBO listing with a recognized online site is a popular way to go. You’ll pay a fee to have you home featured on the site and, in some cases, you can pay an extra fee for listing home via MLS in order to extend your marketing base.
A sign on your front lawn, notices in the newspaper, posting your listing on Craigslist, and word of mouth advertising are some other options worth considering.
Finally, you’ll want to make sure that you have reasonable times available to show your home to visitors. Expect to spend plenty of time fielding phone calls, answering questions, having people stop by to see your home and negotiating directly with prospective buyers.
Question: When selling my home via an agent I know that they screen potential buyers. What is involved in the screening process?
Answer: Real estate agents want to make sure that buyers can afford the types of homes they want the agent to show to them. Almost always, agents will ask the buyer about their annual income. Typically, this is a verbal exchange with no proof given. With FSBO you can do the same thing, but you risk wasting precious time showing your home to someone who doesn’t have the resources (or the interest) to buy a home from you.
On the other hand, if someone walks into your home with a qualifying letter from their mortgage broker you can contact the broker directly to verify their eligibility.
Question: What if I change my mind and decide FSBO isn’t right for me?
Answer: That’s easy — you can always choose to list your home with a realtor and forego the FSBO route. Lots of home sellers underestimate the work that goes into the home selling process and abandon FSBO if their home doesn’t sell as quickly as planned.
Another option is to keep your home FSBO but entertain agents who bring to you their customers. You’ll agree to pay them no more than 3% commission while saving time and money by going with a method that straddles your two options.
Going With What Works For You
In summation, selling a home does take a lot of work perhaps much more work than what you had expected. The agent’s fee is negotiable, so finding a happy middle ground could bring a suitable buyer to you without you feeling ripped off and the real estate feeling short changed.
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