If you’ve decided to sell your home and have already approached a few realtors, one thing that might be clear to you by now is that some realtors charge hefty fees. Even if you find an agent charging what’s considered standard fees, you can still expect them to charge you around USD$15,000 to USD$18,000 on a home valued at USD$300,000.
All these expenses associated with working with a realtor should be enough for you to take a step back and carefully put some thought into the process. Do you need a realtor to sell your house? Can’t you just fly solo and keep all that cash? All in all, is investing in a realtor when planning to sell your home worth it?
This article will give you all the information you need to make that decision.
Is There A Legal Requirement For You To Hire A Realtor?
Most people are under the impression that there are legal requirements that oblige them to engage a real estate agent when selling their house. However, in most circumstances, that’s not the case. For instance, in some states, the paperwork associated with completing a home sale can be extremely complicated and it’s simply best that you work with an agent.
If you aren’t sure about the laws that govern your state concerning this, then you should go and check with your state department for more information.
Things To Consider Before Selling Your Own Home
While perfectly legal, you may still need to determine if selling your house by yourself is realistic. Here are some questions you’ll need to ask yourself:
- Are You Ready To Go Through A Relatively Slower Sales Process?
In a ‘For Sale By Owner’ (FSBO), most agents tend to hesitate to recommend potential buyers to make an offer. Keep in mind that they’re there to represent what they consider the best interests of their clients. So, if there isn’t a professional on the other side to negotiate and go through with best practices, they’re typically hesitant. As a result, if there are options on the market that have professional representation, they’re most likely to go with those first.
So, to see if you need an agent, the first question you should be asking yourself is how soon you want to close this sale. If you’re not in a rush, securing a buyer right away won’t be of much concern to you.
2. Can You Avoid An Emotional Sale
You’re attached to your home. You’ve made so many beautiful memories in it, which makes your home even more special. But as someone who’s trying to make a sale, this might work against you. For instance, you might end up overpricing your property and being unnecessarily difficult to negotiate with because you’re looking at your house through an emotional lens.
It can also work against you differently, such as when you’re working under a tight personal deadline and want the house sold by a certain date. You might end up selling low and failing to negotiate in your obvious best interests because of the self-imposed pressure.
Additionally, there is the issue of rejection. Because you’re taking care of the sale alone, you don’t have a buffer between you and the buyer or their agent. You’ll deal with the sting of their comments or rejection firsthand. This scenario, coupled with your emotional attachment to your property, won’t always end well for you.
These are all issues a professional doesn’t have to deal with. They know your deadlines or how important your house is to you, but they also know the fair price for properties like yours because they’ve probably already dealt with multiple houses with similar features or selling points.
So, if you’re still determined to proceed with the sale by yourself, be sure that you’ll assume this level of focus and lack of bias when negotiating with a potential buyer.
3. Are You Ready To Go All In?
For the duration of your home’s sale, are you ready to devote almost all of your time and effort towards making this sale happen? Real estate isn’t a part-time job; that just isn’t how the job is set up. And as long as your house hasn’t found a buyer yet, you’ll enjoy the best results if you’ll be engaged in real estate efforts as your own agent full-time.
Is your 9-5 situation supportive of these demands? You have to know you won’t be too exhausted to start another job as soon as you get home. Do you feel like you will be able to market your home well?
How well can you handle situations where a buyer wants to view your home but you’re out doing the job that pays your bills? With an agent, you get a lockbox on your front door that makes it possible for realtors to show your home to buyers even in your absence. To do it alone, you’re going to need to make sure you have a plan on how to make this possible when you can’t physically be there.
4. Can You Create Maximum Exposure For Your Home?
If you’re going to list your own home, you’ll have to know all the places to list your home online. There are several websites that will help you attain maximum exposure for your home.
In addition to listing your home on platforms dedicated to helping sellers like you, you could also list your home on the Multiple Listing Service (MLS). This is a good move because MLS is searchable nationwide with the ability to zero in on area plus neighborhood.
However, the problem is that even though this is a good approach and could potentially work, it doesn’t always cut it. Realtors, for instance, don’t just rely on these listings. They use their large pool of professional and personal networks to move along the process faster. Do you feel like you’ll be able to create this kind of advantage?
Where a realtor will have special relationships with other agents, clients, etc., what will you leverage to create more demand for your property? Remember that the more demand there is, the more likely you are to sell your home faster and get more money from the sale.
5. Can You Weed Out Unqualified Buyers?
You simply don’t have all the time in the world, so you certainly can’t spend what little you have showing curious neighbors and dreamers around your property with the string of hope that they proceed with a purchase. You have a life outside this temporary real estate commitment, so you want to be able to focus on only the prospects that have the highest potential to buy.
You’ll need to think like a realtor on this endeavor and attempt to execute the job with a realtor’s precision as much as possible. A realtor has the training to help them qualify a prospect before going further. They also ask closing questions to find out if the buyer has already viewed other properties, if they’ve been looking for some time, and what mode of payment they expect to use if they have any specific preferences. They then use this information to ascertain how likely they are to move forward with their intention to buy.
When planning to sell your own house, these are all factors you’ll have to consider. So be sure you can do the prequalifying process on your own and save yourself a lot of time.
6. Will You Be Able To Negotiate Your Home’s Price?
You may feel confident about selling your home because you have some sales experience. While this is good, you’re going to have to be extremely careful because negotiations for a home sale are a different ballgame altogether. If your buyer is coming with an agent, you’re most likely not going to be sufficiently skilled at the negotiation table. After all, they have fine-tuned their skills over time and in negotiations with fellow industry experts. Your inexperience in this field might work against you.
To fare well, you’ll need to know the factors that are driving demand in the local home market to identify the terms that you need to negotiate for the most and those you can let the buyer win on.
7. Are You Fit To Avoid Or Substantially Minimize Your Exposure To Legal Risks?
There is going to be a lot of paperwork involved in a transaction as big as a home sale. Most sellers run the risk of not fully disclosing facts that have the possible effect of materially affecting their home’s desirability or value. Failure to do this might make you liable to negligence, fraud, or breach of contract by the buyer if they find out these facts later on. Keep in mind that what’s considered ‘material’ depends on your state laws.
Your biggest challenge when negotiating with a buyer’s agent is that they probably know the legal considerations to look out for more than you. You might hit a blind spot that may be used against you in the future. Therefore, selling on your own will mean you have to invest time and effort researching all the possible legal challenges you want to hedge against.
At the end of the day, it’s up to you to decide how to go about one of the biggest transactions of your life. While some do save lots of money through the FSBO process, some end up selling low and slow, defeating the whole reason they decided to do it in the first place.
If the market is favorable to the seller—that is, if inventory is low—then you may try your hand at selling on your own, as long as you can meet all the requirements involved. If the market is normal or favorable to the buyer, then it’s going to be hard to clinch that sale, and it might be a better idea to save yourself the headache and potential mistakes and just hire a realtor to do the hard work for you.