This topic has been on my mind a lot lately - the number of homes that are being sold by-owner has DRAMATICALLY increased in the last 18 months. As the market has continued to stay highly competitive and highly in favor of Sellers, the idea of selling one's home without using an agent has become more desirable. This increase is totally normal with every real estate market that is at its peak. And once the market corrects (because it always does), this number will drop again, with most homeowners seeing the need to use an agent to sell their home.
So is selling your home without an agent really THAT big of a deal?
Well, before I answer this question, I want to address something else first. Many people ask where I come up with all of the ideas for my blogs and videos. It's a valid question, and answering this question relates to my original question in this blog. (I'm a painter in my story-telling, if you haven't already learned that about me :)).
When I'm planning out ideas for blog posts and videos, I research ideas from a few different avenues:
1 - I reflect on personal experiences in my career. I keep notes of what current buyers and sellers are dealing with, what questions they're asking, what frustrations have come up... basically, I'm always looking for how to provide value to the largest number of consumers, based on what I'm already experiencing.
2 - I collaborate with my colleagues. All the time. Our brokerage is an incredible environment for building a tight-knit family, where we hold one another accountable, where we push one another to grow, where we share ideas on how to elevate one another and our clients. So I take ideas from what others have shared.
3 - I do online research. I research common phrases, like, "frustrations when selling your home", and I read the top few non-ad articles. I scroll down past the "paid ad"click-here articles, and go to the top ones. Typically, there is something in the article that triggers to the search engine that the article contains information on a commonly searched topic. Which means they're topics that are important to the largest group of people.
So I bring all of that up to share with you some of how I was inspired for the content of this article... I did my online research and I began reading the first article, and BAM. I knew I would write on this topic.
In the article, the writer discussed how they have bought and sold several homes and they felt like they were "spending too much money for something [I] could handle [myself]." Of course this intrigued me, so I kept reading.
In the next paragraph, the writer described the 4 major things that a real estate agent does, and what they're getting paid for:
1 - List your home on the MLS (Multiple Listing Service)
2 - Market your home through flyers, advertisements, and a website.
3 - Facilitate showings of your home and possibly host open house events.
4 - Act as an intermediary when entering negotiations and accompanies you to closing.
I can see why someone would want to sell their home without a realtor, because really, this list is pretty sad. Even for me, a realtor who is so passionate about protecting sellers during the sale of their home... if I believed this is *all* that a real estate agent did, I would FOR SURE save my equity and not pay commission. You feel me on this one?!
After reading this writer's opinion on selling a home without a realtor, I thought it would be great to discuss some of the risks of selling without a realtor, as well as some of the benefits of selling with a realtor, and then let you decide what you think is best. After all, if you're the seller, you deserve to make the choice that you feel is best for you and your home.
The Risk Of Selling Without A Realtor
First and foremost, you risk losing money on your sale. I know, it doesn't seem right! Aren't you avoiding using an agent to save money, ergo retain more equity?
According to the National Association of REALTORS® in 2016, the average FSBO (for-sale-by-owner) price was $185,000, where as the average price for a home represented by an agent was $245,000. In 2017, there is a similar trend: the average FSBO price was $200,000, while the average price for an agent-assisted sale was $265,500. That's a huge difference in profit! Even if you're paying 6% for commission for both sides, in both years, you would have averaged more in selling with an agent.
Next to losing equity, there is a huge legal risk you take when selling without an agent. There are many avenues I can take in discussing the potential legal issues, and how your agent can literally financially protect you, but here's what I'm going to say: unless you do real estate every day, unless you're immersed in the language, the procedures, and the laws every single day, you won't know all of the ways that you MUST protect yourself and avoid being sued.
For me, I equate this to changing windshield wiper blades. I have been taught so many times how to install windshield wiper blades. And every single time, I need to be shown again how to do it, or have something who changes the blades every day (or frequently) to do the job for me. I know this is an oversimplified comparison, and I hope the point resonates with you: I don't fumble my way through installing new wiper blades, at the risk of breaking them and having to buy new ones. I just go to a pro and have them tell me how to do it, but really, I just have them do it for me. Real estate is the same exact principle.
The Benefits Of Selling With A Realtor
I feel like number one is self-explanatory, given the hilarious, yet valid comparison I gave of installing windshield wiper blades. Working with a real estate agent allows you to guarantee you're not fumbling your way through the process.
I've seen this happen about a year ago - where a friend of a friend decided to fumble their way through the process of selling by owner - and they were buying a new home simultaneously. They needed to sell their home and obtain the equity in order to buy their new home. Three months past the original closing date, the buyers on their home had still not performed, and they lost their new home that they were buying. They didn't know what to do with the buyers of their home, and unfortunately, they didn't have an agent to advise them on what to do. Their attorney had given them minimal advise, since he was not involved in the initial process. Don't let yourself get caught in this situation.
In addition to the safety net of advisement, a real estate agent performs 184 tasks throughout the entire process of selling your home. Many of these tasks are things that you may not have the wherewithal to make happen, or they are tasks that you may not be aware of how to complete, or what the benefit is for you. I've included a link here
of the article that lists out the 184 tasks.
If you're curious about selling your home, and if working with a realtor is right for you or not, reach out to me anytime! I'm available to have a conversation and determine what is the best route for you. Call me at 509-844-5843.