Realtor to sell my house:
I’ve been doing closings and real-estate related work for a long time. This is a question that I field, in one way or another, many times per week. I’m not trying to get your commission, so I think I’m best suited to answer this.
Many people see the 6% that Realtors earn off your sale and want to avoid that charge. On a $200,000 house, this could save you $12,000.
Like anything in the world, the answer is : It depends. But, I’ll try to tell you why I think it depends, below.
Consideration #1:
A realtor has access to the Carolina MLS, which is only available as an expensive benefit of being a N.C. Realtor. This is a large program that allows the Realtor to input all of the information about your property and tell the world that you have it listed for sale. It’s by far, the most useful tool you have in trying to market and sell your property. Within minutes of listing a property, 100s of websites online pick the information up and rebroadcast it via their personal website.
If you aren’t using a realtor to do the above referenced marketing, you’re probably limiting your Property to 50% or less of the available buying pool. You MUST have this access. It’s true that you can pay services to do this for you. They charge less than the typical commission earned by a full service realtor. That service should be a necessity, at the very least. You look at paying $500-$1,000 just to list on the MLS, if you avoid full service Realtors.
Consideration #2:
You, as the seller, are responsible for paying the commission of the Realtor (typically). Most buyers in this market are represented by their personal Realtor who has signed an agreement with that Realtor whereby they will earn 3% upon purchasing a home through them. It can be a lot of work, a lot of hours and much drama….for the Realtor to earn that commission.
But, you as the seller, can avoid the 3% listing commission to your own Realtor by using the $1,000 listing service referenced above. However, consider that you probably cannot avoid the 3% purchase commission to the Realtor representing who wants to purchase your home.
How likely do you think it is that a Realtor will show your home if they know you’re unwilling to pay any Realtor, any commission? More than likely, that Realtor won’t even forward your house to their clients for review.
Again, if you try to avoid the commission to be charged by Purchaser, you’re probably losing enough potential buyers that it counteracts any savings that you might discover. So, you’re likely only to avoid the 3% listing commission (less the MLS cost).
Consideration #3:
As shown above, you’re likely only to save 2-2.5% by avoiding your own Realtor. But, without your own Realtor, you have noone to negotiate the purchase of your home. You’re going to find yourself in a high-pressure and drama filled negotiation with the Realtor for the Purchaser. This is a real estate professional (ideally) who knows what is standard in the market and what to ask you for (repair requests, earnest money, due diligence, etc). If they know you are not represented by another Professional, they could use this to abuse you.
If that Realtor slips something into the 13 page offer to purchase, are you going to be able to see that that clause hurts your sale of the house? Do you know what is reasonable and what is not reasonable when you receive the $10,000 repair request that is likely to be forwarded by Purchasers? Do you know how much $$$ should be placed for Due Diligence or Earnest Money? Do you know what ‘Time is of the essence’ means regarding the contract? Do you know when the 14 day automatic extension to close is invoked, and when it is not?
I could continue this paragraph for 3 pages, but the point is that your lack of representation could end up costing you far more than the money you would have saved. An argument could be made that your real estate professional, representing you, will be able to tell you which buyers are serious, which buyers are not, and which you should avoid.
I can’t tell you how many contracts come in through our door that have no chance of approval. The Purchaser has submitted a contract and has a financing type that has no chance of approval on this home, but the seller has no idea because they aren’t represented. Do you want that 3 month delay, before you hire someone to represent you?
Consideration #4:
Something goes wrong. I’d guess that 20% of real estate purchases have a major disagreement about something, anything. It might be about the contract date, a repair request, a deposit: anything. Who do you blame? If you’ve written the contract, you’re to blame. If your real estate professional has done something wrong, you have someone to point your finger at, and say, “Fix it.”
Consideration #5:
This is an undervalued consideration: time. Many think that Realtors are paid too much for what they do. And, in some circumstances, I think that too.
But, in other circumstances, you’ll be very happy that you aren’t the person arguing with the buyer or seller about whether a stain in the carpet needs repaired, or spending hours on the phone coordinating inspections, or appraisals, or loan documents. Most of this can be done by you, to cut out of the Realtor. But, you need to ask yourself how much this is worth to you. You’ll have to figure all of this out while you go. The Realtor knows who to call, who to trust, and how to make your life easier. That should have value to you.
This doesn’t mean to say that you should ALWAYS hire a Realtor. If there is a specific property that you want to purchase, and you only want to purchase that property, AND you’ve already reached terms with the owner, there are far fewer incentives to Realtor representation.
The last question: Can my Attorney do all of this for me?
If you find one that wants to take on the work of 2 Realtors, assume all of the risk and do it all for the cost of a real estate closing, let me know when you find them. I’ve got some work for him/her. I’ve got some options that might be able to save you a few bucks or reduce the commission a bit, but there are rarely ‘free’ shortcuts.
