Selling a house can be a complex process.
A Realtor can help you at every stage, from setting a price to marketing the property to closing the sale. When you try to sell a home yourself, it may appear you can save 5 or 6 percent of the sales price by not paying a commission (all commissions are negotiable). However most buyers work with real estate agents when they are looking for a house. If you are not going to pay the real estate agent representing the buyer a commission, then you eliminated most of the buyers in your market. Eliminating most buyers will definitely decrease your selling price and cost you money. If you do agree to pay a cooperating broker, you are only saving half of a commission. On top of only saving half of a commission, the buyer is represented by a real estate agent and you are not. Who will have the upper hand in negotiations and the selling process? The buyer’s agent will have the best interest of the buyer in mind, not yours.
If you are not going to pay the real estate agent representing the buyer a commission, then you eliminated most of the buyers in your market.
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If you are wondering whether to hire a realtor, you must ask yourself the following questions:
1. Do I know the value of my home in today's market?
2. Will I take charge of sales and marketing responsibilities?
3. Can I bear criticism of my home?
4. Am I willing to screen potential buyers?
5. Am I willing to put myself at risk of being sued?
6. Am I able to negotiate and close the deal?
It may be a difficult reality to face, but for some sellers, the actual value of their home may be less than what they had hoped. Alternatively, someone who has owned their home for many years may be pleasantly surprised at its current value. A licensed real estate agent will take the guesswork out of both scenarios, and present you with an objective, marketable selling price that may hasten your sale. The selling process generally begins with a determination of a reasonable asking price. When a home sits for a long while, buyers start to wonder what is wrong with it. To market a home competitively, sellers should research the final sales price of similar properties in their community. It takes a lot of work to look at this data and figure how to price your home, but it's important in order to ascertain the right value, and eliminate the risk of a pricing surprise when a buyer applies for a home loan. It is best to come out of the gate priced right. Your real estate agent or Realtor can give you up-to-date information on what is happening in your local marketplace, as well as the price, financing, terms and condition of competing properties. These are key factors in marketing your home and selling it at the best price. Often, your agent can recommend repairs or cosmetic work that will significantly enhance the salability of the property.
1. Do I know the value of my home in today's market?
The next step is a marketing plan. Marketing exposes your property to the public as well as to other real estate agents through a Multiple Listing Service, other cooperative marketing networks, open houses for agents, and so on. Can you rush home from work every time someone wants to see your home? Can you excuse yourself from a meeting every time your phone rings with a potential buyer? At the end of a long workday, do you have the energy to take advantage of every possible opportunity to market your home? Are you willing to dedicate every available minute away from your full-time job to your new part-time job of selling your home?
In many markets, a substantial portion of real estate sales are cooperative sales; that is, a real estate agent other than yours brings in the buyer. The Realtor Code of Ethics requires Realtors to use these cooperative relationships when they benefit clients. An agent will also know when, where and how to advertise — which medium, format and frequency will work best for your home and your market. Though advertising can be valuable, the notion that advertising sells real estate is a misconception. National Association of Realtors studies show that 82 percent of real estate sales are the result of agent contacts from previous clients, referrals, friends, family and personal contacts. In addition to that, when a property is marketed with an agent’s help, you do not have to allow strangers into your home. Agents will generally prescreen and accompany qualified prospects through your property.
2. Will I take charge of sales and marketing responsibilities?
There may be many memories linked to yourhome that have little to do with its market value. Most people grow fond of their homes over time, but sellers shouldn’t let that fondness get in the way of a negotiable selling price. It’s always a good idea to have a pair of ‘fresh eyes’ offer their view of your property’s value, especially when the second opinion is coming from a seasoned real estate agent.
3. Can I bear criticism of my home?
You don't want to take your house off the market to negotiate with someone who was never qualified for the home in the first place. Before you sign a contract with a buyer, you must make sure the purchaser will be able to come up with the necessary funds. It's harder to get a mortgage these days because the bar is higher. Applicants need better credit, higher salaries and a bigger money reserve than was necessary just three years ago.
Before accepting an offer, there should be a current pre-approval letter from a reputable lender. The pre-approval letter should show that the buyer spoke to the lender and has been pre-approved for the purchase price of the home
4. Am I willing to screen potential buyers ?
A lot of legal paperwork is involved in a home sale, and it needs to be completed correctly by an expert. One of the most important items is the seller's disclosures. A seller of real estate has an affirmative duty to disclose any fact that materially affects the value or desirability of the property. The seller can be held liable for fraud, negligence or breach of contract if he/she does not disclose properly. The issue of whether a fact is material or not is generally established in the case law of the state in which you live. Your agent will know about disclosure laws. If youfail to disclose a hazard, nuisance or defect and the buyer comes back to youafter they've moved in and found a problem, they could sue you. Agents can make mistakes, too, but they have professional errors-and-omissions insurance to protect themselves and to give the buyer recourse so the buyer may not need to pursue the seller for damages.
5. Am I willing to put myself at risk of being sued ?
Between the initial sales agreement and the closing (or settlement), questions may arise. For example, there are unexpected repairs that require the buyer to obtain financing, or a cloud in the title is discovered. The required paperwork alone is overwhelming for most sellers. Your agent is the best person to objectively help you resolve these issues and move the transaction to closing.Your agent can help you objectively evaluate every buyer’s proposal without compromising your marketing position. This initial agreement is only the beginning of a process of appraisals, inspections and financing — a lot of possible pitfalls. Your agent can help you write a legally binding, win-win agreement that will be more likely to make it through the process.
6. Negotiating and closing
Finally, getting expert assistance must be considered. The scale of your transaction is one of the biggest financial decisions you’ll make. Transactions today usually exceed $300,000. If you had a $300,000 income tax problem, would you attempt to solve it without the help of a CPA? If you had a $300,000 legal question, would you deal with it without the help of an attorney? Considering the relatively small cost of hiring a Realtor and the large potential risk of not hiring one, it’s smart to find a professional to sell your home. Sellers think selling a house themselves is a great way to save money. A seller may save a commission by selling a house themselves, but trying to sell a house without an agent may actually cost them more money than the commission they saved. Real estate agents are experts in marketing, educated in the sales process and know how to value a home. Real estate agents are not paid just for the time they spend selling your house. They are paid for all the licensing courses and continuing education they must take. They are paid for their experiencing marketing homes and getting the most money possible for a seller.Agents can get broader exposure for your property, help you negotiate a better deal, dedicate more time to your sale and help keep your emotions from sabotaging the sale. An agent brings expertise, which few home sellers have, to a complex transaction with many financial and legal pitfalls.