At first glance, sell by owner seems like a great way to save some money on selling your home
because you won't pay a commission to a real estate agent. But before you make your decision,
look closer at sell by owner vs sell with a real estate agent.
The primary reason to consider selling with a real estate agent is that you'll get a much higher
sales price on average, which covers the price of working with an agent. But there are several
other reasons to sell with an agent. Here's a comparison of several aspects of home sales when
considering doing it yourself and working with an agent.
1. Home Sale Price
Although you’ll save some money by selling a home yourself, you’ll also see a lower sale price
on average vs. using a licensed agent. The commission most real estate agents charge is
between 5 and 6 percent. But in comparison,
for sale by owner homes tend to sell for 26
percent less. That means that you’ll more than cover the agent’s commission with a higher sale
price.
Part of the reason for the lower sale price is the lack of negotiation skills the average home
seller has in comparison to an agent. Agents are trained in negotiation and know how to list a
home to gain the greatest value from the sale.
Using an agent also reduces the likelihood that you’ll accept an emotional sale. When you learn
about potential buyers, you might be more likely to accept their offers just because they have a
great story or they tell you how much they like what you’ve done with the home. This leads to
emotional home sales, which often results in a lower sale price.
In contrast, agents do this every day. They know how to avoid these emotional moments and
focus on a safe, fair home sale.
2. Attorney Fees
When you work with a real estate agent, they have contracts that an attorney has reviewed that
are preset and ready to go. That means that you don’t have to worry about drafting these
contracts or having an expert review them.
Agents also know how to add clauses upon a buyer's request or outline limitations that the
seller wants to be included. You'd be surprised how much customization goes into home sale
agreements and how many steps are involved in the process. It's a lot of paperwork and you'll
need to pay an expert for that paperwork regardless of whether that's a real estate agent or an
attorney.
3. Risk
Selling a home on your own without the expertise that a realtor offers could lead to more risk.
More than likely, your buyer will have agent representation. That puts you at a disadvantage if
you don’t have an agent. This lopsided expertise leaves you open to more risk than the buyer,
which is not a situation you want to be in.
The buyer will then have more negotiation power naturally than you do. At a minimum, you
should read up on the real estate selling process carefully so you know what to expect and can
avoid some risks.
4. Showings
Some realtors won't show homes that are for sale by owner. Realtors know that these homes
will be more challenging to negotiate. Plus, if the home sells for less, they get less commission.
Additionally, realtors know that most for-sale-by-owner situations take place because the home
seller already knows their buyer. It's a matter of formality normally and so the realtor doesn't
want to waste time showing the home.
Normally the buying agent’s commission on these home sales is also lower, which makes these
homes less attractive for agents to show.
For sale by owner represents only
8 percent of the entire home sales market. And while these
homes sell faster than agent-listed homes, that’s mainly because the buyer is already lined up in
most situations.
5. Time Investment
Selling a home is a huge time investment. And while you might be ready to take on this
commitment, that doesn’t always mean you should. The cost of paying an agent is often worth
it because you’ll save time, secure a higher sale price and reduce your risk.
Not only is selling a home on your own time-consuming, but it's confusing. You might not know
what to do next throughout the process. Taking photos, writing a description and getting the
house listed on real estate websites are just the beginning. Things get much harder once you
start accepting offers, negotiating and working on contracts.
For an outstanding team to handle your Charleston, South Carolina, home sale,
contact The
Robertson team. We will work with you to secure the best price for your home while handling
all the behind-the-scenes work to reduce your risk when selling your home.
