Previous < Choose a Realtor
The Internet was supposed to usher the death of the Realtor profession. Just as Orbitz did to travel agents, big sites were going to crush the real estate profession and allow sellers to go straight to the buyer on online real estate portals, getting rid of the “middleman”.
Instead, however, “For Sale By Owners” (FSBOs) have declined to an all-time low (8% of sales in 2015) from a high around 14%.
There is only one reason Realtors have thrived into the information age: The value they provide to sellers.
When Selling Yourself Makes Sense
Most of the time, using a Realtor is undoubtedly worth the commission and then some. But there are times it may make sense to go it alone.
You already have a buyer
Of the few FSBO sales in 2015, 36% of sellers personally knew the buyer beforehand (compared to 3% of Realtor® assisted sales). If you own your home, and already have a friend or family member you’ve made an agreement with, you may not need a Realtor®. You can pay a Realtor a dramatically reduced fee just to handle paperwork, or just hire a lawyer.
Most For-Sale-By-Owners (FSBOs) ultimately use a Realtor to sell their home (approximately 70%). There are many reasons for why FSBOs fail to sell themselves, but the biggest headwind for sellers who don’t use Realtors is that most of their buyers are using Realtors. Exposure on the MLS is a critical basic step for sellers.
Your Realtor’s Value
Fewer Surprises. An agent can ensure you know what to expect from buyers and from the market.
Smooth out Problems. It seems like every deal has a new and unique wrinkle. Agents have accumulated valuable experience solving these countless and diverse real estate problems.
Stay Protected. An agent is a licensed expert at the home selling process and lends their expertise to ensure you are protected in the contract.
Negotiate Confidently. Agents have local knowledge about what is expected regarding closing costs, home warranties, title policies, surveys and repairs in order to stay competitive. You may be leaving these on the table if you didn’t know the seller was ready to give it to you if you had asked.
Save Money on Repairs. Some repairs and cosmetic upgrades are worth your money. Others aren’t. An agent can guide you on what upgrades you will get a return on, and which will be a waste of money.
Exposure on the MLS. Approximately 9 in 10 buyers use a buyer’s agent. Offering a buyer’s agent commission, a requirement to get on the MLS, is an expensive but necessary step to ensure you get your home in front of local agents. Don’t exclude 90% of buyers.
Your Realtor’s Cost
The Fort Hood area behaves as a buyer’s market, meaning it is very cheap to buy homes, but very expensive to sell. Most of the closing costs fall on sellers in the area. On top of that are the agent commissions. The seller pays both agent’s commissions, their listing brokerage and the buyer’s brokerage. For me personally, that is usually 6% of the sales price. The graph below depicts approximately what happens to that money.
Next > How to Choose an Agent
