At first thought, selling your house by yourself on the open market without the assistance or the cost of an Agency representing you, might seem tempting. After all, how much work could it possibly be to sell a house anyway? You just plunk a sign out in the yard, run a couple newspaper ads, park yourself in the rocker on the front porch for a while and wait for the buyers to start showing up, literally at your doorstep.
I’ll admit that perhaps that particular strategy has worked, and may still work on that rarest of rare occasions… at least getting the buyers to your door, that-is. The problem is that even if that was the extent of your Marketing strategy, there’s still some major hurdles to be cleared before you’ve got signatures on the dotted line and have actually closed the transaction. But we’ll talk about all the paperwork and other hassles later.
For now, lets get back to the Marketing. Perhaps the most compelling reason a seller should use a local professional Real Estate Agency to sell their property is because that agency has the ability to “list” homes for sale through the Multiple Listing Service (MLS.)
The Multiple Listing Service is a cooperative arrangement between most Real Estate Brokers to pool information about Real Estate for sale into a common data base from which all cooperating members can access. When a house is listed by one company, that information is shared with all cooperating companies. In most cases any commissions generated by the sale of such a property are then split between the listing agency and the selling agency. This creates a win-win arrangement that generates traffic and allows listings to be effectively shared among the membership.
The most important result of this arrangement is that any property placed on the MLS can be sold by any other member (Real Estate Broker) of the MLS.
In other words (and this is important,) real estate brokers don’t just sell their own company’s listings, they can sell any within their MLS. This is extremely important for the seller. Without information being shared via the MLS, Real Estate would be exceedingly difficult to market beyond what newspapers, periodicals or any other advertising would be able to accomplish. Without the MLS, you’ll usually be sitting in that rocker on the front porch waiting for your house to sell for a while. But that’s not the only reason to use and Agent.
An Agent is your advocate in every regard who’s job it is to provide you with all possible information and or services that will be of benefit throughout the transaction. A good Agent will field phone calls, distribute information and stand between you those who might waste your precious time.
Without the help of a professional Agent, you run the risk of misjudging market conditions. A home that is priced too high may waste precious time sitting on the market for longer than it should. On the other hand, what could be worse than to price your home too low? Other than the likelihood that it will probably sell in record time, there’s nothing good about losing money that you shouldn’t have by under pricing your property. Among the tools an agent can provide for you is help with pricing information via a Comparative Market Analysis (CMA.)
The Comparative Market Analysis (CMA) prepared by your agent/broker will compare active listings, recent and pending sales, days on market, price adjustments etc. of “like” or comparable properties first in your immediate neighborhood, then in the surrounding similar neighborhoods within the region. CMAs are given by brokers in pursuit of a listing free of charge. It’s important to stress however that a CMA is an informal instrument meant to be used as a guide, never as a substitute for a formal appraisal. When or if a formal appraisal should be used is another question your broker can help you answer.
Don’t forget the mountain of paperwork an Agent can help get you through. Earnest Money Agreements (that you might need help understanding) run at least eight pages in Oregon, and that’s not including any counter-offers back and forth or the state-mandated disclosure forms that will have to be completed and presented to any potential buyers before you can close a deal. Just shuffling the paper and keeping track of it all is a huge undertaking. Taking that paperwork and dealing with buyer’s lenders, appraisers, title companies, escrow officers etc., should be reason enough by themselves to convince anyone to make good use of a professional Agent and his Brokerage.
It is estimated that more than 80% of FSBOs end up getting listed by a professional agency in the end. Unfortunately, this usually only happens after the seller has wasted much more time and effort than was necessary. In worst case scenarios, this decision finally to list professionally comes only after markets have softened and prices have weakened to a point that have cost the seller much more than any possible agency commissions would have originally.
After time, you might be successful selling your home on your own. However, without the help of tools like the MLS and an Agent to help you get you through the paperwork, doing it by yourself is likely to take a lot longer and be a lot more work and trouble than you were expecting.
Fred Jaeger is a licensed Oregon Real Estate Broker and e-PRO Certified Realtor® associated with Gilchrist Real Estate Company in La Pine Oregon. He can be reached directly at 541 598-5449 or fred@gilchristrealestate.com .
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