Thank you Rocky Dickerson for your original blog.
Sure, it sounds good on paper. Just like it may sound good not to give your employees their holiday bonus so that you can save money. However, just like not paying employees a holiday bonus they were looking forward to can cost you (lower morale and higher employee turnover), trying sell your home yourself without a licensed agent is a terrible mistake. In fact, it is 11 mistakes.
- The number one mistake is – money. Many people try to sell their home without an agent because they want to save for instance 6, 7 or 8% on the agent’s commission. 2 things here – first, the vast majority of buyers seeing the home of someone trying to sell it themselves still have an agent and so the person that tries to sell it themselves usually still spends say 3%, 4% or even more to the agent that represents the buyer. In addition, due to a number of factors, NAR has found in a survey of folks selling their home themselves, that they actually ended up with a sales price over 20% LESS than properties listed by a real estate agent.
- Expert advice. These agents have hours of education and continuing education, plus the experience that they and their broker have from countless transactions before yours. Imagine trying to do your own knee replacement surgery. Sure, there may be no life-threatening organs to lose in the area, but wouldn’t you want a staff that has done that surgery hundreds of times before yours? Selling a home can be extremely complicated and you want and need that experience to help and guide you.
- International networking. 100 years ago, someone usually sold their home to someone else that lived in the same town. 60 years ago, it was the same state. 30 years ago, it was the same country. Now buyers come from all over the world and real estate agents have international networks they work with to expose your home to millions of buyers all over the globe. Think of it this way, if you have a store with 1,000 items to sell, do you want 1 buyer wanting to come into your store or do you want 500 buyers wanting to come into your store?
- Agents are your version of call screening. Instead of dealing with dozens or hundreds of useless robocalls, telemarketers and unqualified buyers calling because your home is for sale, agents take (and screen) those calls for you so that you never have to bother with them.
- Market conditions. A licensed agent can keep their finger on the pulse of your market place. I recently saw a day where in just 8 hours over 10% of the houses available for sale were sold. That information is vital and can have a profound effect on the value of your home. Yes, you may hear about it 2 weeks from now when the local Board of REALTORS issues a press release but your agent can have that information to you in minutes, not weeks. That up to the minute information is vital to getting the top dollar for your home.
- Marketing expertise. Your real estate professional not only knows the marketplace, but also marketing. They can tell you what is and is not working in selling a home today. As we saw in 2020 with the pandemic, what was selling a home one week was completely different from what was selling a home the week before. You don’t want to waste hundreds or thousands of dollars learning those tough lessons.
- Agents know what to look for. Agents are looking for the subtle signs of possible trouble in the home. The subtle signs you started overlooking years ago, your agent sees with fresh eyes. They can advise you on what may be a potential maintenance issue or even a more severe issue long before it costs you a buyer.
- Fiduciary duty. Your agent owes you a fiduciary duty. They hold a legal or ethical relationship of trust. You can tell them you will take $20 for your $500,000 home, but your agent can’t tell anyone else that until you give them specific permission. Don’t believe those wild and crazy scenes from “reality” TV shows about real estate agents. Those are somewhat scripted for dramatic effect. If agents did some of those things you see on TV, they would lose their license.
- Attention to details. 60 years ago, you could have a listing agreement, sales agreement and escrow instructions all fit onto 1 legal sheet of paper if you wanted to. Now, with numerous disclosures, state laws, CC&Rs and agency forms and the like, you may end up with over 200 pages of documents by the time it is all through. Your agent and their staff go through all that paperwork paying close attention to detail. You may read a clause and think it’s perfectly normal and your agent can spot a disaster in the making.
- Negotiating skills. One of the areas that people who try to sell their home on their own lose the most money in is negotiation. Your agent is a neutral third party with no emotional interest. That makes it far easier for them to negotiate on your behalf. Now the agent can “be the bad guy” instead of the seller of the home.
- Access to experts. Real estate agents due to the huge number of transactions they have performed, have discovered which companies do good business and which do not. If you need electrical work done to get your home sold, you don’t want to spend $5,000 on an electrician only to find they weren’t licensed and their work isn’t up to code. You don’t want to put your faith in the buyer’s lender if that lender is known for blowing transactions at the last minute.
I know I said 11 things but there is also a 12th item. The peace of mind of knowing that after the transaction is done, if you misplace a document or have a question, the agent and their office are there for you.
Just like the old TV commercial said, “You can pay me now, or your can pay me later”. Statistics show you can try to save the commission and still most people lose much more than say a 6%, 7% or 8% commission.