Selling our home- agent or no agent

[moneymaker]

Hey everyone,
Wife and I will be selling our home soon. This will be a first for us even though we have purchased three homes in the past.

We are really thinking about selling it ourselves and offering a 3% commission to buyers agents. This would save us approx $17-20k.

Seems that with so many tools and ways to research, advertise and list the home nowadays, I’m kinda wondering if I really need an agent. Wife will be available to show the home and we do have quite a bit of experience in real estate, just not as much on the sell of real estate.

I welcome everyone’s input...does an agent really provide $17-20k in value and expertise?

 

[REWahoo]

This doesn't answer your question but this "Golden Oldie" thread on FSBO does have some good information:

http://www.early-retirement.org/forums/f28/10-easy-steps-to-fsbo-your-house-21501.html

 

[moneymaker]

Thank you! I’ll check that out. I did want to say we will hire a lawyer and title company obviously for the closing and ensure legally everything is correct

 

[lakerunner]

We have found that you can get an agent to list it in the MLS for under 3.5 to 4% total. This gets it in front of other agents and listed on the various real estate sites like Zillow. We recently sold my parent's place this way.

 

[BeachOrCity]

Like many on this site, I am more than capable of doing a FSBO, but I have never done one and here is why:
-- To properly market your home, you have to pay 2.5 or 3% to buyers agent, so you are only saving your own agents fee
-- Since you said saving 17-20K assume your talking about 3% listing agent fee so maybe 600K house?
-- You can always get a limited service listing for 1% fee to you who will still comp buyer agent 3% (or whatever you say). Total commission 4% but you only pay 1% extra vs selling yourself.
-- If you select a good agent, you will have a superior negotiating position than if you negotiate directly. Its just the way negotiation works, if there is a separation from the decision maker on price (you and the buyer), you each have a better position than if you are involved directly. This is actually the primary reason I use an agent.
-- A good agent can keep you clean on disclosure without you having to spell out everything a buyer may not like about your property.
-- Lots of buyer agents "HATE" working with FSBO sellers and will do everything they can to steer their clients away (another big reason I use an agent).

If you do use an agent, insist on an "uncut" copy of their track record showing all listings they took, the original price, the sold price, and include unsold homes they listed as well. Highest volume does not equal best agent FOR YOU. Look for someone who has decent volume, but gets what you think is top dollar for the homes they sold. Who invests in marketing, and who does not?

If your house is high end, a real HD photography 3D tour will help in a major way as will professional staging.

The listing agent makes a lot of money for the time spend on high dollar listings. Make them commit to marketing the home in writing.

Hope this helps

(FYI, I have zero conflicts in terms of being agent or family member agent etc)

 

[Shabby]

I've heard good things about Redfin who does it for 1%

 

[moneymaker]

Like many on this site, I am more than capable of doing a FSBO, but I have never done one and here is why:
-- To properly market your home, you have to pay 2.5 or 3% to buyers agent, so you are only saving your own agents fee
-- Since you said saving 17-20K assume your talking about 3% listing agent fee so maybe 600K house?
-- You can always get a limited service listing for 1% fee to you who will still comp buyer agent 3% (or whatever you say). Total commission 4% but you only pay 1% extra vs selling yourself.
-- If you select a good agent, you will have a superior negotiating position than if you negotiate directly. Its just the way negotiation works, if there is a separation from the decision maker on price (you and the buyer), you each have a better position than if you are involved directly. This is actually the primary reason I use an agent.
-- A good agent can keep you clean on disclosure without you having to spell out everything a buyer may not like about your property.
-- Lots of buyer agents "HATE" working with FSBO sellers and will do everything they can to steer their clients away (another big reason I use an agent).

If you do use an agent, insist on an "uncut" copy of their track record showing all listings they took, the original price, the sold price, and include unsold homes they listed as well. Highest volume does not equal best agent FOR YOU. Look for someone who has decent volume, but gets what you think is top dollar for the homes they sold. Who invests in marketing, and who does not?

If your house is high end, a real HD photography 3D tour will help in a major way as will professional staging.

The listing agent makes a lot of money for the time spend on high dollar listings. Make them commit to marketing the home in writing.

Hope this helps

(FYI, I have zero conflicts in terms of being agent or family member agent etc)

Very insightful. Definitely gave me some tips to consider and think about. Yes, home on Zillow says $631k. Low end of $$580 and high end of $665k....

I really appreciate your info. I am still going to interview some agents to see if I can get a 4% agent and also see what different agents offer

 

[Cobra9777]

I'm an avid DIYer. But this is one area I go with the pros. Example... we recently sold a rental house in a VERY red-hot area of the DFW metroplex. It hit MLS Friday afternoon and by Sunday night, we had over 50 showings and 6 offers. Monday morning, another 3 offers came in. All 9 offers were significantly above our asking price, and likely above any reasonable appraisal, which could be a problem.

Our agent knew exactly how to handle this. He told the top 5 offers they would need to commit extra cash down, to cover any potential "appraisal shortfall." Three dropped out, one offered half, and the other offered to cover 100%. He told me, "this is how I separate the serious offers from the ones who just try to jostle their way to the top of the stack with the intent to negotiate more seriously after inspection/appraisal."

IMO, you not only want an agent, you want a high-volume agent with in-depth market knowledge and the experience to take advantage of that knowledge on your behalf. If I was handling that deal myself, I would not have known to request additional cash commitments in the event of appraisal shortfall. That's just one example.

 

[COcheesehead]

We have friends who tried to list on their own. I wish anyone willing to go down that road luck. They had nothing, but problems. Even lost a vacation over it. They had a potential buyer ask to see the property. It had to be the coming weekend. No other options. They had a vacation planned, canceled it to let the potential buyer view the property. You guessed it, the buyer canceled. Trip was on points. No refund.

 

[Aerides]

I'm an avid DIYer. But this is one area I go with the pros.

I have this approach too. I consider it money well spent to deal with the headaches. Sure, some sales happen easy, and you might feel like 17k is a lot for what you got. But some buyers and situations are tricky, and an experienced agent earns their weight with those.

 

[travelover]

It depends a lot on the market. In a hot sellers' market you can probably pull off a FSBO. In a slower market or with an odd piece of property an agent many be worth their cost.

When I sold my last house, I chose the top $ selling agent in my state. It was a disaster. He over priced the home and it sat on the market for months. His only suggestion was to reduce the price, which I did repeatedly, but the damage had been done. In the end I got a low offer and I made him reduce the commission by 2% for me to accept the offer which made my take acceptable to me. My lesson was that it is hard to choose a good agent - they are in the business of selling -themselves and houses and the occasional seller is at a disadvantage.

 

[MRG]

I have this approach too. I consider it money well spent to deal with the headaches. Sure, some sales happen easy, and you might feel like 17k is a lot for what you got. But some buyers and situations are tricky, and an experienced agent earns their weight with those.

+1

We've sold 2 on our own and lucked out. One was a rent to own. The other someone came to buy an aquarium and offered they were very interested in the property. We had a deal a week later.

The second one got ugly in the end, the buyers threatened to sue. All over the washer connection dripping after we closed and moved out(we rented back from them for 60 days).

Our last sale was after we'd moved out of state. Our listing agent earned every dime!

 

[ckelly78z]

I'm looking at 50 acre farm properties, and really appreciate a quick flyover with a drone that has a video available for viewing. This would also probably be a selling point for a large home, with a well landscaped property so buyers can see the whole yard, and a bit of it's surrounding neighborhood.....just a thought !

 

[COcheesehead]

If you are going to pick an agent, don't necessarily pick a high volume one, pick the one that specializes in your neighborhood. They will know why other homes sold or did not sell. What are considered the upgrades for homes of your type. They may also have buyers wanting to move into that part of town.
That is what happened to us. We had two buyers with competing offers without hitting the MLS.

 

[NgineER]

I will provide a different point of view...

Selling by yourself is an easy way to make $15-20k, provided your property is "average" and not super unique.

But, in order to sell by yourself...

you have to, have to, have to get it on the MLS
I'd advice you to use an attorney for looking over the PA after any offer
You have to stage it to look nice and great pictures
you will have to get an electronic lock box that works with the MLS

I would also invite some top real estate agents to see
-how they would price it
-what they would have you fix before listing
-what they would do for you

If you are happy with what they have to offer. sign up with them, if not, list it yourself.

It is very different now compared to only a decade ago when real estate agents gave you a print out of the listings. Now they just set up your search criteria and buyers select the properties through an automated email service, this is very different from how it used to be.

The buyers agents might screen against low commission listings in the property listings (but buyers would probably be very unhappy and potentially change agent if they discover properties on Zillow that don't show up in their MLS email), but they are unlikely to screen against for sale by owner. They might discourage and complain verbally about how hard for sale by owners are to work with, but if a buyer wants to see your house they will make it happen.

I do agree that using a realtor provides a separating layer and negotiation buffer, but in the end they want to make the commission and will encourage you to sell faster and lower rather than getting you the maximum $$. They are unlikely to push hard to get you an extra $25k if it takes three months extra as it only yields them $750 extra on top of the 3% of $600k before taxes and agency fees. If they can sell the property in a week and turn around and sell another the next week they would rather get it off their book for $18k vs $18.75k.

Freakonomics is a good read on real estate agents and selling of their properties vs. clients' properties.

 

[moneymaker]

I will provide a different point of view...

Selling by yourself is an easy way to make $15-20k, provided your property is "average" and not super unique.

But, in order to sell by yourself...

you have to, have to, have to get it on the MLS
I'd advice you to use an attorney for looking over the PA after any offer
You have to stage it to look nice and great pictures
you will have to get an electronic lock box that works with the MLS

I would also invite some top real estate agents to see
-how they would price it
-what they would have you fix before listing
-what they would do for you

If you are happy with what they have to offer. sign up with them, if not, list it yourself.

It is very different now compared to only a decade ago when real estate agents gave you a print out of the listings. Now they just set up your search criteria and buyers select the properties through an automated email service, this is very different from how it used to be.

The buyers agents might screen against low commission listings in the property listings (but buyers would probably be very unhappy and potentially change agent if they discover properties on Zillow that don't show up in their MLS email), but they are unlikely to screen against for sale by owner. They might discourage and complain verbally about how hard for sale by owners are to work with, but if a buyer wants to see your house they will make it happen.

I do agree that using a realtor provides a separating layer and negotiation buffer, but in the end they want to make the commission and will encourage you to sell faster and lower rather than getting you the maximum $$. They are unlikely to push hard to get you an extra $25k if it takes three months extra as it only yields them $750 extra on top of the 3% of $600k before taxes and agency fees. If they can sell the property in a week and turn around and sell another the next week they would rather get it off their book for $18k vs $18.75k.

Freakonomics is a good read on real estate agents and selling of their properties vs. clients' properties.

Great advice and I like your perspective. Much of what you said is what my wife and I think as well.

From what I know of, it seems there are many agents nowadays that really are in it because it was an easy business to jump into and didn’t really require much up front to get in. Additionally, I totally agree that the few I’ve already talked to seem to just want to list at a good price to sell it quickly, and then they try to provide a reasonable argument on why it’s the best route to go.

Also, I forgot to fail to mention that my wife was s realtor for about 3 years but that’s been 10 plus years ago. Any how, we have a pretty good idea on what to do to get it sold. It’s a very normal, but nice home in arguably the best area in metro Detroit. House is completely updated. New paint, finished basement, master bath remodel and kitchen. Anyway, I appreciate yours and everyone else’s perspectives and insight.

 

[travelover]

..........Freakonomics is a good read on real estate agents and selling of their properties vs. clients' properties.

Coincidentally, my real estate agent listed his home at the same time as mine. His was not selling, either. Every time he called me to lower my price, I asked why he wasn't doing the same. Crickets.

 

[mrWinter]

I'm an avid DIYer. But this is one area I go with the pros. Example... we recently sold a rental house in a VERY red-hot area of the DFW metroplex. It hit MLS Friday afternoon and by Sunday night, we had over 50 showings and 6 offers. Monday morning, another 3 offers came in. All 9 offers were significantly above our asking price, and likely above any reasonable appraisal, which could be a problem.

Our agent knew exactly how to handle this. He told the top 5 offers they would need to commit extra cash down, to cover any potential "appraisal shortfall." Three dropped out, one offered half, and the other offered to cover 100%. He told me, "this is how I separate the serious offers from the ones who just try to jostle their way to the top of the stack with the intent to negotiate more seriously after inspection/appraisal."

IMO, you not only want an agent, you want a high-volume agent with in-depth market knowledge and the experience to take advantage of that knowledge on your behalf. If I was handling that deal myself, I would not have known to request additional cash commitments in the event of appraisal shortfall. That's just one example.

Good example of the value of an agent. I also have been leaning toward FSBO when I sell my house in the next few years.

The fact that it costs a percentage of sale price to put a listing on MLS is just a total scam in my opinion, at best a hold over from a previous age, frustrating.



The main reason I lean toward FSBO is that I just don't believe the argument that agents will work hard to get the highest sale price. Rather, I think they will work to get the house sold as fast as possible, or with as few hours spent by them as possible. Is it better for an agent to take twice as long and twice as much work doing open houses etc to increase the sale price by 10% and thus increase their commission by 10%, or to get the house sold in half the time and then pick up another listing and sell that in the same amount of time, thus increasing their commission in that same time period by 100%. Your goals and theirs are not aligned. Watch the reality tv shows on people selling properties, 100% of the time it's an owner telling the agent he needs to sell it for a high number, and the agent trying to convince them to let it go for less. Yes I realize reality TV is a terrible learning mechanism but I still think the basic disconnect is a real one.

 

[ShokWaveRider]

Zillow has 3 levels of sales:

1) Traditional Realtor Listed property.

2) FSBO

3) Make me Move.

More Info: We listed our home on "Make Me Move" and even though it was not directly listed for sale by owner, we had ~30 realtors call to attempt to get the listing, so realtors see it, and if they have a buyer they will come. We also put a sign up outside the house.

We got a full price offer in a week on Make me Move. We were taken by surprise. It did fall through after 6 weeks, but the reason was very genuine and we chose out of courtesy to let the buyer out of the contract, it was a cash offer too. The point being that it sold with Zillow only. We since removed the listing so we could re-evaluate our situation as we had nowhere to go if we sold, and would have to rent. Also after looking very hard for those 6 weeks we realized that there was nowhere in the area we wanted to be other than our development, and all the homes for sale in it were not to our liking.

If you list it FSBO it will appear on Zillow with all the other MLS listings, but in a different color. Again, Prospects and Realtors see it. In today's RE market, if it is on Zillow and people are looking they WILL find it.

Around here most homes sell by word of mouth or by drive by. So IMHO Listing with a realtor is a waste of ~3%. so it really depends on your own situation.

Realtors love listings, they get their 3% and potentially do not have to do a lot, as another realtor will most likely sell it for them, or private house hunter will see it and come to them as the listing realtor.

 

[NgineER]

I'm an avid DIYer. But this is one area I go with the pros. Example... we recently sold a rental house in a VERY red-hot area of the DFW metroplex. It hit MLS Friday afternoon and by Sunday night, we had over 50 showings and 6 offers. Monday morning, another 3 offers came in. All 9 offers were significantly above our asking price, and likely above any reasonable appraisal, which could be a problem.

Our agent knew exactly how to handle this. He told the top 5 offers they would need to commit extra cash down, to cover any potential "appraisal shortfall." Three dropped out, one offered half, and the other offered to cover 100%. He told me, "this is how I separate the serious offers from the ones who just try to jostle their way to the top of the stack with the intent to negotiate more seriously after inspection/appraisal."

IMO, you not only want an agent, you want a high-volume agent with in-depth market knowledge and the experience to take advantage of that knowledge on your behalf. If I was handling that deal myself, I would not have known to request additional cash commitments in the event of appraisal shortfall. That's just one example.

Interesting angle - need to remember this when selling rental properties in the future...

 

[NgineER]

Zillow has 3 levels of sales:

1) Traditional Realtor Listed property.

2) FSBO

3) Make me Move.

More Info: We listed our home on "Make Me Move" and even though it was not directly listed for sale by owner, we had ~30 realtors call to attempt to get the listing, so realtors see it, and if they have a buyer they will come. We also put a sign up outside the house.

We got a full price offer in a week on Make me Move. We were taken by surprise. It did fall through after 6 weeks, but the reason was very genuine and we chose out of courtesy to let the buyer out of the contract, it was a cash offer too. The point being that it sold with Zillow only. We since removed the listing so we could re-evaluate our situation as we had nowhere to go if we sold, and would have to rent. Also after looking very hard for those 6 weeks we realized that there was nowhere in the area we wanted to be other than our development, and all the homes for sale in it were not to our liking.

If you list it FSBO it will appear on Zillow with all the other MLS listings, but in a different color. Again, Prospects and Realtors see it. In today's RE market, if it is on Zillow and people are looking they WILL find it.

Around here most homes sell by word of mouth or by drive by. So IMHO Listing with a realtor is a waste of ~3%. so it really depends on your own situation.

Realtors love listings, they get their 3% and potentially do not have to do a lot, as another realtor will most likely sell it for them, or private house hunter will see it and come to them as the listing realtor.

I'd argue that you can also get a for sale by owner into the first category if you choose a flat fee listing with MLS. When we sold our last house in 2012 we paid $395 for a listing on the MLS with a yard sign and $50 for an electronic lock box. But I would not do it through FSBO however as it is likely to show up differently on Zillow.

We actually got the tip to list by ourselves on the MLS through a realtor friend. We sold our house for $50k more than we had purchased it for in 2007 and it sold within a week. The house was in great condition and much updated from when we bought it.

 

[HI Bill]

I once did a FSBO. For me it worked because I had already found a buyer. He had access to the forms used by realtors in my state, and he filled them out himself. I had a realtor friend review the forms, and we (the buyer and I) split the savings on not paying the 6% commission. I got the price I was looking for. The buyer was happy. But it's not for everyone. For a higher-priced property, listing may be the only way to find a buyer, and to get top $.

Realtors do a lot of work, and keep the sale on track if they're good. I just sold an inexpensive home in CA, and the realtor was worth her weight in gold. You get what you pay for.

 

[moneymaker]

Good example of the value of an agent. I also have been leaning toward FSBO when I sell my house in the next few years.

The fact that it costs a percentage of sale price to put a listing on MLS is just a total scam in my opinion, at best a hold over from a previous age, frustrating.



The main reason I lean toward FSBO is that I just don't believe the argument that agents will work hard to get the highest sale price. Rather, I think they will work to get the house sold as fast as possible, or with as few hours spent by them as possible. Is it better for an agent to take twice as long and twice as much work doing open houses etc to increase the sale price by 10% and thus increase their commission by 10%, or to get the house sold in half the time and then pick up another listing and sell that in the same amount of time, thus increasing their commission in that same time period by 100%. Your goals and theirs are not aligned. Watch the reality tv shows on people selling properties, 100% of the time it's an owner telling the agent he needs to sell it for a high number, and the agent trying to convince them to let it go for less. Yes I realize reality TV is a terrible learning mechanism but I still think the basic disconnect is a real one.

Yep. I completely agree. It’s in their best interest and makes the most sense for them from a money standpoint.

I think I will interview a few to just have options and see what they offer.

I like the point that someone made that as the seller, I don’t have to sell it or agree on a price so if the realtor wants it sold, then they can reduce their commission if they think I should take a lower offer or sell at a lower price.

 

[ShokWaveRider]

We did this simple evaluation, please bear in mind we love our area and just want a smaller home with no pool.

Home Sale Price: $775k

Closing Costs here in FLA: $11k

RE Fees at 6%: $46.5

Summary/Conclusion: One REALLY must want to move. For $57.5k one can do a lot of home maintenance for a few years. So as we really love our area, we decided to stay put for a while.

 

[brucethebroker]

Very insightful. Definitely gave me some tips to consider and think about. Yes, home on Zillow says $631k. Low end of $$580 and high end of $665k....

Let me open with the fact that I am a real estate broker, for over 20 years.

Forget Zillow's comps. Not very precise, IMHO. If you decide to not have a listing agent/broker, then pay for a home APPRAISAL by a local appraiser. Your lender should have a lead or two. In our Midwest area, about $350. Great leverage, a real appraisal, when buyers try to beat you up on price!

If you decide to list with a discount broker that puts your house in the MLS (a good idea, BTW), be sure to get someone who REALLY knows your general area. That way you can save the appraisal fee by having the broker provide a free market analysis. Better, have two or three brokers compete, and you can compare all 2-3 suggested prices.

Obviously, FSBO's seem more successful in hot markets. Cooler markets need a little more marketing, and a good broker can help. But ALWAYS get your home on the MLS-rule number 1.