Once you mention that you're planning to sell your home, the first and most common suggestion that you'll get is to hire a real estate agent. Indeed, an experienced agent is in a better position to sell your property as he (or she) has access to certain resources, and he is more well-versed when it comes to merchandising, marketing, dealing with documents, and interacting with would-be buyers. But, there are actually other alternatives.
For instance, in case you are selling your home during a time when the real estate market is down, it will likely be better for you to do the work alone. During such times, it's crucial to save every dollar that you can, and this article will offer a few suggestions on how to save money that you would have used for an agent's commission; plus, there are tips on how to find buyers even when the market is down. In case you are searching for ways to save money that you will likely spend if you hire a real estate agent, here are a few things that you should know.
1Pros Of Hiring An Agent
In general, the most common and most effective way to sell a property is by using a real estate agent. Certified agents have access to MLS or Multiple Listing Service, which will quickly and surely increase the exposure of a property for sale. In addition, an agent usually works with other brokers working in a certain area, which will help in furthering exposure. However, be aware that not all real estate agents have the experience nor interest in increasing their colleagues' interest in your property. Nevertheless, using an agent to sell your home is still the best method.
2Problems With Selling On Your Own
If you're having doubts about hiring an agent, here's what you can do: try to sell your property on your own for about a month. If it doesn't work out, then hire a real estate agent. When working with an agent, be aware that the usual listing period is three months; so, what happens if no one shows any interest in your property during that time frame?
It is actually possible for homes to be listed for more than six months or one year, and these properties do not get bids or attract buyers. When this happens, what's a seller to do? Do you just keep the property on the list and hope for a miracle? Is this the best time to remove the property from the listing and take matters into your own hands? What other options do you have?
3Agents Asking For A Lower Commission
Instead of completely giving up on using real estate agents, why not give a low commission agent a try? Even a low commission agent can still put your home in the MLS database, which is a huge advantage, and you can still work on certain aspects on your own. Plus, you won't be required to give a commission to your agent once you sell your property. A low commission agent not only lists your property on the MLS database, but he also assists you with documenting and organizing other needed paperwork, as well as arranging tours and open houses and helps you with the marketing and financing.
4Cons Of Hiring Low Commission Agents
It may seem like a low commission agent performs the same duties that a regular real estate agent does, but it's not actually the case. Take, for instance, advertising; you will shoulder the costs of marketing your home for sale, which may include putting up ads in newspapers or printing up flyers for distribution. Still, a low commission agent can provide you with the "For Sale" sign that you can place in the yard, but you will host open houses on your own.
You may also have to handle financing matters on your own as most low-cost agents will only provide you with a list of lenders, and you'll be responsible for finding the right one and making arrangements. Moreover, you may be listed in the MLS database, but the agent will not be obligated to spread the word about your property. You must understand what services you are getting, which is likely the bare minimum, with low-cost real estate agents.
5Low Commission Costs
How much you pay a low commission agent will largely depend on the situation. In general, a regular real estate agent will get about 6% to 7% of the total money earned upon selling a property, but a low commission agent will only receive about 2% to 3%. Two to three percent may be the going rate, but you will incur additional costs if you do decide to have your home listed in the MLS database, which will likely be an additional 3%. A number of agents are quite flexible when it comes to how much commission they may receive, but others will not work for you if you do not meet their set rate. When faced with such instances, you could either opt to hire another agent or pay the fee that is asked for.
6Fixed Fee Agents
Another alternative for you is to use a fixed fee real estate agent who will receive a fixed rate, and he is often tasked with two main things: putting your home on the list and placing a "For Sale" sign in your front yard. Fees for such agents usually amount to $500. Expect to sign an Exclusive Agency agreement, which clarifies that you won't be required to pay a commission in the event that you do sell your home on your own. In case you do find a buyer by yourself, the agent will help you finalize the sales agreement; and if your agent is approached by an interested party, he will be obliged to give this person a tour of the property.
As you can see, it's fairly common to turn to real estate agents when selling a property, but it's not an assurance that you'll readily find an interested buyer. Still, before you entirely give up on hiring experienced agents, carefully consider the benefits of opting for either a low commission agent or a fixed fee agent. If you don't find success while using any of these methods, you can do the selling on your own. Many homeowners have successfully done this on their own, and you could be one of them, too.