Should I use a REALTOR to sell my home?
Should I use a REALTOR to Sell My Home?
A question I hear on occasion is, “Why should I use a REALTOR® to sell my home?” It is a valid question for a lot of people who are the do-it-yourself type of people. There are a lot of important factors that go into making this decision, so let’s jump right it.
Let’s go ahead and address this right away since people tend to focus on how much it will cost for a REALTOR® to sell their home vs. trying to sell it by themselves. A 2018 study shows that a typical For Sale by Owner home sold for $200,000 compared to $265,000 for agent assisted home sales. This is a huge gap and let’s take a look at a few reasons why REALTORS® typically generate more money than people who try to sell homes themselves.
There are a few factors that go into this wide price range.
Proper pricing of the home.
REALTORS® have a data from literally every property that has sold in your area. We can analyze the data by doing detailed comparisons and get a market value range for your home. When done properly this range should be very close to what your home will appraise for. This is where an experienced agent can be invaluable. New or inexperienced real estate agents should have their broker in their office, or their team lead with them during the pre-listing portion of your home to make sure no detail is missed.
Sellers that try to price the home by themselves do not typically have this data available so they go by a few methods that are not accurate. Some of them use online valuation sites like Zillow. Although Zillow can be somewhat accurate in cookie cutter subdivisions that are only a few years old, that is about the limit of their ability. When you have homes that are more than few years old Zillow or other valuations sites, have no way to compensate for differences in properties. This includes any updates or upgrades like a new roof, new flooring, updated kitchens and baths, etc. This could skew the value by potentially tens of thousands of dollars.
Good friend or bad friend?
Their “friend” told them what they though it was worth. I have heard where the seller said, “Their friends house down the road sold for $400,000 and it didn’t have a pool so theirs must be worth $450,000”. They also did not take in to count the square footage difference in the homes, the fact that one of the homes had a new roof while the other was almost 20 years old. Sorry ladies and gentlemen but this does not work. Unadjusted comparing of properties can go one of two ways, it could be under priced, or overpriced. Neither of them is a good thing. Proper pricing is one of the most important, if not the most important piece of the puzzle.
If we simply look at the statistics from earlier and go by how much the seller would have saved by using a REALTOR® the number are staggering. If we use 6% (which is not a fixed rate, it could be higher or lower) as a round number for the cost of an agent to sell the home for you, you could have potentially thrown away $49,100. The cost of using a REALTOR® suddenly looks a lot less than what improper pricing will cost you. Remember overpriced properties do not sell, so just putting a price on a home does not mean it will sell.
The good cop, or the bad cop?
When it comes to negotiating a sales price, experienced REALTORS® are great negotiators. Many times sellers just want sell the house so badly themselves that they just forget about how much money they are throwing away. They just want to sell the home so they can move on. This can be a very costly tactic. An experienced REALTOR® can be the “bad cop” and keep them in check.
I look out for the sellers best interest while helping them make the most amount of money possible on the sale of their home. Remember the reason you try to sell the home your self is to save money! Please, please, please do not throw away money.
Another factor to the wide price difference between FSBO and REALTOR® sold properties is the home condition. Once you live in a house for a while you start to notice items that need repaired less often. You may let the repairs slide for a little while and that little while turns into a few years. That red dining room wall may have been the bees knees in 2005, but is it still the current style today? Experienced REALTORS® may evaluate homes every day while many home owners may only sell one home in their lifetime. We can help you with pre-listing inspections, staging tips, and other incredible ideas that will help you generate the most money possible out of you home.
I know as a former contractor I can spot a lot of issues with a home that most real estate agents will never see. If we can spot potential problems upfront before you list your home, and have them corrected, this can save you a lot of money in potential thrown away money later. I have heard from FSBO sellers in the past that instead of making the repairs they just “knocked some money off the price” when they sold it. “Well how much did you knock off, I asked?” The seller said “$10,000″… as I walk away shaking my head. That was only a $2,000-$3,000 repair. I have a group of contractors that I trust if they are ever needed for repairs. Again, please, please, please don’t throw away your money! Let me help you get the most out of your home.
What does a REALTOR® do that I won’t?
Well to sell your home there are a lot of things an experienced REALTOR® will do that you may not know was even a “thing”. Did you know there are about 180 things that a REALTOR® does from start to finish to get your home sold? Here are a few of items in a summary.
- The number one thing I know I do is bring a list of buyers. I have a list of potential buyers who I reach out to to see if they are interested in buying your home as soon as it is listed. They are buyers who have been searching for a home in you area.
Pre-Listing and Listing
- Pre-Listing Appointment to make sure your home is ready to sell.
- Proper listing price range.
- Provide you with my Sellers Guide which has some important tips and security measures.
- Prepare disclosures. This is an extremely important one. Did you know a buyer can come back and sue you at a later time if they find a defect you didn’t disclose? We are in a time where attorney’s market on TV the Radio, the side of a bus… to sue sue sue…
- Prepare marketing materials, hire a professional photographer, get the property in the MLS, print and install the signage, install SUPRA lockbox (which tracks agents who show your home).
- Create paid advertising campaigns to get your home in front of as many qualified buyers as possible.
It never fails that a customer wants to see your home when you have a kids soccer game, or while you have a meeting you cannot miss. Believe it or not, there are buyers who buy a home on impulse. If your home is not able to be seen when that buyer wants to go see it, they could potentially walk into another house and buy it! It only takes ONE buyer to buy your home and you never know who may be that ONE!
When you list your home with an experienced REALTOR®, we make sure we can get that buyer in your home with your permission. I personally use Supra Lockboxes that are “smart boxes”. These are electronic boxes that can only be accessed by licensed agents. The box will notify us when someone accesses the lockbox. It will also tell us who it is, what time they were there, and what time they leave. This gives us the opportunity to reach out to the agent and request feedback from them. The supra box will also provide the showing agent with important details about your home. Using this type of lockbox makes sure that not just anyone can access your house when you are not home. Combination style lockboxes are easy for people to share and they are not a good idea. This brings me to your safety.
Do you know who you are letting into your house when you are showing it by yourself, or did you just answer the phone and tell them to come on in? Do you know if they are pre-qualified to buy a home? Do you know if they are a serial killer? No seriously, there are a lot of crazy people out there and you never know who that crazy person may be. Without proper vetting of people you do not know who you are dealing with.
It is even dangerous for real estate agents as well. Here is a recent video of a real estate agent that was attacked by someone who acted like they were interested in a home. Please do not put yourself or potentially children that may be at home during a showing at risk.
My sellers guide I mentioned early will give some tips on how secure your house for real estate agents to show it.
Offer and Contract
- Confirm receipt of offer and binder deposit.
- Evaluate the offer with the you (the seller) to determine if it is a good offer. Remember I do this everyday and I can explain what can make an offer a good offer or a weak offer. There is more to making sure an offer is a “good offer” than just the offer price.
Once a deal goes under contract and if that deals was to fall apart, that property may then have a “stigma” that something is wrong with it. Neighbors like to gossip and bad information can travel faster than good information. It may be the buyer was just not qualified, but in the eyes of buyers who may not know this, they think there is a problem with the house. Many sellers will not know how to overcome that objective.
- Obtain and verify buyer is actually qualified.
- Counter offer if needed, or have you execute the contract.
- Confirm receipt of executed contract with selling agent.
- Initiate contact with the title company / closing attorney to start the closing process.
- Schedule inspections, review the findings with you, potentially negotiate repairs if needed.
- Track the loan process
- Schedule the time the appraiser can see you home.
- Follow-up on the appraisal.
- If the appraisal comes in low, it can kill the deal. An experienced agent has surely seen issues with appraisals in the past and knows the process to protest an appraisal. Remember we do not want this property go go back on the market… especially if it is for an appraisal issue! Did you know certain types of appraisals stick with that property for 6 months? This means ANY new buyer using those types of financing, will have to use the appraisal that was ordered initially.
- Order Survey
- Assist in solving any title problems. (boundary disputes, easements, death certificates etc)
- Order home warranty if requested.
- Work with selling agent on scheduling final walk-through.
- Request and review closing documents and carefully for errors.
- Schedule our closing time and place.
- Close on your house and get you as much money as possible!
When an experienced REALTOR® assists you in selling your home we do a lot more than simply placing a sign in the yard, and putting your property online. Looking out for your best interest when selling your home is very important to us. Your safety is a priority while showing and selling the home. We strive to meet the ultimate goal of getting your home sold. Making sure your legal obligations are followed on contracts and disclosures is extremely important. This will keep you from breaching the contract. REALTORS® want to be able to help your friends and family on future real estate deals as well. We are here to help!
About the author:
Mike Schwiebert, CPE, REALTOR®, has been a licensed real estate sales associate in Florida since 2007. He has recently won the “Best of Clay Real Estate Agent” in Clay County Florida from the Clay Today. You can contact Mike by phone or text at 904-562-9345 or email at [email protected] See some of his reviews here.
As a REALTOR® he abides by the Code of Ethics.