Buying (or selling) a home is the single largest financial transaction in most people’s lifetime. Let’s face it, homeowners looking to sell their homes often have very high expectations when it comes to the house they live in. Buyer’s too, often have “buyer’s remorse” a few days after dropping a huge amount of money on the place they will now call “home”.
Many sellers chose to sell their homes themselves “FSBO” or For Sale By Owner, instead of using a real estate agent. Here are just a few of the reasons why.
1. “High Commissions”: According to a homelight.com article published in May, 2022; saving on the listing commission was the number one reason homeowners chose to sell themselves. Commissions average from 4-6% depending on the region and the agent. That’s a whopping $4,000-$6,000 on every $100,000 of sale price. Many sellers would rather pocket that money themselves, or they just don’t have enough equity in the home to pay high commission rates to an agent.
2. “Bad Agents”: Most licensed real estate agents are honest, very hardworking and dependable. They live by a very strict code of ethics. But let’s face it, there are always going to be a few agents who give the rest a bad name. Good agents take their roll and their responsibilities seriously. After all, selling your home is their livelihood. But, there are an awful lot of “part-time” agents out there too, so choose wisely.
Many homeowners feel like their agents over promise and under deliver. This is especially true on two key areas, price and time. Often, homes sit on the market for much longer than an agent or seller anticipates, such as when interest rates are going up. This causes friction between the agent and seller and can lead to other areas of tension as well. This is especially true when an owner needs to sell quickly. If the house is over-priced, this can cause a lot of stress when the asking price has to be adjusted down. Even more so if the price is adjusted down several times before the house sells. Of course this wasn’t the issue from 2020-2022 when bidding wars were fairly common. But, as interest rates rise, buyers tend to hold onto their money and look for “better bargains”.
3. “You do all the work but they get all the credit”: Many home owners look at their home and see a castle instead of a house. They overlook the loose handles, missing cover plates or dated drapes and colors on the walls. A good agent knows what sells and will give you pointers on how to get the most out of your home. But, often this advice leaves sellers feeling like their agent is demanding an awful lot of work from them while the seller doesn’t see any of the behind the scenes effort agents put in for that big commission they are being paid. Usually, this boils down to a lack of communication or managing expectations.
So what’s the answer? Well, there’s no one “right” answer for every situation.
- Be realistic about the condition of your home. Consider whether you want to (or can) put in the effort to touch up or renovate your home.
- Make sure your agent has referrals, answers their calls and doesn’t “ghost” you. Ask what marketing efforts they use to sell your home. A lazy agent can kill a good deal.
- If you need to sell your home fast, or if you don’t have enough equity in the home to let you afford paying a sales commission, you might want to consider selling your home yourself. Be realistic about what your home is worth and know how much you need to sell or walk away from your house.
- Know the true market value of your home. Do your research and get multiple comps (comparable prices) on properties similar to yours that have recently sold; or insist that your agent show you these comps so you know the listing price is both realistic and gives you “the most bang for your buck”.
- If you can no longer afford the house you’re living in, have an unwanted inheritance or find yourself no longer wanting to be a landlord; you may want to consider other options as well. Otherwise, a really good agent is usually worth the commission they charge.