Real Estate Agent or For Sale By Owner?

This is one of the most searched topics on the web when it comes to selling a house. Unless you have owned your home for several years you can expect to sell your home for less than what you paid for it. The current housing market is still struggling, and many people are bypassing the services of real estate agents in attempts to save money on real estate commissions. The value of your home, or actually the selling price, will determine how much you actually save. If your house sells for $200,000 a 6% commission (typical for many states) you will save $12,000! Or…will you? Below I share the benefits of both options, using a real estate agent and going for sale by owner. I will expand on each specific benefit on later posts to this blog since each point is a good conversation topic.

The Benefits of For Sale By Owner:

1. The most important benefit of selling your house on your own is that you negotiate directly with the potential buyer. When you have to talk to your agent who then talks to the other agent who then talks to the potential buyer much can be lost in translation. This also creates a very adversarial relationship between you and the potential buyer. You never know what the buyers really need and they never know why you are selling. 99% of the time the negotiation is strictly price!

2. Great opportunity to increase your net profit by avoiding or reducing real estate commissions.

3. Ability to market your property through companies such as ForSaleByOwner.com and FSBOLocal.com. This services cost very little and allow you to market your properties in similar ways as a real estate agent would. These services offer training materials and phone support as well.

4. No contract – you can decide to pay for a service such as that offered in by companies such as FSBO Local or For Sale By Owner on a monthly basis or with a one time fee. If you're buying or selling real estate, you owe it to yourself to click here! There are no 3 or 6-month contracts like those typical with real estate agencies.

The Benefits of Using a Good Real Estate Agent:
(These comments are based on selecting a top-performing real estate agent)

1. The most important benefit is marketing. A good real estate agent will market you house, schedule showings and open houses, print and mail marketing material to people who are actually looking to buy a house.

2. Constructive criticism – we all tend to show our house in a condition we feel is desirable, but this is not the best way. A good agent will provide constructive criticism and will advise on how to arrange your home in order to increase its appeal. I recently visited a home which was being sold by its owner. The house was beautiful and immaculate. It was full, VERY FULL, of antiques. If you were into antiques this might have sold the house; however, most people are not and the clutter actually hid the house’s best features.

3. A real estate agent is an expert on the entire process of selling a house. This includes listing the property, reviewing offers, selecting a title company, reviewing addendums and “subject to’s”, coordinating closing details, scheduling inspections, surveys, and other items pertinent to the transaction. He or she will insure that things go according to plan and will help you close on time.

4. Pricing your house to sell – real estate agents provide a comparative market analysis to come up with a selling price. Simply pricing your home $1,000 less than the house down the street will not sell your house first. If it does sell first it may be because you listed it cheap. Agents will also discuss your needs and will price the house taking into consideration their commission.

5. Information on what’s selling now – agents that are familiar with your neighborhood and surrounding areas know what’s selling. They are in tune with what features drive attention and what is in demand. They can also help you increase the value of your home with updates that will cost little to no money.

The advantages of one are the disadvantages of the other. So it’s not worth repeating at this point. I will cover each point in detail in the coming days. In the meantime feel free to post your comments, experiences or other information you know would be helpful to other.

Thanks,

The Housing Ecologist