Today\u2019s real estate market is one of the fastest-moving in recent memory. With record-low inventory in many market segments, we\u2019re seeing multiple offers\u2014and sometimes even bidding wars\u2014for homes in the most sought-after neighborhoods. This has led some sellers to question the need for an agent. After all, why spend money on a listing agent when it seems that you can stick a For Sale sign in the yard then watch a line form around the block?<\/p>\n
Some buyers may also believe they\u2019d be better off purchasing a property without an agent. For those seeking a competitive edge, proceeding without an agent may seem like a good way to stand out from the competition\u2014and maybe even score a discount. Since the seller pays the agent\u2019s commission, wouldn\u2019t a do-it-yourself<\/em> purchase sweeten the offer?<\/p>\n We all like to save money. However, when it comes to your largest financial asset, forgoing professional representation may not always be in your best interest. Find out whether the benefits outweigh the risks (and considerable time and effort) of selling or buying a home on your own\u2014so you can head to the closing table with confidence.<\/p>\n Most homeowners who choose to sell their home without any professional assistance opt for a traditional \u201cFor Sale By Owner\u201d or a direct sale to an investor, such as an iBuyer. Here\u2019s what you can expect from either of these options.<\/p>\n For sale by owner or FSBO (pronounced fizz-bo) offers sellers the opportunity to price their own home and handle their own transaction, showing the home and negotiating directly with the buyer or his or her real estate agent. According to data compiled by the National Association of Realtors, approximately 8% of homes are sold by their owner.1<\/sup><\/span> Here are some things to consider;<\/p>\n In an active, low inventory real estate market, it may seem like a no-brainer to sell your home yourself. After all, there are plenty of buyers out there and one of them is bound to be interested in your home. In addition, you\u2019ll save money on the listing agent\u2019s commission and have more control over the way the home is priced and marketed. But, it’s not as simple as placing a sign on the lawn, packing your belongings and seeing your bank balance increase on closing day.<\/p>\n One of the biggest problems FSBOs run into, however, is pricing the home appropriately. Without access to information about the comparable properties in your area, you could end up overpricing your home (causing it to languish on the market) or underpricing your home (leaving thousands of dollars on the table).2\u00a0<\/sup><\/span><\/p>\n I recently called a FSBO that a customer wanted to see. After only two days it was already pending and the owner was so excited. What he didn’t know, however, was that he priced the home about $40,000 under current market value. Bet he wouldn’t be so excited to hear that he could have sold for a much higher price if he had known the correct market value of his home. And, this does not take into account what he actually sold the home for. At the time of writing this post, the transaction has not closed so I have no idea if he sold for his full asking price or if he accepted a lower offer.<\/p>\n Even during last year\u2019s strong seller\u2019s market, the median sales price for FSBOs was 10% less than the median price of homes sold with the help of a real estate agent.<\/b>1<\/sup><\/span><\/p>\n<\/blockquote>\n And during a more balanced market, like the one we experienced in 2018, FSBO homes sold for 24% (or $60,000) less than agent-represented properties.3<\/sup><\/span> This suggests that, while you may think that you\u2019ll price and market your home more effectively yourself, in fact you may end up losing far more than the amount you would pay for an agent\u2019s assistance.<\/p>\n Without the services of a real estate professional, it will be up to you to get people in the door. You\u2019ll need to gather information for the online listing and put together the kind of marketing that today\u2019s buyers expect to see. This includes bringing in a professional photographer, writing the listing description, and designing marketing collateral like flyers and mailers\u2014or hiring a writer and graphic designer to do so. You will also need to be social media savvy to promote and advertise your home on Facebook, Instagram and more.<\/p>\n Once someone is interested, you\u2019ll need to offer virtual showings. You\u2019ll then need to schedule an in-person showing (or in some cases, two or three) for each potential buyer. In addition, you\u2019ll be on your own when evaluating offers and determining their financial viability. You\u2019ll need to thoroughly understand all legal contracts and contingencies and discuss terms, including those regarding the home inspection and closing process.<\/p>\n While you\u2019re doing all of this work, it\u2019s likely that you\u2019ll still need to pay the buyer agent\u2019s commission. So be sure to weigh your potential savings against the significant risk and effort involved.<\/p>\n If you choose to work with a listing agent, you\u2019ll save significant time and effort while minimizing your personal risk and liability.<\/b> And the increased profits realized through a more effective marketing and negotiation strategy could more than make up for the cost of your agent\u2019s commission.<\/p>\n iBuyers have been on the scene since around 2015, providing sellers the option of a direct purchase from a real estate investment company rather than a traditional direct-to-consumer sales process.4<\/sup><\/span> iBuyer companies tout their convenience and speed, with a reliable, streamlined process that may be attractive to some sellers.<\/p>\n The idea is that instead of listing the home on the open market, the homeowner completes an online form with information about the property\u2019s location and features, then waits for an offer from the company. The iBuyer is looking for a home in good condition that\u2019s located in a good neighborhood\u2014one that\u2019s easy to flip and falls within the company\u2019s algorithm.<\/p>\n For sellers who are more focused on speed and convenience, an iBuyer may offer an attractive alternative to a traditional real estate sale. That\u2019s because iBuyers evaluate a property quickly and make an upfront offer without requesting repairs or other accommodations.<\/p>\n However, sellers will pay for that convenience with, generally, a far lower sale price than the market will provide as well as fees that can add up to as much or more than a traditional real estate agent\u2019s commission.<\/b> According to a study conducted by MarketWatch, iBuyers netted, on average, 11% less than a traditional sale when both the lower price and fees are considered.5<\/sup><\/span> Other studies found some iBuyers charging as much as 15% in fees and associated costs, far more than you\u2019ll pay for a real estate agent\u2019s commission.6<\/sup><\/span><\/p>\n In a hot market, this can mean leaving tens of thousands of dollars on the table since you won\u2019t be able to negotiate and you\u2019ll lose out on rising home prices caused by low inventory and increased demand. In addition, iBuyers are demonstrably less reliable during times of economic uncertainty, as evidenced by the halt of operations for most iBuyer platforms in early 2020.6<\/sup><\/span> As a seller, the last thing you want is to start down the road of iBuying only to find out that a corporate mandate is stopping your transaction in its tracks.<\/p>\n With a flat fee agency, as a seller, you are paying a flat fee to the agency. They will list your home on MLS and other real estate sites. You will still pay a commission to the buyer’s agent, and often the same commission amount to the flat fee agency. I don’t understand the benefit of using one of these agencies. Much like a FSBO, you are responsible for photography, staging, organizing, hosting open houses, scheduling and attending all showings, prequalifying buyers, negotiating with potential buyer… And, in the end, you are still paying a commission. Do your homework before deciding to use an iBuyer or flat fee agency.<\/p>\n According to the most recent statistics, 88% of home buyers use a real estate agent when conducting their home search.1<\/sup><\/span> An agent is with you every step of the way through the home buying process. From finding the perfect home to submitting a winning offer to navigating the inspection and closing processes, most homebuyers find their expertise and guidance invaluable. And the best part is that, because they are compensated through a commission paid by the homeowner at closing, most agents provide these services at no cost to you!<\/p>\n Still, you may be considering negotiating your home purchase directly with the seller or listing agent, especially if you are accustomed to deal-making as part of your job. And if you are familiar with the neighborhood where you are searching, you may feel that there is no reason to get another agent involved.<\/p>\n However, putting together a winning offer package can be challenging. This is especially true in a multiple-offer situation where you\u2019ll be competing against buyers whose offers are carefully crafted to maximize their appeal. <\/b><\/p>\n<\/blockquote>\n And the homebuying process can get emotional. A trusted agent can help you avoid overpaying for a property or glossing over \u201cred flags\u201d in your inspection. In addition, agents offer a streamlined, professional process that listing agents may be more likely to recommend to their customers.<\/p>\n If you decide to forego an agent, you\u2019ll have to write, submit, and negotiate a competitive offer all on your own. You\u2019ll also need to schedule an inspection and negotiate repairs. You\u2019ll be responsible for reviewing and preparing all necessary documents, and you will need to be in constant communication with the seller\u2019s agent and your lender, inspector, appraiser, title company, and other related parties along the way.<\/p>\n Or, you could choose to work with an agent whose commission is paid by the seller and costs you nothing out of pocket. In exchange, you\u2019ll obtain fiduciary-level guidance on one of the most important financial transactions of your life.<\/b> If you decide to go it alone, you\u2019ll be playing fast and loose with what is, for most people, their most important and consequential financial decision.<\/p>\n It is important for you to understand your options and think through your preferences when considering whether or not to work with a real estate professional. If you are experienced in real estate transactions and legal contracts, comfortable negotiating under high-stakes circumstances, and have plenty of extra time on your hands, you may find that an iBuyer or FSBO sale works for you.<\/p>\n However, if, like most people, you value expert guidance and would like an experienced professional to manage the process, you will probably experience far more peace of mind and security in working with a real estate agent or broker.<\/p>\n A real estate agent\u2019s comprehensive suite of services and expert negotiation skills can benefit buyers and sellers financially, as well. On average, sellers who utilize an agent walk away with more money than those who choose the FSBO or iBuyer route.3,5<\/sup><\/span> And buyers pay nothing out of pocket for expert representation that can help them avoid expensive mistakes all along the way from contract to closing.<\/p>\n According to NAR\u2019s (National Association of Realtors) profile, the vast majority of buyers (91%) and sellers (89%) are thrilled with their real estate professional\u2019s representation and would recommend them to others.1<\/sup><\/span> That\u2019s why, in terms of time, money, and expertise, most buyers and sellers find the assistance of a real estate agent essential and invaluable.<\/p>\n The best way to find out whether you need a real estate agent or broker is to speak with one. I’m here to help and to offer the insights you need to make better-informed decisions. Let\u2019s talk about the value-added services I provide when I help you buy or sell in today\u2019s competitive real estate landscape.<\/p>\n Sources:<\/strong><\/p>\n Today\u2019s real estate market is one of the fastest-moving in recent memory. With record-low inventory in many market segments, we\u2019re seeing multiple offers\u2014and sometimes even bidding wars\u2014for homes in the most sought-after neighborhoods. This has led some sellers to question the need for an agent. After all, why spend money on a listing agent when […]<\/p>\n","protected":false},"author":1,"featured_media":11753,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[106],"tags":[53,18,10],"_links":{"self":[{"href":"https:\/\/sonjapound.com\/wp-json\/wp\/v2\/posts\/11751"}],"collection":[{"href":"https:\/\/sonjapound.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/sonjapound.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/sonjapound.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/sonjapound.com\/wp-json\/wp\/v2\/comments?post=11751"}],"version-history":[{"count":0,"href":"https:\/\/sonjapound.com\/wp-json\/wp\/v2\/posts\/11751\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/sonjapound.com\/wp-json\/wp\/v2\/media\/11753"}],"wp:attachment":[{"href":"https:\/\/sonjapound.com\/wp-json\/wp\/v2\/media?parent=11751"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/sonjapound.com\/wp-json\/wp\/v2\/categories?post=11751"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/sonjapound.com\/wp-json\/wp\/v2\/tags?post=11751"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}For Sale By Owner (FSBO)<\/span><\/strong><\/h3>\n
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iBuyer and Flat Fee Agencies<\/span><\/strong><\/h3>\n
Buying Your Home Without An Agent<\/strong><\/h3>\n
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So, Is a Real Estate Agent Right For You?<\/strong><\/h3>\n
Questions About Buying Or Selling? I Have Answers.<\/strong><\/h3>\n
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\nhttps:\/\/www.nar.realtor\/research-and-statistics\/research-reports\/highlights-from-the-profile-of-home-buyers-and-sellers<\/span><\/a><\/span><\/li>\n
\nhttps:\/\/www.washingtonpost.com\/business\/2020\/12\/09\/factors-consider-when-determining-whether-use-an-agent-buy-or-sell-home\/<\/span><\/a><\/span><\/li>\n
\nhttps:\/\/www.nar.realtor\/blogs\/economists-outlook\/selling-your-home-solo-to-save-money-you-ll-actually-make-less-than-you-think<\/span><\/a><\/span><\/li>\n
\nhttps:\/\/www.seattletimes.com\/business\/real-estate\/redfin-is-first-major-ibuyer-to-sell-in-seattle<\/span><\/a><\/span><\/li>\n
\nhttps:\/\/www.marketwatch.com\/story\/selling-your-home-to-an-ibuyer-could-cost-you-thousands-heres-why-2019-06-11<\/span><\/a><\/span><\/li>\n
\nhttps:\/\/www.forbes.com\/sites\/nataliakarayaneva\/2020\/03\/19\/billion-dollar-real-estate-businesses-ibuyer-suspended\/?sh=c7f59f921747<\/span><\/a><\/span><\/li>\n<\/ol>\n","protected":false},"excerpt":{"rendered":"