Is there any process more fraught with potential missteps than that of selling your home?
It is one of the most nervewracking undertakings you’ll ever embark on, to be sure. At every turn, there are serious questions to ask yourself and decisions to be made — but one of the most important choices is whether to use an agent or try to DIY the sale of your own home.
Working with an agent may make things easier, and it may also net you a higher price than you could command on your own. Yet it’s crucial for any seller to exercise a little skepticism when it comes to a real estate agent’s motivation. Read on to find out a few secrets that agents would much rather you didn’t learn!
The Purpose of an Open House Is Not to Sell That House
In theory, an open house makes a lot of sense. It’s a good way to separate the wheat from the chaff and can cut down on the number of individual showings you’d otherwise need to schedule. But don’t put all your eggs in the open house basket; it is less a strategy to attract potential buyers to your home, and more a way for your real estate agent to drum up new clients.
Sure, the agent will tell all comers about the advantages of your property. However, if a buyer visits your home but discovers a dealbreaker — not enough bedrooms, say — rest assured that your agent is going to whip out her business card faster than you can say “location, location, location” and mention a few listings that might be more appropriate.
This isn’t to say that open houses never lead to sales, but know that the agent likely has an ulterior motive is hosting one.
The FSBO Route Is Often the Most Lucrative
You have no doubt seen the words “for sale by owner” on a yard sign or an online listing. Often abbreviated to FSBO, this approach may be more effective, at least financially, than going through a real estate agent. Several studies have found that not only do FSBO sellers get their asking price more often than those who enlist professional help, but they also, of course, pocket even more of that money because they don’t have to pay the agent’s commission. The standard fee is 6% of the total sale price, so if your house sells for $200,000, that’s an extra $12K to do with what you wish.
One drawback of trying the FBSO technique? The entire process tends to take longer than if you secured the services of a real estate agent. Many people might be just fine playing this waiting game, while others find a quicker sale to be worth the lowered dollar amount. It just depends on your situation and priorities.
It’s Not Necessary to Renovate or Redecorate
The internet is chock-full of articles and infographics discussing the ROI of various home-improvement endeavors and what renovations you have to make in order to sell your home. But they are talking about selling to another buyer. Naturally, if you are trying to attract a couple or family to purchase your home, presenting it in the best possible light is always the best approach. But there’s another option.
“If a house needs serious repairs — if it’s contaminated with mold, has been through a fire, was occupied by a hoarder, or is just plain old falling apart at the seams, consider selling it for cash,” advises Mark MacFarlane of OutFactors, which buys all manner of dilapidated or even dangerous properties.
Commission Is Negotiable
That six-percent commission is touted at being standard, but there’s no agency or mandate making it inviolable. Rather, agents have a lot of autonomy in setting their own commission, which means you should absolutely attempt to haggle with them.
Of course, no self-respecting real estate agent is going to accept an absurdly low commission, but if the property value is nearing the million-dollar mark, a reduction by one percentage point is definitely achievable. It also helps if the home is going to be an easy sell. At any rate, it’s worth a shot. The worst thing that will happen is the agent laughing at you before insisting that you pay the full 6%. If you are really serious about negotiating a lower fee, shop around.
Whether to use an agent or tackle the selling process on your own is a difficult decision, and there are no set guidelines to follow. You will have to weigh the pros and cons for yourself and then take a leap of faith. If the method you choose doesn’t succeed right away, you always have the option of going down the other road.
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