Many people contemplate whether they should sell their home by owner or hire a Listing Agent. This blog isn’t meant to discourage those who choose to sell by owner, but rather, to illustrate the benefits of using a Listing Agent. Selling by owner is absolutely possible, but much harder. For Sale By Owner (FSBO) transactions make up an extremely small percentage of total real estate sales. If you do choose to sell by owner, feel free to give me a call with questions, and I will be happy to do what I can to help you out. However, I hope you’ll read this post and understand a little more about what Listing Agents do and consider hiring one.
Before going to deep, I want to make an important distinction. This article talks a lot about Listing Agents. Listing Agent is merely a role in the transaction. In every real estate transaction involving a real estate agent, there will be a listing agent, and the vast majority will also involve a buyer’s agent. Most real estate agents actively play both roles, depending on the transaction. However, it is rare and generally ill-advised for an agent to work as both a listing agent and buyer’s agent (also known as dual agency) in the same transaction. It is also wise to avoid this scenario as a party to the transaction, particularly for the buyer.
With that said, let’s dive right in.
1. A good Listing Agent will get you a higher price:
2012 statistics show that the average sale price of homes listed by Realtors was 19% higher than those sold by owner. This translated into $27,200 in extra profit for sellers who listed with a real estate agent (and that’s using a standard 6% commission. If this were my client, the profit would have been over $30,000).
2. A good Listing Agent is more likely to get it sold:
A 2005 study showed that 87% of For Sale By Owner listings either don’t sell or ultimately list with a Realtor. I can’t help but wonder how many of these people cost themselves money by trying to sell all summer, only to miss the hot market and sell in the fall or winter after the market cooled down for the season. If you really want to move, using a Realtor is the way to go.
3. A good Listing Agent connects you to the Multiple Listing Service:
The MLS is simply the most powerful sales tool in existence. It connects your property to thousands of real estate agents with interested buyers. No other used product has a centralized database of inventory quite like the MLS. Quite simply, it is where ALL of the buyers are. Sure, there may be buyers looking at For Sale By Owner sites, but they represent a very small fraction of the total pool of buyers, and those buyers are also looking for properties on the MLS.
4. A good Listing Agent will have a professional pricing strategy:
Realtors have access to actual market statistics and the knowledge to understand how your specific home compares to the market. This means they can usually target the most precise value for your property. Additionally, they are not emotionally attached to the transaction, so they are able to be totally objective about how your house stacks up against the competition. Most homeowners either dramatically over or undervalue their home due to sentimental factors and misunderstandings or misinformation about the value of homes in their area.
5. A good Listing Agent is a professional negotiator:
Realtors negotiate deals daily and understand the methods that work, what contingencies or costs make sense, and so on. Additionally, a Realtor is not negotiating based on emotion, which allows them to find the best successful deal for their clients. They are also trained in keeping information confidential in order to avoid betraying their bargaining position. Finally, because we did extensive research prior to pricing the home, we will know what an appropriate price is, and if necessary, will revisit our research in order to make sure it is still valid. Someone selling by owner is at a great disadvantage when it comes to negotiating, especially after their house has been on the market for a month or more.
6. A good Listing Agent will have a marketing plan:
A good Listing Agent will have a comprehensive plan to market your home. This marketing plan will include such things as social network marketing, advertising, direct mail campaigns to your neighborhood, open houses, fact sheets (paper or virtual), and could include many other methods. Chances are you can do the same things they would, but most For Sale By Owner’s don’t. The typical For Sale By Owner person will list their property on 1 or 2 websites, make a Facebook post or two about their property, and put a sign in their yard. Ongoing marketing usually gets forgotten since selling their home is a lower priority than their jobs, their families, and their social lives.
7. A good Listing Agent has tools to aid in the transaction:
They have organization systems to keep track of paperwork, vital dates and deadlines, repair estimates, etc. They have technology that allows for digital signatures in order to expedite the mountain of paperwork a real estate transaction can create. They have electronic lock boxes which provide a secure way to show your home. They have access to countless websites and virtual tours to market your home. They can use a scheduling service to keep amazing records of who has shown your home and when, and get feedback on those showings, and so on. Most of these tools simply aren’t available to a For Sale By Owner listing.
8. A good Listing Agent brings you a network of qualified professionals:
Since your Listing Agent sells multiple homes per year, it makes sense that they would know the good lenders, appraisers, inspectors, repair people, and other professionals you may need. These people can make or break a transaction. Since a For Sale By Owner isn’t actively involved in the industry, it is highly unlikely that you will have knowledge about quality resources in any of these areas. Again, you can lean on our experience, rather than venturing out into the cold night alone.
9. A good Listing Agent eliminates errors in the transaction:
Realtors are specially trained to understand state and federal laws, as well as to prepare and execute legal sales contracts. Additionally, we become very adept at recognizing potential problems, monitoring timelines, and ensuring that our clients remain protected as best as possible in a transaction. Many For Sale By Owner transactions have significant errors or ambiguity in their paperwork which could result in a lawsuit, and many others fall apart needlessly because of the inexperience of both buyer and seller in resolving what are often minor issues.
10. A good Listing Agent gives you someone to answer questions after closing:
Virtually every client I have ever worked with me has followed up a few months or even a few years later with questions about their transaction. This could be a need to locate paperwork they have lost, a question about their property taxes (or a tax valuation dispute. I do a LOT of those) or other issues, or even in rare cases, an attempt to locate the previous owner (that’s you!) in order to return a valuable item left behind. We have all seen news stories about someone who found $10,000 in the wall of their home, but we don’t hear about the countless times when a new owner gets your car title in the mail or finds your power drill left behind with the leftover paint in the garage.
11.Listing your home ends unwanted contacts:
When you list as a For Sale By Owner, you will spend a lot of time answering calls from real estate agents who want to sell your property, buyers who are not qualified or are only casually looking, scam artists, and so on.. In fact, MOST of the calls you will receive as a For Sale By Owner are going to be from someone who is not truly interested in buying your house. Listing with a good Listing Agent will end all of that wasted time.
In the end, it all boils down to experience. Henry Ford once said “I am not the smartest, but I surround myself with competent people.” Red Adair once said “If you think it is expensive to hire a professional to do a job, wait until you hire an amateur.” Both of these men clearly believed that their time was better spent doing the things they excelled at, and outsourcing the things they did not. The same applies to real estate. Whether you are a teacher, a plumber, an investment banker, or a salesman, you’re probably an amateur at selling real estate. Given that, doesn’t it make sense to hire a professional to handle your biggest investment?