Do you need a real estate agent to sell your home, or can you sell successfully without them? Here’s what you need to know.
In 2018, 5.96 million homes were sold in the U.S. The number of home sales has been on the rise, up from 4.57 million in 2011.
Are you planning to sell your home this year?
If you are, you may have a lot of questions. The first question many sellers ask is if they need a real estate agent to sell their home.
Let’s find out if it’s required, the benefits, and what alternatives there are.
Real Estate Law
Some people think they have to hire a real estate agent to sell their home. In reality, there is no law that requires you to hire one.
However, there are a lot of laws surrounding the transaction itself. Without the help of a professional, you would have to research them yourself.
Laws vary by state and even by county or municipality. For example, transfer taxes can vary significantly from one county to another in the same state. Ensuring proper compliance is no easy task.
Benefits of Using a Real Estate Agent to Sell Your House
While hiring an agent is not required, there are a few benefits of doing so. Let’s take a look at them here.
Higher Sale Price
A good real estate works hard to sell your home — and that work pays off. It is hard to make a direct comparison, but statistics from the National Association of Realtors indicate that homes sell for about a third more with the help of a realtor.
Pricing the home right is one of the most important factors when selling a home. Price it too high, and it will sit on the market for weeks. Buyers assume something is wrong with a home that sits for too long. This means that when you finally do get an offer, it will probably be lower than you want.
What if you price it too low? You may sell it quickly, but you’ll have cheated yourself out of a few thousand dollars.
You may not have sold many homes, but an experienced real estate agent certainly has. In a normal transaction, there are a million details that you have to handle.
However, nearly every transaction has things that pop up. The buyer requests a credit for repairs the home needs, the appraisal comes in too low, or any of a thousand other details that can mess up the sale.
Your agent will probably have encountered this issue before. They’ll be able to advise you on the best way to handle it.
Your real estate agent can also advise you on how to prepare your home. Small things like colors of paint or ways of staging your home can have a big impact on the sale price.
They also have a list of professionals on hand. Throughout the process, you may need a photographer, home stager, cleaning company, contractor, real estate attorney and more to successfully complete the transaction. Instead of having to go looking for them yourself, your agent is ready with a recommendation of a reputable professional that’s perfect for the job.
Negotiations are a big part of real estate transactions. Virtually everything is negotiable from the sale price to who fixes what to the agent’s commission.
Most buyers take advantage of the services of a buyer’s agent. If you sell your home yourself, you’re pitting yourself against that experienced negotiator. Unless you’re an experienced negotiator yourself, you’ll end up with the short end of the stick.
Cons of Using an Agent
As with anything, there are also some reasons not to use an agent. Let’s look at them here.
Agents do a lot of work for you, but they don’t do it for free. You’ll have to pay a commission for their service.
The good news is that you don’t usually have to pay anything upfront, it comes out of the sale. The bad news is that it can be quite a chunk of your profits.
Agent commission is usually 6% of the sale price. On a $300,000 house, that is $18,000. Typically half goes to the seller’s agent and the other half to the buyer’s agent.
The traditional method of selling a home is not quick. It can take days, weeks, or even months to find a buyer.
Once you do it can take between 30-45 to close on the sale. Most of that time is due to waiting for the buyer’s lender to approve financing on the home.
If anything goes wrong, the deal can fall through and you’re back to looking for another buyer.
Alternatives to Using an Agent
There are a few alternatives to using an agent. You can try to sell the home yourself. This route usually involves a lot of stress, headaches, and you end up with a lower sale price than you could have.
An easier method is to sell to a cash buyer. It’s much faster than using an agent as you don’t have to go through all the rigamarole to find a buyer and they don’t have to wait for financing.
You’ll still get a bit less money for the sale, but you also won’t have to dump any money into repairs, cleaning, photography, and all the other expenses that come with preparing a home to show to buyers.
Selling Your Home Your Way
Basically, it comes down to your situation as to which method is best for you to use to sell your home. Using a real estate agent to sell your home is a good idea when you have time to spare and are aiming for the highest possible sale price.
If you prefer a more “hands-on” experience, you can try selling it yourself. Just be prepared for a lot of work. If you’re on a time limit and need to sell as quickly as possible, selling to a cash buyer is a great way to go.
Looking for more great real estate tips? Be sure to check out other posts on our blog.