List with An Agent or FSBO?
Once you have committed to selling your home, the next decision to make is whether to hire a real estate agent or to sell the property without professional assistance.
• Thanks to improvements in technology and MLS Listing Only Services that allow sellers to list their property in the MLS without having to hire an agent, some sellers are foregoing the traditional route and choosing to sell on their own.
• While we think that sellers who have the time and knowledge to sell on their own should, many sellers do not have the requisite time or knowledge to sell without professional assistance. Sellers who have previously sold a home are normally better equipped than those who have not sold a home before. However, even for sellers that have the knowledge, most do not have the time needed to arrange for midweek showings, draft contracts, arrange for inspections and the like. Ultimately the question is one of balancing the potential benefits of hiring an agent versus the costs.
When making the decision on whether to hire an agent it is important to understand the purpose of the agent:
• There is great misperception in the public that certain real estate agents can sell homes more quickly than others. There is no empirical data to support this proposition. Instead the data supports the proposition that homes that are priced appropriately sell quicker than those that are not priced appropriately.
• Instead of getting your home sold more quickly, the true role of a real estate agent is to be an advisor. The agent's role is to provide guidance to help you get your home sold more quickly and easily. The most essential guidance is being honest as to the appropriate price range of the home.
• Some agents will attempt to solicit your business by trying to "buy your listing." An agent that tries to buy your listing will tell you that your home is worth an unrealistically high price. The agent is pretty confident that they will likely be advising you to lower the price dramatically in the future. From the agent's perspective, if they can get their foot in the door then you will not switch agents down the road when they advise you to lower the price. While buying a listing is a violation of an agent's fiduciary duties to a seller, some agents still engage in this practice.
• Because some agents still engage in the process of buying listings, it is important to get price recommendations from more than one agent.
• In addition to guidance regarding price, a real estate agent's role is to guide you through the sale of the home. Look for an agent that has experience in areas other than real estate sales, such as agents in this firm who have experience in practicing law, providing investment advice, or in managing properties. These broader experiences will help provide insight and distinguish the services of one agent from another.
• Finally, you should ask agents about their fees. While most firms still charge a 5-6% commission, Flat Fee charges a simple flat fee and may save you considerable money in the long run.