Select a Real Estate Agent

While there are many things you need to think about, one of the most important things you can do as you start the process of selling your home is finding a proven and experienced real estate agent. A professional real estate agent who is good at what they do is going to have a deep understanding of your local market and what buyers in your area are looking for. Selecting a good real estate agent early will help you effectively plan on the best things you can do to appeal to the local home buyers and maximize your home sale price by getting more interested buyers and making sure you have the features people are looking for.

REASONS TO USE A REAL ESTATE AGENT

If you’re extra budget conscious, you might be thinking about selling your home on your own. Before you make a final decision on whether you will use a real estate agent or not – you should consider a few things first.

COMMISSION COSTS

When you crunch the numbers, remember that you can always save money by not using a real estate agent on your end – but if a buyer comes in with an agent – you will be obligated to pay their commission. So, for instance a typical agent will require a 3% commission – so if you don’t use an agent, but your buyers have an agent, you would save 3% ior 6% if they don’t have an agent. So, when you’re considering the cost of using a listing agent – keep in mind that (conservatively) it will be about 3% of the total purchase price.

YOUR TIME COMES AT A PRICE

Fundamentally, you could probably FSBO easily in a seller’s market in the summer – when the conditions are perfect, without much effort. But, like most situations – there are usually challenges to overcome. Not to mention, if you work full-time – you have to be realistic about how much time selling your home could take away from your work or family. Marketing and showing your home alone are huge time-sucks, which can be avoided for a 3% commission. Do the math and figure out what your time is worth – then calculate how many hours you might need to put against selling your home in order to justify the use of an agent.

OTHER COSTS WHEN FSBO

If you decide to go the FSBO route, take into account the extra things you might have to pay for: ·MLS listing fees ·Professional pictures or video of your home ·Home sale and open house signs ·Lawyer fees to review contracts ·Time off for home showings ·Staging advice ·Storage fees (for staging) ·Home buying agent commission fees ·Extra incentives for buying agents

AGENTS HAVE CONNECTIONS

If you live in a small or big town – agents talk. This is one of the benefits of using an agent – they will use all of their networks, referral groups, Web tools and connections in order to market your home. Agents have access to the MLS, which is the number one home sale site. They also have connections with ancillary service providers that could market your home better including – photographers, home stagers, storage providers, etc.

HOW REAL ESTATE COMMISSION WORKS

When deciding whether to use a real estate agent, it’s important to understand how their commission structure works.

The Basics

Most real estate agents work for a broker. The commission that is made on a home transaction will typically pass through the broker and then the broker will pay the agent a percentage of that commission.

The commission percentage varies, but will typically be someplace in between 30 to 40 percent.

Listing Agent Commission

When a home is listed with a broker, a normal agreement would assume that the agent has exclusive rights to sell the home. When an offer comes through, the seller agrees to pay a percentage of the home sale value to the broker. Typically that commission will be split between the listing agent and the buying agent.

It’s not always a 50/50 split between the buying and listing agent. The spilt may be determined by the climate of the market.

Who Actually Pays the Commission?

Even though a buyer may perceive hiring a real estate agent as a “free” service, keep in mind that the commission is paid out of the final sales price (which includes the commission). So, you could argue that the buyer actually pays the commission to both the listing and buying agent.

If the seller doesn’t have a real estate agent and/or if the buyer doesn’t have a real estate agent – it’s safe to say the buyer would get a better deal on the house because the seller would not need to pay a commission out of the final sales price.

Can You Negotiate Commission?

Yes, you can always negotiate, but remember there is always a fair market rate. Offering a commission less than fair market rate could detract agents from showing your home.