When you want to sell your home, there are some decisions to make. You can hire a selling agent or sell the home on your own. There are pros and cons to each option. Some of the factors to consider are discussed here below.
Working With a Realtor
If you hire a real estate agent, you will be required to sign a listing agreement for a period of time. The realtor will help you with staging and decorating your home, setting an appropriate price, advertising, and showing your home, including open houses. Your realtor will prepare the MLS (Multiple Listing System) advertisement, a property feature sheet and possibly a booklet of photos and upgrades. Your agent will also negotiate with potential buyers and their agents on your behalf.
If you opt to hire a realtor, you will need to sign a Listing Agreement. A Listing Agreement is a legal document that sets out the terms of agreement between you and the realtor, including the commission on the selling price and the length of the listing period. The commission is usually split equally between the seller’s and buyer’s agent, and each agent must usually split their portion with their respective agencies. Be aware of any “holdover” clauses where you have to pay commission even if you sell your home after the Listing Agreement expires.
Selling On Your Own
If you are thinking about going “For Sale by Owner” (FSBO) and bypassing realtor fees, you will need to select a do-it-yourself marketing service and handle a lot on your own. You will need to prepare the home (with repairs, decluttering and staging), take the photos or arrange for them to be taken professionally and the write the listing yourself. You will also need to be available frequently to show the home yourself and bear criticism about your home’s shortcomings. This can be difficult emotionally and is an often overlooked aspect in the decision about how you choose to sell your home.
You will also need to take charge of the sales and marketing responsibilities. You can gain exposure to buyers on the MLS system, which will provide significant exposure. However, your listing won’t have the name of a reputable real estate firm attached to it and it won’t have access to the same advertising sources that a realtor can offer online, in the newspapers, on billboards, and other means out in the community, including a network of potential buyers. Further, realtors often stay clear of FSBO listings when the see them, concerned about their ability to secure a commission from a deal.
There is also still somewhat of a stigma against FSBO listings by realtors and buyers alike who are wary about the owner’s unwillingness to hire a professional service, especially with their inexperience in the market. FSBO sellers can avoid the common mistake of pricing their home too high by researching the final sales price of similar properties in the area. Paying for a certified licenced appraisal can also help a homeowner to come up with a realistic sales price on the market. Further, as more homeowners opt to sell using the FSBO means, public perceptions about selling on your own will improve further.
Another aspect to consider is the legal responsibility involved in selling your home, which is likely your largest asset. You will need to deal directly with the buyer or work with a buyer’s agent with respect to the Agreement of Purchase of Sale. You will need to be able to screen a potential buyer’s ability to come up with the necessary funds. Asking for a pre-approval letter from a reputable lender can provide you with some comfort about the buyer’s ability to come up with the funds at the closing.
