Real estate is one of the largest investments a person makes, and it goes without saying that sellers want to get the best sale price possible. One of the expenses associated with selling a property, and one that can eat up profits, is the real estate agent's commission. While there are certainly many instances where a real estate agent's expertise more than earns the commission, there are other times when a real estate transaction may be able to get by without an agent's involvement. You may not need a real estate agent if the following situations apply to you.
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- You have the time and effort to devote to the sale.
Selling a property takes a lot of time and effort, and here is another area where an agent can really earn his or her commission. Marketing, showing and responding to questions about the property can become a full-time job. A real estate agent may be able to sell your property faster. He or she may already have a file of people who are looking for a property like yours. In addition, the agent can quickly list your property with a multiple listing service (MLS) that can greatly increase the property's exposure on the market. The agent may network with other agents to find out if they have potential buyers for the property. They will include the property on the company's website and advertise in a variety of channels.
That being said, if you've got the time (and this is how you want to spend it) you can certainly venture out on your own. Create your own listing on websites that specialize in FSBOs - for sale by owner. Popular websites today include www.forsalebyowner.com and www.ListByOwnerInMLS.com, which allows your property to be entered into the MLS for a fee. You can also enlist the services of a fee-based web marketer such as www.vflyer.com that can create and distribute online ads or "virtual flyers" that can be added to online classified markets such as www.craigslist.org. (Learn more about what a real estate agent does in Do You Need A Real Estate Agent?)
- You are familiar with real estate procedures and contracts.
While most real estate agents are not lawyers, they do provide guidance and direction in making sure that all of the proper paperwork has been completed. Most agents are experienced in what documents are required - and when, where and by whom they must be filed. Even with an agent, however, you will still need to retain a lawyer to handle the legal documentation. If you are familiar with real estate transactions, you can, with the help of a lawyer, complete all the necessary paperwork without the assistance of a real estate agent.
A real estate agent can also help you set a reasonable asking price for your home based on comparables in the area. You could instead pay a real estate appraiser to do this; typically this service costs about $200 and the appraiser will provide a fair market price for the property.
- You will be available to show the property.
One of the things that you are paying for through a real estate agent's commission is convenience. The agent must be available to show potential buyers the property, or can arrange a lock box containing keys to the property so that buyers can view the property on their own. The agent will ask to see identification and will document who viewed the property and when.
Many buyers look at dozens of properties before making a decision, and if your property isn't easy to view (i.e. you are not freely available to show the property) the potential buyer will probably move on to the next home on the list. However, if you are frequently home - if you work from home, are a stay-at-home parent or are otherwise a homebody - you may be able to make this work. (For more on going it alone, read 7 Things To Consider Before Selling Your Own Home.)
- You are a savvy marketer.
While we have all cringed at some real estate agents' listing descriptions - think "quaint bungalow needs a little TLC" - most do provide the positive spin a property needs to attract potential buyers. They know the current market, what elements of a property are the "hot topics" and what homebuyers are looking for now. In short, they know what sells and they know the lingo. In addition to the property's description, an agent can provide a host of marketing venues to get the word out.
Can you do the same? You bet, especially if you have a little marketing savvy and internet know-how. Listing your property on FSBO websites is a sound choice, and a perfect write-up and professional looking photos will set you apart from the masses who list on these sites. Additionally, a website dedicated to your property can assist in attracting potential buyers, especially if it includes a virtual tour of the property and other useful information such as details on nearby schools and hospitals. A domain name can be purchased for less than $10 per year and typically comes with website templates that you can customize to showcase your property. You can also place ads in local newspapers and put a brochure box at the property containing a detailed flyer. (To learn more, read Cut Commissions With "For Sale By Owner" Sales.)
The Bottom Line
Deciding to go without an agent can be daunting; however, many people find it is worth the extra effort to try to secure a larger profit. Keep in mind making the decision to sell your own property without a real estate agent's assistance is not set in stone. You can choose a date in the future where, if you have not been successful, you can hire an agent to do the selling. If you have the time, energy and enthusiasm to put into selling your property, you may not need a real estate agent.
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