What are the benefits of each?
To be truthful, I always thought I’d sell my home as a For Sale By Owner, FSBO, just to save the money. I mean 6% to sell your house really cuts into the profit, right? Or, so I thought. As it turns out, in the long run, you stand to gain a substantial amount of money if you are Using Your Home as an Investment . Check out my blog on that if you get a moment.
As promised, I will discuss the benefits of having a real estate agent and the benefits of selling your home on your own. Where shall we begin? First, I’m going to tell you why I’m qualified to speak on this topic. I am now a real estate agent. By my own confession, I thought I would always choose to do a FSBO transaction upon deciding to sell my home, however, now I’m completely convinced this idea is not the best choice. In my time as an agent, I’ve seen some really promising sales go south quickly. In fact, I had a really bad week where I had 3 contracts fall through in two days. I’ve written on it before and probably will again. Not because I’m trying to repeat myself constantly but, the enormity of experience that comes with that set of circumstances is inconceivable to most. I’m not sure if any of you are experienced real estate agents or if you’re just interested in real estate in general and happened upon this blog but, I do know that unless you’ve experienced something first hand you don’t usually know how to navigate it. Well, now I can say that I have experienced it and I can navigate it for you or for myself. That is just one reason you might choose to hire an agent.
Food For Thought
Who is the authority on home sales? You, who works as a nurse, doctor, plumber, fireman or engineer? Or me, who works full-time selling houses? I can assure you that there is a huge learning curve in this business. There is a reason that a real estate license is required and it’s because there is a whole lot on the line.
A Few Good Reasons
Now, you may have tried and succeeded at selling your home on your own and it is entirely possible but, let’s establish one thing. You are not even remotely considering the legal ramifications of this transaction should it end in litigation. If you are an attorney, you may want to try to sell your own home otherwise, leave it to a professional. As with any other profession that involves financial risk, we carry insurance for that. Here is another thing you may want to consider. Real estate agents are usually backed by a brokerage whose broker in charge also has insurance and who is ultimately responsible for making sure that your agent is doing exactly as he or she should be doing. Let’s face it, there are always some rotten apples in the bunch but, the choice is yours. Choose a reputable firm who has been around for a while. It is my opinion that you reconsider hiring anyone who works for a mom and pop brokerage. These are easily identified by the use of the person’s name such as “Mike Jones Realty” or even “your city realty.” Why? Because they may or may not have regular training for the agents or worse, they may not have a mandatory insurance provision for their agents. You just don’t know what you’re getting. I’ll give you an example. I recently tried to purchase a home for investment for myself. I was acting as my own agent however, the agent for the seller was acting as some sort of agent / broker hybrid. I mean she was affiliated with a large brokerage but, she was not identifying herself as an agent for them. I know that’s confusing and that’s exactly what I’m talking about. What are you and who do you work for? This sale never came to fruition. Not because of me but, because of her. She never answered her phone and I do mean that quite literally. She would text you all day long in short-hand with misspelled words but, to get a phone conversation out of her was practically impossible. I was a cash buyer in this transaction. There were few if any hang-ups but, it did not close after, get this, five months of trying. I’m over it but, boy was it a major thorn in my side trying to negotiate a deal with this person. I want to tell you that she did work for a major national brokerage. When I couldn’t get her to answer, I called her brokerage house with the initials KW and don’t you know I got the same treatment from them. The BIC, broker in charge, did not return my 3-4 phone calls and numerous emails for about 3 weeks. I’m not exaggerating. There was no accountability in their firm. Be careful of that. If your agent stinks and sometimes that is the case, make sure you know who their supervisor is.
Century 21 Expert Advisors
In my firm, we have an exceptional training program and it is headed up by a woman who spent most of her career training real estate agents. She’s knowledgeable and has had first-hand experience as an agent herself. She also holds a brokers license though she is not our official broker in charge. We are encouraged to attend training camps weekly and take extra time to advance our market knowledge. We have countless tools available online to enhance our business as well as some materials in-house should you prefer a hard copy. I really can’t say enough about Century 21 Expert Advisors in Charleston, South Carolina. We are part of a group of agencies which include Century 21 The Harrelson Group in Myrtle Beach, South Carolina. I mention this because we are the top sales agency in the state. The man who owns our franchise is Greg Harrelson. He is always personally available and he’s made it his priority to train the agents who work for him through whatever means necessary. The best part is that they really do make it feel like it’s a team effort and that we are part of the family. I mean I know it sounds cliché and all but, I have a genuinely good relationship with each person and all of them are hard-working, caring individuals who are friendly and helpful to one another. That’s about as good as it gets in the workplace. Am I correct? It’s a great place to work if you’re looking for an agency to call home.
Fast And Furious Negotiations
There is one more thing that I’d like to mention. Unless you were born in a country where bartering and trading were the norm, most people are very uncomfortable negotiating. Here is a quick example. In it, you are the seller. You have a house that you are trying to sell for $200K. The person who wants to buy your house is working with an agent and they make a really low offer. Let’s say they offer you $150K. What do you do? You could say no and stop the negotiation all together or you could make a counter offer but, what should it be? Is this person a cash buyer or do they need financing? What kind of financing are they getting and how long will it take to close. When was the last time you had an inspection done on your property? Do you know if there are any material defects? Did you know it’s commonplace to renegotiate again after the inspection takes place? Do you know what your responsibilities are legally if there is an inspection and the deal falls through? Do you know why that matters? I do. And I know how to navigate those waters, so to speak. Another thing and I’m not usually one to toot my own horn but, I’m an excellent negotiator. I’m guessing your full-time job doesn’t require you to negotiate even a small percentage of the time but, mine does on a daily basis. Do you as a FSBO seller want to negotiate with me? Wouldn’t you presume that you’re chances of winning this negotiation are pretty small if we go toe to toe? On the other hand, if you have an agent representing you, you have someone who knows the ins and outs of this dance. They may not be as good as I am but, your chances of coming to a more concrete, fair price are exponentially higher when you remove yourself from the equation. Why? Because negotiation is wrought with emotion. You think your house is worth more than it actually is because you’ve become sentimentally attached to it. Your real estate agent knows the true value and can more easily come to terms on that front while effectually explaining that to you. It’s not a place you want to find yourself without representation my friend. Just sayin’.
To recap, the benefits of hiring an agent are minimally these:
Experience, experience and experience
Legal accountability and insurance
Ongoing training and development
Expert negotiating techniques
Now then, what are the benefits of selling your home as a For Sale By Owner? There are a few and here is what I have personally experienced. The most obvious one is that you could end up with more money in your pocket though it’s certainly not a guarantee. In fact, studies show that FSBO sales are notoriously low as compared to agent represented sales. See the information below.
I’m Giving You The Benefit Of The Doubt
But, for the purpose of this discussion, let’s assume you do end up with a few more dollars in your pocket. What else is beneficial to a FSBO seller? You could consider it a benefit that you are personally responsible for the marketing and advertising of your home or that you are perhaps more reliable than an agent with respect to being available for showings. That is unless you work full-time. Did you know that most showings happen during the week as opposed to the weekends? As well, they are normally scheduled during the day from 10am to 5pm. Maybe you work from home and this is perfect for you.
The Multiple Offer Conundrum
Another thing I’d like to mention is that this is a really hot market and if you live in Charleston, South Carolina or the surrounding areas, you could potentially get multiple offers on your property especially if it is priced below the $350K mark. Great problem to have right? Yes. If you know how to handle this matter legally. Let’s say you look that up online and feel confident that you could manage your obligations as the seller. That could be a benefit I suppose.
Let’s face it, I went into this with the proposition that there were benefits to each of these scenarios. If you are not convinced that the benefits of having an agent far outweigh the drawbacks, you may need to reconsider your position. I have only touched on a few things that real estate agents do in this blog. You would be amazed at the actual list of things an agent can be responsible for. For now, I’m just going to say this. Should you decide to sell your home on your own, I wish you the best of luck. However, if you’re in the market for a great real estate agent, give me a call. I might just know someone who can help you. Wink. Nod.