Is It Worth The Money To Pay A Real Estate Commission?
The answer to the title's question depends on how big of a return you want on your investment. If you're looking to save money by not hiring a listing and marketing agent, the return is going to be low. However, if you want to get the best price for your property, you ought to think seriously about bringing in a professional. The reason is because a good real estate agent will pay for him or herself.
It's the thought of paying thousands of dollars to someone to facilitate what seems like a simple transaction that's the biggest mental barrier. How hard can it be to sell a home? You put an ad in the paper, maybe even pay a fee to be listed on a FSBO or For Sale By Owner site, clean from top-to-bottom, plant some colorful flowers, and take great pictures. That's all that goes into it, right?
Wrong. You're likely to make several mistakes along the way, not to mention the fact you're home won't be listed in the MLS, which will make your home quite hard to find. If you don't think so, ask yourself how buyers' agents will find your home. Sure, they might come across an ad you placed, even drive by your home. They'll keep on driving because they know it's not worth the time and effort to show your property to their qualified buyers.
What Real Estate Agents Do and You Don't
It's not enough to base your asking price on those homes down the block, even if they are nearly identical to yours. The reason is simple and cannot be dismissed--those houses have not yet sold. Not only will you need truly comparable properties, you'll also need to know the value of any improvements or customized features.
Think that hot tub is a great selling feature? It isn't because buyers will see it as a germ incubator, not a relaxation oasis. How about that bedroom that you turned into a wonderful media room? Sorry again, there's practically no return on investment there because buyers don't like rooms to be used for anything other than intended.
A typical property owner does not have anywhere near the home-selling experience of a real-estate agent. Agents can recommend relatively simple improvements — painting, repairing, decluttering — that can help a home sell faster and for a better price. --MSN Real Estate
Now, let's get into the marketing aspect. Do you really have time to show your home to someone ready to buy in the middle of your day? How many people do you know that are in the market to purchase a home? How many real estate professionals are combing through the MLS looking for a home for their buyers that's just like yours?
Real estate brokers and agents have an extensive network. They have an enormous audience to broadcast to and also have preferred vendors to help get the homes they list into salable shape. These networks span not only across city boundaries, but also across nearby counties, throughout the state, and even nationally. What's more, these professionals market homes internationally, particularly to qualified, affluent property investors.
Offsetting the Cost of the Home Sales Commission
If you truly want to save money when selling your home, there are ways to pay less out and still get a healthy return on investment. Studies show that homeowners who go it alone don't get their asking price. What they would have paid in commission goes to paying a real estate attorney to draft the purchase contract, the cost of advertising, as well as researching mortgage, loan, and lien documents.
Should you still be undeterred and are sticking to the fact you really believe that you'll be saving a lot of money, there are ways to either save outright or offset the expense of paying a commission:
- Negotiate the sales commission. If you are in an upscale neighborhood and live in a luxury home, then it's more probable the agent will be open to a lower percentage. Some agents will trade a little money to get a branding tool, which is to say your home. However, don't make the mistake of tying to lowball because that will most likely backfire.
- Have your home staged by a professional. Okay, so you're probably wondering how paying out more will save you money. That's a natural reaction, but it's true. Professionally staged homes sell for 17 percent more on average. With a bigger return, you'll be able to comfortably afford the real estate commission.
- Pay a la carte for select services. Some brokerages and agents will offer select services, which you pay for a la carte. This will save you money, but be careful, because what you're saving in one place, you're losing in another.
The bottom line is, you wouldn't trust yourself to handle a legal matter, that's for an attorney, this is simply no different.