Why 'For Sale by Owner' Doesn't Save you the Commission
Since hiring a professional real estate agent to sell a home became a popular, sellers have been trying to sell their homes themselves to save the commissions that agents charge.
In many situations, a full time real estate agent will charge a 6% commission as a brokerage fee to assist a homeowner in selling their home. Brokers often make an offer of half of their listed commission to other real estate agents to bring their buyers and ultimately purchase the home.
But do homeowners really save the 6% commission?
A seller must put themselves in a buyer's shoes to fully understand the big picture. A home buyer who sees the "For Sale By Owner" sign in the yard, they too understand that the home seller is not paying a commission to an agent. The buyer feels like since there is no commission being paid that they too can save some money if they purchase this home. Both parties can't save 6% commission so usually the buyer and seller end up negotiating for the savings.
Experience and Costly Mistakes
Homeowners likely sell a home 6 or 7 times in their lifetime. A good professional real estate agent sells somewhere around 30-50 houses per year. The average homeowner will make mistakes that a professional will not make. Lack of experience with negotiations, inspections, title issues, qualifying the buyer, and other hurdles can certainly cost the seller thousands.
Maximum Exposure & Time = Money
Real estate professionals have tools at their disposal such as the MLS (multiple listing service) and other technological marketing tools to generate traffic to your home. What's more is that agents have relationships with other agents in the market that represent buyers who may be interested in a home like yours.
Having these tools, agents are likely to sell your home much faster than you may be able to. Some FSBOs might say "So what? I don't have to sell fast to get top dollar." Math doesn't lie. If you have a mortgage on a home, you make an interest payment on your home mortgage. Interest is the cost of borrowing money and a cost that you cannot get back. Every month that goes by that you do not sell your home, you pay added interest that you will never see back.
The average days on market for a good agent are under 30 days, therefore a good agent will have your home sold and you can save added interest on your mortgage. FSBOs usually try to market their home themselves for 30-60 days before listing with an agent. By waiting, the homeowner has lost whatever interest they have paid on the mortgage.
So what should a homeowner do?
It is a difficult concept to grasp. It is easy to think that not paying a commission will save you more money than you can make on your own. However, less than 3% of homeowners are able to sell their home without the help of a real estate agent and 85% of FSBOs eventually list and sell with a Realtor.
A smart homeowner will find a fantastic Realtor that sells at least 40+ houses per year and has experience in the area where their home is. Interview this agent and ask difficult questions about what will that agent do to get the home sold. Work on a detailed plan to market and sell the home with the agent and listen to their advice when they give it to you.
If you are looking for the right agent to call, my contact information is below. Together, we can discuss the marketing plan that will get your home sold and you moved on to your new home.
Aaron Smith
Greater Cincy Homes
859-360-9997
greatercincyhomes.net
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