Should I Hire a Realtor® or Sell My House on My Own?
If you are getting ready to sell your house, this is a question that will inevitably cross your mind. It’s a good question to ask. Unless you are in a rush to sell because of financial distress, legal issues or other personal reasons (divorce, job relocation, unwanted inheritance, etc.), the goal of your home sale is to walk away with as much profit as possible.
You are then faced with financial decisions to make. Do you want to hire a real estate agent and pay their commission fees? Will you make more money with professional representation or are they simply eating into your profits? Can I sell my house on my own?
Advantages of Hiring a Real Estate Agent
In general, research shows that houses sold on the open market will fetch higher offers. In addition, houses sold with the aide of a Realtor® also sell for more on average compared to those sold “For Sale By Owner” (FSBO). This means you are likely to get a higher selling price by hiring a real estate agent and going through all the recommended preparation, staging, marketing and negotiation processes.
The question then becomes how much more money will you get? You have to determine if that higher sales price will justify the hiring of a real estate professional. For example, let’s say you sell your house for $300,000 after hiring a real estate agent. You have agreed to pay them 2% commission, which adds up to $6,000 off the top. This means you walk away with $294,000 minus any other closing costs, fees and whatever you may still owe on your mortgage loan.
In a different scenario, you decide to sell the house on your own without a Realtor®. You end up spending $2,000 out of pocket on marketing costs (advertising on an online listing service, in the local classifieds, yard signage and homemade property information flyers). You end up accepting an offer of $295,000 and closing the deal. After your marketing costs, you walk away with $293,000 (again minus any additional closing costs, fees and mortgage loan payoff).
Generally speaking, homes listed on the MLS and professionally marketed/promoted by an experienced real estate agent will sell for higher prices. The transactions usually go faster, as well, unless you happen to make a cash deal with your FSBO sale. However, you can usually expect an even lower price for any cash offers because of the positive trade-offs (quicker and simpler closing process).
So, in our scenarios above, you actually walk away with $1,000 less profit and you likely took a little longer to sell if you went FSBO. This means additional ongoing homeownership costs such as utilities, mortgage payments, insurance, property taxes, HOA dues, etc. Plus, you probably had to put in a lot more work to market the house and get the deal done. A good real estate agent should help you make a more money. They should also make the process go smoother because they know how to navigate all the different parts of the real estate process. Having a Realtor® on your side can reduce the headaches and, in most cases, can net you more value. A good agent essentially pays for him or herself!
Unless you have experience selling your own houses, you may want to opt for hiring a real estate agent rather than doing it all by yourself.
Considering a Cash Home Sale
Now, let’s briefly circle back to the other scenarios we mentioned at the beginning of the article. You may be in a situation where you want/need to sell as quickly as possible. You may be better off taking a lower sales price in order to get out from under the financial burden of the process sooner. You don’t have the time, patience or extra cash to go through a traditional home sale. FSBO sales and traditional real estate agent transactions typically take months to complete.
You may be in a position where a cash deal with a local real estate investor is your best possible solution. You won’t get as high a sales price, but you can complete the transaction in weeks rather than months. In some cases, you may even come out further ahead when you factor in the fees, ongoing homeownership expenses and other closing costs associated with a traditional sale. A real estate investor (or an investment network like PropertyLark) will buy your house in as-is condition. Your closing costs will be covered and you can move out quickly with cash in your hand to pay off lingering debts or tax bills. Or, if you already own the property outright, you’ll walk away with the cash and a lot fewer headaches!
The right way to sell your house depends on a number of different factors and personal preferences. What may be best for you may not be the best solution for someone else. Every seller is unique. Each homeowner’s situation is different. As a home seller, you should understand your options and decide what will be best for you.
PropertyLark is here to help. We’ll be glad to make you a fair all-cash offer for your house, or we can help you with any type of real estate sale. We have a network of real estate investors and real estate agents, and we’ll find the ideal solution for your specific situation. Contact us today to get started.