Should You Hire A Broker?
Recently, NBC TV's "Today" show ran a feature on whether sellers should hire a real estate broker to sell their house or become an unrepresented seller -- better known as a FSBO, short for For Sale By Owner.
The reason for the story was that throughout the nation, real estate prices are softening and in many areas the prices are actually going down. On the surface, it would appear that if prices are going down sellers should try to sell without incurring the costs normally associated with a real estate broker in order to net the most money on the sale. Sure, that kinda sounds logical.
What the story on "Today" actually ended up pointing out was that if you want to sell your property for the most money in a softening market, you need to hire a full service, full commission real estate broker.
The program pointed out that the average unrepresented seller (FSBO) sells the property for an average of 10 to 18 percent less than he would receive from a professional real estate broker for a comparble property. So, if your property is listed for a real estate commission of from 5 to 7 percent (which is pretty standard in most markets these days), the real estate agent is likely going to sell your house for a net increase of from 5 to 11 percent more than what you will get for it on your own. So, even after paying the real estate commission, you'll put more money in your pocket by hiring a real estate broker to sell your house. Plus, the real estate agent is going to do all the work and pay for all the marketing costs associated with advertising your property.
The "Today" story featured a man who sold his house FSBO in something like 22 days in a slow market. They had sound bites of the seller bragging about how he saved over 20 thousand dollars by not paying a real estate commission. All three of the people doing the story -- the "Today" show host, the woman from the National Association of Realtors and the man who was president of "By Owner" realty -- pointed out that the seller most likely did not sell the house for its true market value if he sold it that quickly in a slow market. They were all in agreement that he did not get full value for his property.
Despite all the claims from people who have sold their homes as FSBO's, your chances of selling your house on your own as a way to net more money in a flat or falling market are very, very slim. Statistically, you'll net more money by selling your home through the services of a real estate broker. Real estate brokers have the tools, the negotiating skills, the experience and the overall know-how to make it happen for more money. Simple as that.
The reason for the story was that throughout the nation, real estate prices are softening and in many areas the prices are actually going down. On the surface, it would appear that if prices are going down sellers should try to sell without incurring the costs normally associated with a real estate broker in order to net the most money on the sale. Sure, that kinda sounds logical.
What the story on "Today" actually ended up pointing out was that if you want to sell your property for the most money in a softening market, you need to hire a full service, full commission real estate broker.
The program pointed out that the average unrepresented seller (FSBO) sells the property for an average of 10 to 18 percent less than he would receive from a professional real estate broker for a comparble property. So, if your property is listed for a real estate commission of from 5 to 7 percent (which is pretty standard in most markets these days), the real estate agent is likely going to sell your house for a net increase of from 5 to 11 percent more than what you will get for it on your own. So, even after paying the real estate commission, you'll put more money in your pocket by hiring a real estate broker to sell your house. Plus, the real estate agent is going to do all the work and pay for all the marketing costs associated with advertising your property.
The "Today" story featured a man who sold his house FSBO in something like 22 days in a slow market. They had sound bites of the seller bragging about how he saved over 20 thousand dollars by not paying a real estate commission. All three of the people doing the story -- the "Today" show host, the woman from the National Association of Realtors and the man who was president of "By Owner" realty -- pointed out that the seller most likely did not sell the house for its true market value if he sold it that quickly in a slow market. They were all in agreement that he did not get full value for his property.
Despite all the claims from people who have sold their homes as FSBO's, your chances of selling your house on your own as a way to net more money in a flat or falling market are very, very slim. Statistically, you'll net more money by selling your home through the services of a real estate broker. Real estate brokers have the tools, the negotiating skills, the experience and the overall know-how to make it happen for more money. Simple as that.
-30-
posted by Terry Ward at 7:35 AM
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