REALTOR® vs. For Sale By Owner
Reasons to Use a REALTOR® vs. Selling By Owner
Selling a home can be a stressful, emotional and a very involved process. There are a multitude of decisions to make and documents to complete as part of a complex and ever-changing process. Given all the challenges and risks involved, there are a number of very good reasons to consider hiring a REALTOR® to help with the important financial decision to sell a home.
- Ethics – Not all real estate agents are REALTORS®. A REALTOR® is a member of the National Association of REALTORS® and is held to a strict code of ethics. This is very important when negotiating a real estate transaction and helping a seller navigate through the ups and downs of the sales process.
- Knowledge – A REALTOR® knows and understands all the documents, reports, disclosures and the like that are part of the process. They are familiar with the terminology and jargon inherent in a real estate transaction.
- Experience – A REALTOR® has been involved in the buying and selling of property previously. That prior experience imparts lessons learned and important informative tidbits to new buyers and sellers.
- Information – REALTORS® have access to a wealth of information, including local information relative to the neighborhood, market/comps and property. A REALTOR® can access that information more quickly and easily due to their professional connections and permissions.
- Network – REALTORS® have access to a network of other professionals that are essential when navigating through a real estate transaction. Escrow agents, lenders, inspectors, contractors and appraisers are just a few of the disciplines that might be needed during the process of selling a home. A REALTOR’s extensive network of contacts is helpful for the individual looking to sell a house without any such professional connections.
- Support – REALTORS® can be a trusted and excellent source of emotional support during the rollercoaster ride of selling a house. They understand the mental and emotional difficulties that are an intrinsic part of the real estate process. They can offer a shoulder to cry on and words of support when making tough decisions and receiving difficult news.
While a property owner looking to maximize profit on the sale of a house may consider selling his or her own home to save money, the savings may not be worth the stress and strain of selling a house without the help of a professional. In addition, lack of experience can lead to costly mistakes that might be avoided with involvement and direction from a seasoned real estate professional. Selling a home is one of the most important financial transactions many will pursue during their lifetime, but the process of selling a home is an incredibly emotional experience as well. The interaction of money and emotion makes the prospect of hiring a third-party professional to assist in the process a wise and sound decision.
Given the above, it is important to also consider carefully the selection of a REALTOR®. Just as important as it is to hire a REALTOR® to assist with selling a home, it is equally important to select an appropriate one. Some things to consider when selecting a REALTOR® include:
- The relationship between REALTOR® and client should be a long-term, intimate and trusting relationship. If the initial interaction does not feel right, it likely will not improve over time. Consider recommendations from friends and family, and research REALTORS® that buy and sell within the local neighborhood. The best form of advertisement is word of mouth, and references from trusted sources are typically a good means of identifying reputable professionals.
- Interview three or four prospective REALTORS® before making a selection. Ask questions of the REALTOR® about relevant topics, including, but not limited to, the number of active listings, number of homes previously sold in the neighborhood/local area, communication protocol (e.g., frequency, format), and marketing strategies and techniques to target buyers.
- Be wary of REALTORS® that suggest the highest price for a home, or similarly, an overly inflated price for a home. Pricing a home too high to start usually results in a longer sales process and lower ultimate selling price. Higher prices are seen as unrealistic by prospective buyers, and a house on the market for an extended period of time is assumed to have serious flaws.
- Look for a full-time REALTOR® as opposed to a representative working part time or on the side. Their attention may not be focused on the current housing market or a seller’s best interest.
- Avoid hiring a relative as a REALTOR®. Professional involvement with relatives is emotionally complicated and too often fraught with difficulties, resentment and mismanagement.
- Ensure the REALTOR® knows the real estate market in the neighborhood within which the home will be sold. Their knowledge should focus on the immediate neighborhood and not only the local area.
- Be cautious of a REALTOR® that is willing to accept lower commission. Commission on the sale of a house is typically 5 to 7 percent, split between both buyer’s and seller’s agents. If a REALTOR® charges a lower commission, there is less impetus to sell the home and fewer agents may show it.
- Confirm that the REALTOR® has sold the prospective property type before. For example, if the property for sale is a condo, ensure the REALTOR® has previously sold condos; if it is an investment property, find a REALTOR® that regularly works, or has previously worked, with investors.
- Attempt to confirm the REALTOR®’s previous performance as regards negotiation skills and competence in tracking details of their transactions. Just as the ability to close the deal is important to the sale of a house, so, too, is the ability to ensure the fine details of a transaction are identified and resolved.
Selling a home is challenging, involved and emotional. Selecting a REALTOR® to assist with selling a home is a wise choice to ensure that the deal is closed and the sale negotiated to the seller’s satisfaction. With the above information, selecting a REALTOR® should be one of the easier parts of an otherwise challenging process.