When deciding to sell your home , there's so much misleading information in the public sphere these days, making it that much harder to make the best decision for you. That's why consulting with a local Realtor is probably the best decision you can make, to help you navigate the possibilities. Most people want to get the best price for what is most likely their largest, single investment. Who can blame anyone for not wanting to pay too many fees, or maybe even skip the fees altogether. Let's look at the options and what it means for you and your wallet.
The Case Against For Sale By Owner (FSBO)
Many people think that they can go it alone in selling their house, but it's not the same as selling a car or other belongings. There's negotiating, contracts with "legalese" (legal language), attorneys, paralegals, inspections, appraisals, negotiations, lenders, title companies, insurance agents, county court clerks recording title transfers, tax filings, etc.,...so many hands in the transaction and coordination of the process is a fulltime job. That's where an agent comes in, and how they earn their commissions. We handle all of this process for you. We also study the local market very closely to identify the best pricing and marketing strategies, to get top dollar for your home, in the shortest amount of time.
The typical listing fee charged by a licensed professional, which is shared with a cooperating agent bringing you a buyer, is about 5-6% in today's market. Sometimes, these may be higher if the Listing Agent is offering special services, such as professional cleaning, staging of the home with stylish decor, and special photography designed to showcase the best features of the home. Often times, the listing fee might be slightly lower with a discount brokerage, that may be offering fewer services to their clients. In the end, the average FSBO listing sell sells for 86% of what a house sells for with a licensed agent. That's an amount double the amount one loses from the average commission rate, PLUS, all the headache of doing it themselves. Bottom line...statics show that a seller is better off selling with a professional than trying to go it alone.
The Case Against an iBuyer (Internet Buyer)
These days, it's not hard to drive 5 minutes in the car without hearing how "you can sell without the hassle of dealing with showings" and how you can "receive a competitive offer". Today's iBuyers, such as companies like Zillow Offers, OfferPad, OpenDoor, Knock and others, are betting on a segment of the population that just doesn't want to clean and keep their house clean and tidy for showings to potential buyers. They are betting on some that have had bad experiences and just want a quick and painless sale. They are betting on extenuating circumstances that will encourage some sellers to consider their "competitive offer". The problem here is that a "competitive offer", or "fair market offer" is only competitive and fair to their buying segment...the buyers looking to make an easy profit in someone else's haste.
A recent 2-year study that analyzed the sales of 2 iBuyers found that, on average, sellers forfeited 17-22% of the value of their homes to "do the easy thing". For a $100,000 valued home, that is $17,000-$22,000! Multiply that by what the average cost for homes is in your market, and see how much they are willing to just give away for some conveniences. If a property is priced right, according to the fair market value of the home that is in line with its present condition, it can be under contract in a matter of days if not just a few weeks.
In my own personal experience, in 2017, I got an iBuyer "fair market price" for our Atlanta area home before listing our home on the local MLS. I just wanted to see the difference between what they wanted to offer me and what the market was paying. The iBuyer I chose offered us a price that was $33,000 less than what we went under contract for in just 4 days on market! That $33,000 could have just gone into the iBuyer's pocket, but instead, it paid the 20% down payment that eliminated the PMI on our new house purchase, lowering our payment by a couple hundred dollars each month.
Trust a professional Realtor with your home sale and listen to their advice when choosing your list price. There is no need for long, drawn-out processes, or endless showings. 4 days equaled $33,000. How much will you get to keep?
Beware the Discount Brokerage...You ALWAYS Get What You Pay For!
The last option one needs to be aware of are the Discount Brokerages, often offering 1-2% listing fees to get your house on the market. Many of them have big names attached (Redfin is an example, although there are others) along with overloaded salaried agents working on high volumes of "cases". These services claim to save you money by assigning overworked, non-personal agents to work your "case". You're possibly dealing with the largest single investment of your life, so surely you want to know that you have someone you can call on, with any questions, day or night, that is 100% focused on attaining the best outcome for you...not his manager reviewing a "case".
If that isn't enough, there's the fine print where you're still responsible for paying the cooperating broker commission, often in the 3% range, plus some additional transaction and associated fees. In the end, most people working with a discount brokerage, advertising low listing fees, lose more of their value to these services. Where the agent represented seller paid out 5-7% of the homes value, in commissions and fees, someone using a discount brokerage pays out 11-13% for less personalized service. I'd like to know exactly where this discount is?
For more information about how we can help with your Real Estate needs, and more specifically, how we can help you keep more of your home's value in your pocket...please schedule a call or a visit with us.