Selling by owner vs through Realtor?

3 months ago

Does selling via realtor result in getting more money for a house as opposed for sale by owner?

What about discount or flat fee seevies, where the home is on the MLS. Why pay full price of commission at 5-6%. The house will be priced according to comps in the area.

Over the years, we have sold at least 5 homes, all by owner or discount realty companies.

A close friend, who is a retired broker, strongly feels that we would get more money for the home, (we would now like to sell), if we went through a realtor. The house is out of province, so she is not looking to sell it etc. Its just her advice.

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Comments (5)

Toronto Veterinarian
3 months ago
You will get more potential buyers by using an agent, because other real estate agents are extremely unlikely to show their clients a property that is being sold privately. That means, statistically, you're more likely to get more money, but that's no guarantee - any individual buyer might have the highest offer, regardless of how they found your home.

For me, I want the services that they provide, and I'm willing to pay for that. Other people might not need or want their help, but I'd think if you were selling a home out of province, their help would be even more important.
Love stone homes thanked Toronto Veterinarian
dani_m08
3 months ago
Many times you are able to negotiate a lower commission - at least in my area. It is definitely a seller's market (and has been for several years). If you are able to lower the amount of commission paid, it may make sense to use an agent in order to make the process easier. My niece is a residential real estate agent - she's told me that many people are currently negotiating commission amounts.
Love stone homes thanked dani_m08
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3 showings in 3 months is pretty telling as is the "buts" that the viewers mentioned. Anytime a viewer says that they love it but... what they really mean is that the price would have to be lower to cancel out that but. Your new agent will need to work to give you an accurate assessment of the market and you will have to be open to what you may be told. Anyone who tells you that your home is "worth" 925K and then you have to drop it 225K to get even 3 showings is either clueless or doesn't have enough gumption to tell you the truth about the pricing that you don't want to hear. Any home priced 500K above those of it's neighbors, even if they are smaller and with less acreage, is an anomaly for the area. As such, there may be no true accurate comps. That always bodes poorly for the most expensive home surrounded by less expensive ones. In real estate, location is everything. It counts more than amenities. It counts more than acreage. A million dollar custom home in the middle of a nowhere cornfield in agricultural Iowa surrounded by modest homes that price out at less than 100K will have a very hard time even selling for 300K. Put that same house in a tony Detroit suburb where homes go for twice that price, and you might get well above the 1M because of the location and the value of it being the cheapest house in the neighborhood. You can't escape your location. All you can do is price it low enough that the location is enticing.
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I would just add you should remove all valuables from all places like drawers, closets, basements, etc. Box them up and put them in storage or ask a friend if they have space to store them. If you are alone when someone comes without an agent, do not go upstairs or to the basement with them. Hang around the front door or stand out on the porch with phone in hand as though you're waiting for a call. I know that sounds over the top, but this advice came to me from an agent. And I live in one of the safest communities in the country according to a recent study. Don't use your phone number, get an 800 number from evoice which has a free trial for a month. Ask three local agents for a CMA and price it lower than the lowest if you're in a hurry to get out. Run an ad in Craigslist and forget running one in local papers because nobody looks there any more and it will be a waste of money. Pay to get your house listed on the mls because that's the only source used by agents and odds are you're going to sell to someone using an agent. Have a sign made for your front lawn and if you're putting together a website, consider putting that on the sign if there is room. Offer agents whatever the going rate is in your area - 2.5 or 3 percent typically. Make sure that's noted on all sites. Photo's have to look professional. Don't use your cell phone to take them. Get a lockbox to hang from your front door and disappear about 20 minutes before the showing. If you're working with a real estate atty, make that known. In doing my own research to sell FSBO I learned the biggest issue agents have with FSBO is they often get stuck doing more work than they would if the seller used an agent, sellers often over price their homes, homeowners aren't willing to pay any commission or want to lowball it, and homeowners stick around when the house is being shown. All of these are bad. I decided to try selling myself because I'm in a highly coveted area due to the school district and homes sell on average in 60 days rather easily. If you already know you're going to have a tough property to sell, I don't think I'd go the FSBO route. Better to leave that to the experts. Good luck!
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Good for you that you get to keep 80%...but I'll bet that 99% of the time is off the 50% commission. I would get approx.1%- 1 1/4% off a 2.5%-3%, it being a full 5%-6% commission. Then there were ALL the bills...the NAR, the local, the websites, ....the cont ed....etc. THAT ate a lot of the money. My point is that the consumer can get the best help while NOT paying a whopping 6%. Ummm, yeah, the realtors BOYCOTT FSBOs. I doubt that my experiences were unique...An example: as a buyer wants to see a FSBO, the realtor tells them that the FSBO house is a bad house(unless they pay a commission)...low and behold as soon as the FSBO gives a listing to a realtor, the house becomes "a gem" lol "And do you really think a buyer is going to pay $50 / showing? I showed a buyer 10 homes the other day..." buyer, seller how ever you want to structure the system. But see? If you got paid $50/per showing you would have $500 in your pocket, and YOUR time would not have been wasted. Only serious people would ask to "have the doors opened for them". The 2 things that many sellers need help with is showings and negotiations. The rest is paperwork and babysitting. Oh, the elderly may need online marketing help. If I were to pay 6%, I would EXPECT the realtor to take over the sale of my house completely. That means, stage, clean, WORRY about getting the best price, and actually negotiate THE BEST price for me, and not their commission. For 6% I want to be in Tahiti having Margeritas, while the realtor has "my headache"...lol
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If you sell with owner financing, you no longer own the property, you only own the mortgage with rights to foreclose. What would be the advantage to either party to instead form a land contract instead? In most states you can't simply repossess someone else's property in satisfaction of a lien on that property. You must go through the foreclosure process and first attempt a trustee sale or auction on the property. If the property sells at the auction you must submit a full accounting of money received, money owed and reasonable fees for the foreclosure process, some states will limit those fees to arms length fees only. There are strict timelines regarding disclosures and procedures when doing a foreclosure. Further, some states require you to show evidence of actively attempting to sell the property for an extended time. Most of these costs are lessened and the strict guidelines are relieved in a contract for deed (land contract). A "foreclosure" on for a land contract is essentially the same process as an eviction, which is much less costly and much more seller friendly. In many ways, a land contract is a lease with a bargain purchase option (of zero dollars). A buyer's interest in the property is protected by the contract he has with the seller rather than by the deed that is filed. So in most states you can simply repossess your own property (land contract). Land contracts are very safe for sellers and risky for buyers. As the seller has the deed, and the contract that transfers the rights and privileges of ownership are not recorded with the deed, the seller can use the property as collateral. In other words, they can get a loan and a lien on a property they don't really own anymore, because the protections afforded the buyer are not made part of the public record. ETA: I am oversimplifying this a bit to make it readable. There are some nuances to each that I glossed over, but the general idea is intact. ETA2: Edited for clarity
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lyfia
3 months ago
If it is listed on the MLS and you are paying the normal percentage to a buyers agent and also have experience selling yourself I see no reason why you need an agent. I mean if you've sold 5 homes yourself I would think you have at least some experience and unless the transaction would be difficult and include things you've not dealt before I think you would be well prepared.

This is assuming you have access to comps and are able to price it correctly. If a buyers agent gets paid for it like any other listing there should be very little reason for them to not show your house. They want to get paid and doing so they will show their buyers houses. To be honest I think nowadays most buyers will find the houses in the MLS they want to look at. It is possible some buyers agent could bad mouth it to their client because they don't want to show it because they think they may have to do extra work if the seller is inexperienced, but I think most buyers will still want to see the house unless the agent blatantly lies about something about the house to really make them not want see it. Which in that case you probably don't want to deal with that realtor no matter what.
porkchop_mxk3 z5b_MI
3 months ago
I don't know the answer to your question, I just want to say no way would I sell my own house. I'll gladly pay the commission to avoid the hassle of scheduling, showings, making sure paperwork is done correctly, etc etc etc. Just because a good realtor makes the work look easy doesn't mean it is.
elcieg
3 months ago
First, let me say that a good realtor deserves the commission.

My daughter just bought the house next door to us and there were no realtors involved.

From her side, she didn't pay a commission. However, she did pay an attorney to work with their attorney for the P & S, and closing and all that goes with it.

She sold her house using an agent. Agent advertised, advised, kept in touch daily, did diligent work providing comps, etc. The house sold at first open house, for over asking. Realtor did it all. Yes, she still hired any attorney for the closing and recording, but the charge was less than what she paid to the attorney to purchase the new house.

It was a win/win for her, but less stress using the realtor and I feel that the realtor got her more money than if she had sold it herself.

Back to neighbor's price. They were very happy to sell without an agent, saving the commission, but I know they could have gotten more for the house had they gone with a broker.

We've bought and sold 9 houses in our marriage. My vote is to use a broker....and make sure you get a great one.
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Selling by owner vs through Realtor?

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Toronto Veterinarian

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