A good friend of mine from some years back—a real estate agent—used to tell me that a real estate agent is “one step above a used car salesman”. I never argued the point, it sounds about right, at least in how the public perceives the occupation. Most people, I think, see real estate agents as people who do very little work but collect a fat commission at the closing table.
In the post real estate meltdown world we now live in, my guess is that public contempt for real estate agents is even greater now. The steep decline in house prices across the country has made paying a realtor commission even more difficult to swallow. After all, why pay a realtor a six percent commission to sell a house that’s already declined in value by something on the order of 20% to 50%?
Actually, there are a whole bunch of reasons—at least five that I count—why you’d want to use a real estate agent to sell your house in this market.
It’s a buyer’s market—and you’ll need every buyer you can get
A buyers market is not the time to cut real estate agents out of the picture. In fact, you need them now more than ever! Buyers are harder to find than ever, and real estate agents have far more than any of us can ever come up with.
One reason is that they’re active in the real estate market. That gives them more potential buyers. People who call in on another property may end up buying yours, and that’s something you want to tap into.
Then there’s the multiple listing service, or MLS. This is the real estate agents ace in the hole, and the primary reason why anyone would list their home with an agent and pay a commission. Because of the MLS, real estate agents have access to more properties for sale, which also attracts potential buyers. It’s not an exaggeration to say that if your house isn’t listed on the MLS it isn’t really for sale.
You have better things to do with your time
Selling a house is time consuming. You have to market the home, hold an open house (or two or three), show the property to prospective buyers, take phone calls, and manage ads— it never ends. Usually, when you’re selling one house you’re in the process of buying another, or even relocating to a different city. That takes up a lot of time by itself, and will leave little for selling your present home.
A real estate agent can shield you from all of that. They take the phone calls, arrange showings and the open house, handle negotiations, and can market the house better than you can. They have pretty yard signs, professional looking flyers, and often maintain ad blocks in the newspaper or on the internet that they can easily add your property to.
All of that frees up your time to prepare for your upcoming move.
An independent marketing service
This is a more important advantage than most people know. Homeowners make poor sales people when it comes to selling their homes. That’s also the reason why real estate agents will ask that you not be home during an open house or during any showings.
Most buyers feel uncomfortable when they’re looking at a house when the owners are there. They’ll be afraid to open doors, look into crevices or ask critical questions. Most times they’ll move on to another property if the owners are home.
A real estate agent will take you out of the marketing phase of the home. Your job will be to keep the house need and tidy for lookers, and then to disappear when they arrive. The real estate agent will have a better chance of selling your home that way.
Handing the technical details
There are quite literally dozens of technical details when it comes to selling a house. Consider some of the following:
- Writing effective property descriptions and ad copy
- Writing up and amending contract offers
- Coordinating attorneys, title companies, home inspectors, appraisers and other vendors who will be involved at some point in the process
- Pre-qualifying buyers and recommending mortgage lenders
- Setting up and managing the closing process
Most of us are completely unqualified to handle any of these functions, or to know at what point in the process they need to be done.
A built in third party negotiator
Abraham Lincoln said “a man who represents himself (in court) has a fool for an attorney”, and the same can be said for a homeowner when it comes to negotiating the sale of his home.
Here’s the basic problem: as the owner of the home you’ll be anything but objective in the negotiations. As a result you could lose out on a perfectly good offer. Too much emotion is connected to a house for the owner to negotiate its sale effectively.
A real estate agent isn’t the owner of your home, and that leaves him or her with a clear head for negotiations. The agent is representing you in the sale of your home and all efforts in the negotiations will be tailored toward that end.
When ever you get involved in high level negotiations it’s always best to have a third party as a mediator. That can keep the emotion-driven side comments and objections in the background while the parties agree to agree. By contrast, direct negotiations between buyer and seller have the real potential to get ugly. That will be the end of what could have been a perfectly good sale.
A six percent sales commission is hard to swing when house prices have already fallen. But the cost of not paying it can result in a home that takes much longer to sell, or maybe never sells at all.
What do you think about using a real estate agent to sell a house in this market? Do you think you could do better on your own?