I’m going to make an assumption that you want some level of assistance to sell your home. You are not looking to “sell it yourself” but think you can save commissions. Typically seller’s pay the commissions to sell their property. These commissions are negotiable but typically 5-6% of the sales price of the home. There is a lot of “disruption” in the real estate world in my opinion is nothing more than clever marketing where Seller’s are being marketed saving money where in reality it may be under marketing or under selling their home. Let’s see if we can deliver some information to help you decide what the best option for you to sell your home. Here’s some thoughts you should consider.
What Closing Costs do Sellers Pay? How Much Do Full Service Real Estate Agents Make?
In the online age, paying the 5-6% commission (although it can vary) might seem unnecessary. Especially if you can take decent photos and know your way around a contract. On the other hand, full service real estate agents spend years developing the expertise it takes to accurately price a home and then negotiate its sale, so it’s safe to say it’s not a skill set you can learn in a weekend. Also a experience local agent has market intelligence that is necessary displayed and available online
What Are À la Carte Services?
If you already have a working knowledge of real estate and experience with selling your home in the past, you could benefit from à la carte services offered by some real estate brokers. Agents that fill these roles often call themselves “consultants” and instead of charging a flat percentage or flat fee of the sale, they allow sellers to purchase the help they need without paying for what they don’t.
If you choose this route, you will either pay the real estate professional by the hour for a specific task or a flat fee for bundled services and will have to manage the rest of the process on your own. Typical bundles include:
Pricing Assistance. A real estate agent will give you a comprehensive market analysis and guidance on pricing your home.
Listing Assistance. In this bundle, the brokerage will arrange for professional photos of your home and prepare a virtual tour to create an online listing for your home.
Contract and Negotiation Assistance. Once you have an offer you’d like to accept, the real estate agent will draw up a purchase contract and represent you at the home inspection and appraisal tour. They will negotiate with the buyer’s agent on price and any immediate repairs or contingencies they request.
How Do I Know Which Real Estate Company To Choose?
Each local brokerage or online real estate company will offer different ways detailing services/arrangements at varying rates so I advise you to research throughly to get a sense of your local market and what companies are active. And then think about getting the answers to these questions before you decide what help you need and whether it makes sense to use these options for selling:
Have you sold a home in the last 2 years? If the answer is no. The laws and regulations around home sales change from year to year so you will either need to re-familiarize yourself with your state’s laws about contracts, contingencies, seller disclosures and typical time frames for home inspections and appraisals, or hire an agent to take care of this part. Second the online marketing for selling a home is changing almost daily, how your home is displayed online is almost as important as the working arrangement you have between the company.
Is the online listing is included, syndicated to all major real estate websites, and has professional photography too? If your listing isn’t distributed or syndicated to every major real estate website and the 100s of local agent websites your at a disadvantage to sell the property. If buyers can’t see it online everywhere thats a problem. If the images don’t look good thats a problem too. Does the website hosting the listing have all the cool tools like realtor.com? Most do not and again a serious disadvantage if the distribution of the home is limited by the real estate company you’ve hired.
Who is showing the home? In the conventional local agent arrangement, the seller’s real estate agent conducts the one-off home tours and open houses. But unless you hire a consultant to do this for you, you will be responsible for meeting the potential buyers and their agents and selling the attributes of your home. Another thing to keep in mind, most consultants won’t be available to host open houses because its not part of the service they provide.
Qualifying Buyers? Does the arrangement include a showing agent? You might feel awkward asking for this, but the letter is essential to knowing whether or not the potential buyer can afford your home.
Whose negotiating the contract, and are they representing you properly? Do you trust the Company? Some Companies you may be dealing with getting and negotiating all contracts with the seller? Does the company have experience in your local market? If the company is regional or national, you may need to be familiar with industry standards, the typical cost of repairs, and how certain issues affect the value of your home. If the Company you hired to list your home represents the Buyer is that acceptable to you?
How will you communicate?Do you have a dedicated agent or consultant or is it random? Who do you discuss issue with and how fast will they be fixed? When are they available? Do you submit a support ticket? Selling a home often demand immediate response from the listing agent. You may not have a dedicated listing agent that is normal for conventional local real estate in your market.
Upfront Costs? In a traditional full-service arrangement, the costs are paid by the seller out of the sales proceeds, so they don’t have to come out of pocket for anything upfront. But if you arrange for any consulting services, you will have to pay for those either upon signing the contract or upon completion of the task.
How Many “No”s
After answering all of the above questions honestly, how many “no”s do you have? Its really not about the “no” its about what you are really negotiating away and how much are you really benefiting by attempting to save agent commissions.
Buying a home is not a online experience. Sure Buyers browse, view, and find homes online but that is where the online experience is basically ending for most buyers. Although billions have been spent to market selling or buying real estate is simple and easy, there is still a significant amount of local knowledge and information not available online. This knowledge and information is what local agents use to sell homes successfully. A good local agent should be part of your process to decide which company to use to sell your home.
Does 1% of the Sales Price Make Sense?
Real estate commission in Placer County are closer to 5% than 6% of the sales price for listing and selling a home. Most online real estate companies promising a low fee to list are subject to the minimum fee (For example they will list your home for 1% subject to a minimum listing fee of $6,000). Some firms have raised their commissions because the model isn’t profitable. Make you wonder if they are cutting services to you to increase profits. In the end the Seller is taking on a lot of responsibility to sell the home all for roughly 1% of the total commission associated with selling the home. The accountability that used to be on your local real estate agent is now offloaded to the Seller. Seller’s often don’t know that the commissions to sell their home are split between the listing and buyer’s agent. The online companies will share with you that less than 2.5% to the buyer’s agent will put your home at a disadvantage to be sold. There is a major lawsuit about commissions being pushed through the courts.
If you decide the commission savings are worthwhile, make sure you interview the prospective online real estate companies to get a clear idea of the help they will provide. And then get to work!