Choosing a real estate agent? Three reasons to go with a seller's agent.
If you鈥檙e selling your home, you should expect a list of expenses. The commission you pay the seller鈥檚 agent is usually one of the biggest, around 6% of your home鈥檚 selling price.聽This pays聽for the valuable work your seller鈥檚 agent, also known as a listing聽agent, does for you: preparing the home, marketing it, showing it to potential buyers and helping you through the selling process.
Some owners try to save money by not working with an agent and listing their homes 鈥渇or sale by owner.鈥� But FSBOs, as they鈥檙e known in the trade, require聽time, effort and real estate know-how.聽聽also incur their own expenses, ones that people who hire listing agents don鈥檛 have to pay.
For most homeowners, it pays to hire a listing agent. Here鈥檚 why:
Getting the price right
An experienced real estate agent can help price your home, in part by reviewing recent selling prices for comparable nearby homes. Without an agent, you鈥檇 need to research the market and find these 鈥渃omps鈥� on your own.
A seller鈥檚 agent can also list your home in a local Multiple Listing Service database, where buyers and their agents can find it. If you鈥檙e selling on your own, you can pay a listing agent a one-time fee for this service. It would be much less than a 6% commission, but聽you鈥檇 still be聽paying for a service a listing agent would normally provide.
Negotiations and savvy
Listing agents can help you negotiate with potential buyers and聽. Once you accept an offer, he or she聽will also help manage the scheduling of appraisals, inspections and related tasks before the deal closes.
Some sellers decide to go to FSBO route, then聽hire listing agents when their properties don鈥檛 attract buyers. But if your goal is to sell your house fast, you might be better off starting with a pro who can quickly draw traffic to your home.
Even if you don鈥檛 think speed is a factor, potential buyers might offer lower-than-desired prices if your house has been on the market for a while. They聽might also make lower offers if they know you aren鈥檛 paying a seller鈥檚 commission.
Commissions are negotiable
Listing agents don鈥檛 always charge 6%聽of the purchase price. You might be able to negotiate a lower commission, or find an agent who聽charges a flat rate聽for his or her聽services.
It鈥檚 also worth noting that listing agents don鈥檛 pocket the entire commission; they split it with the buyer鈥檚 agent. If you plan to sell your home yourself,聽you might attract more buyers if you offer聽to pay their agents鈥� share of any commissions.
But this means that in addition to paying for an MLS listing and handling the sales process yourself, you鈥檒l pay a buyer鈥檚 agent about 3% of the sales price. So selling your own home聽might not be as big a savings as you expected.
Hiring a seller鈥檚 agent is best in most cases, but there are some times when selling your own home聽is a good choice:
You鈥檙e in a seller鈥檚 market
If you鈥檙e in a hot area, it might be easy to聽. But you鈥檒l still need to review and negotiate offer letters. Even if you don鈥檛 work with聽an agent, consider hiring聽an聽attorney to help you through the closing process.
You already have a buyer
If someone has already contacted you about purchasing your home, it鈥檚 possible聽to put together a private sale without a real estate agent聽鈥斅燽ut it鈥檚 still a good idea to research selling prices for nearby homes聽and get legal advice before agreeing to a deal.
Margarette Burnette is a staff writer at NerdWallet, a personal finance website. Email:mburnette@nerdwallet.com. Twitter:聽.
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