Using a real estate agent is not essential, and you can perform many of a real estate agent’s tasks on your own. Not using a real estate agent will save you a hefty amount of money – real estate agents take up to 6% of the home’s selling price in commission fees. But according to the National Association of Realtors, 91% of sellers in 2012 still used a real estate agent.Real estate agents not only make the process easier for the seller, they also may be able to make you more money off the home. Let’s look at some of the primary functions of a real estate agent and what it would take to perform them on your own.
One of the primary reasons to use a real estate agent is that a realtor can list and market your house to potential buyers on real estate databases like MLS (multiple listing services). However, thanks to the internet, there are now many new websites where you can list and market your home as a For Sale By Owner property. If your market is healthy (or better, a seller’s market), you should be able to find potential buyers for the home on your own.
As a seller, you will need to have certain legal documents in order to close a sale. The paperwork is ultimately completed by real estate attorneys, not by the agent. However, a good real estate agent will have a thorough knowledge of what paperwork needs to be completed, and which need to be filed by an attorney. This can save you both stress and legal fees down the line. If you do not plan to use an agent, you will probably want to counsel or hire a real estate attorney who can walk you through the process.
Showings and Pricing
A good real estate agent will be knowledgeable about the current market, and be able to set the most competitive price for the home. They will also have more experience negotiating the final sale. As a result, agent-assisted sales are typically higher than FSBO (For Sale By Owner) sales. According to a Harvard University study, agent-assisted homes sold at an average of $40k more than their DIY counterparts. Real estate agents also make the selling process more convenient by arranging showings with potential buyers. If you do not use an agent, you will have to do this on your own time.
The Bottom Line
Many people choose to use a real estate agent for convenience, security, and an advantage in the market. However, it is possible to list your house independently of an agent - just be prepared to dedicate more time and effort to the process than you would otherwise. You may also be able to find a discount broker, who will perform some but not all of the above functions for a smaller fee.