Realtors are a unique, even though they are not much different than you and I, they are intimidating for sellers because they take between 3-10% off the top on sales (the high end for raw land). Realtors are great for buyers, because the buyers are able to use their services basically for free, unless you consider the upcharges sellers might add to the price of their homes when selling with a realtor. This post is about how to sell a home with or without a realtor.
- They have built trust amongst buyers
- They have deep access to MLS
- They have a communications network setup amongst themselves
- 90% of all houses are sold by realtors (at least that is what my realtor tells me)
Disadvantages to using a realtor:
- Money (nice cuts on houses, generally 5-6% off the top)
Are there ways to beat realtors at their own game? This depends. I think one of the main keys to selling a home in most markets is getting traffic to the house. Generally traffic will bring you the type of buyer you are looking for and offers.
If you live on a busy street you might get enough traffic passing by to see your property. Currently I have a house for sale that is 5 turns off a busy street. I need 5 open house signs pointing to my house to get anyone to come by. This is not good for traffic.
If your home is in a niche market you might be able to sell it just by word of mouth. Certain areas are sought after and can bring in offers because of where they are and what they are. At the same time if your house is in a niche that does not blend with the neighborhood, you might need a realtor to find that special someone to buy the house.
Many people use the web now. They do their own searches then go to realtors with the homes they like. The most popular real estate site is realtor.com. This is a site that has MLS listings up to date. There are new web sites that are up and coming that in the real estate realm that are not related to MLS and realtors exclusively.
The first that I use is Zillow. Zillow has a great interface and allows people to upload their house for others to view. I like to use this one because of the map search. Realtors have similar abilities on their tools, but you as a buyer do not have access to it.
The second site I use is Trulia. This is a great site for buyers. They give amazing information on neighborhoods, recent sales, and current sales around the areas you are looking at. This could be bad for a seller if they are overpriced for their neighborhood, so be careful.
I also use the Google real estate site. They have some decent things on their site. They generally list things they can scrape from the web. Not the best tool, but I am sure it will only continue to grow.
I also like Craigslist. I frequent Craigslist for land just to see if anyone is slipping.
I recommend putting your house on Zillow, Trulia, and Craigslist, if you go with a realtor or not. Some realtors will do it for you others do not feel it is necessary. These are free sites and they get traffic, so either way make sure it gets done. There are also pay sites such as fsbo and forsalebyowner that could bring in additional traffic. I do not think they are required now with the free options that are out there. They are good though for buyers ;).
Newspapers also have real estate sections. Here in Raleigh, there is always a big section on Saturday. I read it to get a feel for the market and how things are moving, but do not generally “look” for homes in it. For me this is where the deals generally do not get posted.
If you decide to go with a realtor here are 5 things you never want to hear a realtor say:
- After putting the house on the market, “Now all we have to do is wait.”
- “This house will sell itself.”
- “It does not matter how many people see the house, just the right one has to see it.”
- “I had to reschedule the showing because…”
- “I do not know.”
I personally like to flip things. I have margins, and realtors cut into my profit. I have to schedule around them, but for me they are a necessary evil/blessing. They can come through at times and at other times just make you want to not be in the business.
Have the house ready for traffic, clean it and have it ready for the next person to move into. If you do not, expect it to sit for a while or get low offers. Stage the house well. Some people cannot visualize, you have to do the work for them. I like to have the house popping when people see them. The house needs to be spotless, use an orange duster on the wood, bake chocolate chip cookies during open houses (for the kids and the smell, make the family feel at home) and have bottles of water. Also tuck away all of your bills and personal items. You do not want to get robbed or give off the wrong idea. Put the toilet seat down. The toilet should be clean, but in either case you want to sell the house.
Once the house is ready, get traffic to the house. Let everyone you know, know that the house is up for sale. Post on zillow, trulia and craigslist. Also post on sites that are niche to your area. Be friendly, you are the person they are going to be interacting with and you have to sell them on the house.
Budget for some form of advertising. It can be signs in the yard, post cards, or newspaper ads. You may not have to spend money, but you want to do things that are effective for your area. If every house sold in your area hits the local paper, you might want to follow suit.
Once people are interested in the house, sell them. Once they are sold, negotiate. Find their weaknesses and their strengths through your kindness. If you find out they have to move to the area because of a job, use that to your advantage. If you find out that the wife loves the house, but the husband does not love the price, make the deal work.
Expect to pay for various things even if you do not use a realtor to sell your home. You have to pay for a lawyer, moving cost (if this was a residence), and many other small things will pop up. You might have to fix that squeaky door or replace toilet seats.
Do not forget to check out the link I posted with more info. http://www.soldbyowner.com/tips.html I can expand on the tips a bit, but do not feel a need to duplicate all of them ;).
It is a “buyers market” now, though you wouldn’t be able to tell in some of the neighborhoods here in Raleigh. Find out what is going on where you are. I recommend using realtors in most cases and use one in almost all of my cases. I concentrate on things I know and doing realty is not my best skill.
There are alternatives to realtors. They are becoming more prevalent now. Buying a home is still one of the biggest decisions that a family will make. They need to be confident with their decision. Make sure you can do that for them.
Personally I need a realtor, but many people do not. Good luck if you are selling. Feel free to follow up or ask me questions. Personally I am not a realtor. I talk to many realtors each week though… so I might be guilty by association at times.
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March 19th, 2008 at 1:57 am
I’ve sold 2 homes without an agent. in California where homes cost 350K+, thats a significant savings.
both homes sold with 7 days!
March 19th, 2008 at 7:32 am
In Spain, things have gone a stage further, with agents taking upto 20% in commissions for selling!
This gets added o the asking price so that the seller does not have to pay it - but that makes homes hugely overpriced and unsaleable.
There is currently a private sales revolution underway here.
March 19th, 2008 at 12:05 pm
@Investing & Passive Income What advice would you give for someone listing a home? I agree that is a nice chunck of change (before and after taxes).
March 19th, 2008 at 12:10 pm
@Neil What area are you in? I spent some time in Rubi/Barcelona this past year. The prices seemed high and strong. 20% is steep. All around there were lots of cranes. There were some new bachelor pads a bit north of Barcelona that I would love to live in for a few months.
March 20th, 2008 at 9:59 pm
Very good article. Personally if I was a house flipper I’d use a realtor so I’d have more time to focus on my flips. Selling a house by yourself takes alot of time.
April 8th, 2008 at 2:53 am
LeGo: We are based in South East Spain, but the website covers the whole country.
I did say UPTO 20% - most would be 10-15% (still way too much for the work the agent does)
So many people do not even realise that they can buy and sell without agents in Spain, and that they perform no legal function and do nothing that a vendor can not do him or herself (often more effectively).
Who knows a property better than its current owners???
May 12th, 2008 at 10:52 am
I’m sorry but no realtor unless they are the Brokers themself’s in a small firm ever get the full 3 - 6% . They never. By the time the fees are paid, the cut to the broker’s firm, you get around 1 - 1.5% of that total . Why don’t you go Video interview agents, then post the results on your site and or youtube. I’m 100% sure (based on 2007 NAR averages) that you will not find any realtor who makes that much, once it gets to them its at 1 - 1.5% . Just because 20/20 and other news shows / msn say the Realtor gets the full commission, is B.S. Again Ask a Agent, Interview some . Until you provide the Video proof, you are just retyping others non backedup BS on your blog. (the proof is in the public documents NAR post’s every 1/4)
May 12th, 2008 at 1:18 pm
I didn’t mean to imply that the realtor/agent themselves got the cut of that. What I was saying is that you as a seller has to give up that much money. Almost everyone in my family has a real estate license (except me). I do realize that the agents get less than what some would expect, if they are not dual agents they get even less. I would say they get a quarter of what the % is, then they have to pay tax of that %…
August 9th, 2008 at 8:08 am
With the realty world changing, it is easier to sell properties without the use of a realtor. New websites like HutHound.com offer an avenue to bring sellers and buyers together and not cost a dime. HutHound.com also has links to vendors to help with anything related to real estate transactions.
House flippers should ask themselves - what qualifications are required by a “professional realtor”? Flippers will probably find they know more about real estate than 99% of the realtors.
August 10th, 2008 at 1:54 pm
Need some more Raleigh homes on HutHound. I think realtors will have more competition in the future. A lot of them don’t have the networking in place that needs to be there. I can do as much networking online in an afternoon then many realtors in a month…