Have you been considering selling your house? If you have, you might have given some thought as to whether you should sell it through a licensed sales representative working at a reputable brokerage or if you can save a few dollars and list it on your own. Certainly you can save money by not paying commission, but there are many reasons why working with a trained and fully licensed sales professional works in your favour and could bring you more money at the end of the day.
Did you know that selling a house on your own could actually cost you more money than the commission you saved. Sure, you hear of people who sell their house on their own in only a few days, but there's a reason for that; they left a lot of money on the table! This is where a great agent comes into play. Not only will your agent price your house right, they also work for your best interests. Part of the agent's duties to the seller client is providing the best value by using their marketing, training, and knowledge to your advantage.
Your local real estate sales representatives are licensed professionals who live and work in the community. Not only are they members of the Canadian Real Estate Association (CREA) and the Ontario Real Estate Association (OREA), they are also members of the local real estate board. Being a member of the local real estate board, as well as their accumulated knowledge of the community, gives your local agents a better knowledge of the area you are looking to buy or sell in.
Here's a list of reasons why working with a licensed sales representative works in your favour:
1) Buyer Pre-Qualification - Real estate agents pre-screen and qualify their buyers before showing them houses. The agent knows if their client can afford to purchase your house. Agents often ask a list of questions to buyers prior to booking listing appointments for them. This saves potential headaches to everyone on both sides of the transaction. If you're selling the house on your own, you could end up showing it to many people who might not be qualified to purchase the house. Doing so can not only be time consuming and frustrating, but costly as well because you need to take time out of your day to be available for those showings. By hiring an agent, you're alleviating yourself of that responsibility by allowing a trained professional to handle it for you. Hiring an agent to do the work for you also alleviates most of the safety and security risks associated with allowing the "lookie loo's" access to your property.
2) Area Sales Knowledge - Your local real estate agents have access to information from their local real estate board which isn't available to the general public. They can provide you with comparable sales and market stats such as how many days houses are on the market for before selling. This information is important to have as it aids in setting the price correctly. You may know that the house down the street was listed for $400,000, but what you wouldn't know is that it took 96 days to sell and sold for $350,000. Local agents have a high level of knowledge of what areas of the community are hot commodities.
3) Price Guidance - Agents help guide their seller clients to pricing their house correctly in order to help their seller receive the best offer for their property. By enlisting the use of an agent, you're gaining access to market data and that agent's knowledge of the area to better inform you when selecting a price. Agents do not set the price, that is up to the seller, but they do provide the guidance necessary in order to find the best price. There are risks associated with listing your price too high or too low, many of which can occur if you list the house without an agent. If your listing price is too low, you are leaving money on the table. If your listing price is too high, you will have people looking at your house and not making an offer; your house could be used as a comparison house by agents to show other potential sellers the risks of listing too high; it can be on the market for a long period of time, leading to the frustration of it not selling.
4) Negotiation Strategy - An agent will devise a strategy and negotiate on your behalf to obtain you fair value for your house. Negotiations can be a time consuming and frustrating process, so why not leave the tricky business to a trained professional acting in your best interests? Unlike most buyers and sellers, the real estate agent can remove themselves from the emotional aspects of the transaction. Good agents are not messengers, delivering buyer's offers to sellers and vice versa. They are professionals who are trained to present their client's case in the best light and agree to hold client information confidential from competing interests.
5) Marketing Strategy - An agent will present you with the marketing strategy they will employ when selling your house. This strategy differs depending on each property as the agent will tailor it to meet the varying needs of their clients. It can be costly to market a house properly, but the costs are taken care of by the commission you pay the agent. Real estate agents also have access to a large variety of marketing tools. They can market your house out through paid ads on their Facebook page, newspaper ads, internal or cross brokerage listings through the data distribution feed, realtor.ca, custom websites, etc. Whereas your free ad on Kijiji might reach 3,000 people, the agent's variety of marketing ads could reach 30,000 or more. By employing a great marketing strategy, the likelihood of the right buyer seeing the property increases, as does the potential to acquire a higher percentage of the asking price or possibly selling the house for over asking. At the end of the day, do you want 3 offers or 30 offers? More offers on your house will create a bidding war and ultimately net you more money on the sale at the end of the day.
6) Market Share - For Sale By Owner (FSBO) listings only account for a small fraction of the market share, generally under 5% depending on your area. The other 95% of transactions are conducted by real estate professionals. That's 95% of the market that your house might not get exposure to if you decide to list on your own without the use of an agent. Agents might not know that your house is on the market if it is not showing up as for sale on their local board listings, and this drastically limits your pool of potential buyers. As well, some agents might not show your house if you will not be paying the buyer's agent commission or because they need to do more work to complete the sale given that the seller is not using a professional agent to represent them. Sellers often are not well versed in the intricacies of the paperwork, knowing what acceptable conditions and clauses are, and price negotiations. As the FSBO share of the market is such a small percentage, many often sell for less than a realtor could sell it for, or the sellers become frustrated and turn to a realtor to sell it for them after a few months of expensive inactivity. You might be able to sell your house for $500,000 and save on commission fees, but an experienced agent could possibly bring you a higher sale amount, thus netting you more money even after the commission fees are accounted for.
7) Large Network - Most agents have a large network which they will inform about your house being on the market. This network consists largely of other agents. Even if your agent does not have a buyer for your property, there's a good chance than an agent in their network will have a suitable potential buyer ready to purchase your property. The large network spreads the word quickly and can lead to to potentially a quick sale.
At the end of the day, there are many benefits to working with a real estate agent. They pre-qualify potential buyers, can often earn you more money on the sale, provide maximum exposure and marketing of your property, take care of the paperwork and negotiations to complete the sale.
If you are looking at listing your house, call me today and let's talk about the benefits and service I can provide!