The guys in the black hats!
People who sell their own houses privately do so to avoid the cost of realtor's commission. Though we all have the legal right to sell our homes privately, few attempt to do so. Many people believe that they have neither the time, the knowledge, nor the confidence to undertake this task. Most choose to use a real estate agent.
Services Offered By Real Estate Agencies
• Real estate agencies will assess the current market value of your home and suggest a selling price.
• A good agent will show you what comparable homes in the area have recently sold for.
• If you sign on the dotted line and agree to market your home through a company at the fixed commission rate, they will photograph your home and prepare a listing — a detailed description of the property. They will then advertise your home in newspapers and magazines and provide a front yard sign. This is known as an "exclusive listing" and means that only members of that real estate company can show and sell your home. In many cases your agent will invite members of other firms to view, show, and sell the property.
• If you agree to a higher rate of commission, usually another one percent, your agent will put your house on the Multiple Listing Service (MLS). That means that the listing of your home will be distributed to all members of the local real estate board.
Dealing with Agents
• The house showings are handled by the agents, who also do all the negotiating. The agent should also advise the seller on how to deal with mortgages, lawyers and the closing.
• Agents will split the commission: half will go to the seller's agent and half to the purchaser's agent (the same agent can act for both).
• With some agents and companies the rates can be negotiated. Recent legislation has outlawed price fixing in real estate fees. However, many real estate companies are resisting reducing their rates and have been known to blackball agents or companies (by ignoring their listings and refusing to cooperate) that do offer competitive rates.
• Instead of listing your house for sale, real estate agencies may offer to pay you cash for your home, or on rare occasions, take it in trade for another property.
Who Do The Agents Act For?
When people list their homes for sale with an agent, they do so because they believe that the agent will act for them and try to ensure that their interests are taken care of. However, bear in mind a real estate agent's bottom line is the need to earn a living.
Remember, when you sell your home privately, you earn that income and keep it!
Home Marketing Consultants — another alternative
Another alternative to real estate agents and brokers are Home Marketing Consultant services. These companies charge a very low commission, usually 1 percent, or a flat fee to help you market your property. Some services offered include:
• Front yard "For Sale" signs.
• Consultation on assessing the market and fixing a price.
• Advice on how to advertise, show your home, hold open houses, etc.
• Help you to prepare a fact sheet to hand out to prospective buyers.
And When The Agent Knocks On Your Door?
• Although you state "Private Sale — No Agents" in your advertising, you will be constantly called and approached by agents who may "have a buyer". In only some cases will this be true. What they wish for is a listing and the commission on the sale of your property. Assure them that you are determined to sell the home privately.
• If a purchaser has been shown the property by an agent and makes an acceptable offer, through that agent, you are not obliged to pay a commission. You pay commission only in cases where you have agreed in writing beforehand to allow the agent to show your house.
• If an agent definitely has a buyer, and the price is right, negotiate to pay only the seller's portion of the commission — no more than one-half of the current total listing fee.
• Some agents may consider your entrepreneurial actions threatening. Do not let them depress or harass you — carry on regardless. After all, you are working very hard to save that real estate commission.
• As you go through the process of selling your property you will realize that most agents, although very well paid, do work hard. They also have to give a large portion of their take to the brokers for whom they work and be responsible for their selling expenses. Just think, when you sell your property privately, you will not have to split a commission with anyone!
Remember, be strong. Do not allow yourself to be bullied by the constant stream of agents who will attempt to rob you of your self-confidence. They will probably, if our experience is anything to go on, ignore you afterwards. However, you will be laughing all the way to the bank.