Should you Hire an Agent or Sell Your Flip Yourself?
You bought that great deal at auction using our advanced foreclosure search tools. You want to keep it a great deal after you have bought it at a great price. Do you sell it yourself, FSBO, or employ a real estate agent to sell it?
Consider these FSBO statistics: In addition to the 57% of sellers who believe that selling FSBO will save them money, 36% believe it will save them time, and 27% don’t hire an agent because they feel they know their home better than any agent could. Homeowners that attempt FSBO transactions are more likely to be Millennials, city dwellers, and non-white homeowners.
Selling your home means making dozens (if not hundreds) of decisions, starting with whether to work with a real estate agent. While the vast majority of homeowners hire a listing agent, others brave the world of FSBO – For sale by owner. According to Zillow research, 36% of sellers attempt to sell their homes themselves, but challenges along the way lead many of them to eventually hire an agent. In the end, only 11% of sellers end up selling their home without a real estate agent.
Listed are some of the benefits of FSBO:
- You will avoid paying listing agent commission: Commissions average between 4-6% of your homes purchase price and are usually paid by the seller from the proceeds of the sale. In most cases that means you would only be required to pay the buyer’s agent if you are selling to someone or a company that is not represented. If a buyer comes with an agent here in most of Florida you still have to pay their commission ONLY if you agree to it before the transaction begins.
- You will have complete control of the listing price: Without a realtor you are the master of your own destiny when it comes to your listing price. For $300-$500 you can hire an appraiser to give you a real market value or you can research your own comps online using the many websites that have rough property values you can go by.
- You can manage your own schedule of showings: When you list your own property, you can schedule your own showing times at your own leisure. You won’t have to wait for your agent to be available to do a showing for you.
- You are motivated to sell your own home for top dollar: Because it’s your property and your finances on the line, you’ll invest 100% of your time to advertise your home in the best light on dedicated sites. Don’t forget about pro photos, signage, mailers and print ads! Also posting your own social media promotions for it.
- You are your own neighborhood expert: You can advise potential buyers about not only the home but the community. You know your own neighborhood; this is potentially a great bonus to a buyer.
Listed are some of the benefits of listing with a Real Estate Agent:
- They understand pricing strategy and fair market value: When you work with an experienced local agent, they have a definitive knowledge and handle on what your home is worth and what kind of pricing will get buyers through the door.
- They are objective listing agents: Good agents have an in depth understanding of their local market. They have relationships with pro photographers and home stagers, which can highlight and set your home apart from others that are in competition with yours.
- They have access to extensive market exposure: They have access to the local MLS and online listing portals, social media, connections with other local agents and name recognition, which means plenty of eyes of your property and plenty of potential buyers!
- Buyers agents are more likely to show your listing to clients: Real estate agents are paid on commission, so some agents may not take the time to show your FSBO listing to their clients, therefore cutting out a large chunk of potential buyers for your home.
- They negotiate professionally for you: an expert agent can spot a serious buyer and guide you toward a great offer for your home. This can eliminate tire kickers! They know the process of buying and selling a home inside out. They can also recommend counteroffers for your home. 82% of seller surveyed by Zillow said they value an agent’s ability to lead contract negotiations.
- They know their paperwork: There is masses of documentation involved when you sell a home, without an agent, the burden of making sure your paperwork is complete and accurate will fall on you, or on your real estate attorney. Seasoned real estate professionals are experts at the purchase, sale and legal process. Don’t forget they had to take state exams and they must continue their education constantly to keep their licenses.
A 3rd option: Flat Fee MLS Listing Service! You now have what amounts to a middle option. Over the last decade the option of listing the property yourself into the MLS exists. You don’t have to be an agent, and you don’t have to pay a percent commission to a listing agent and yet your property is shown to all the other agents and buyer in the MLS. It’s a fantastic way to gain fast traction and sell your property fast and save 3% on your listing agent commissions. It costs as little as $150, and is relatively simple to setup and get going. We will be completing a tutorial article on this in the future, so stay tuned.
In conclusion you must make the final decision of what works best for you and your property. No two investors or property deals are the same. It is about the financial implication but also about the mental process of always being available to show your property, sifting through offers, accepting the offer, preparing the contract and closing it. Do you have the time and wherewithal to deal with a flurry of busy work to sell your property and get a good sale price, or are you willing to invest 6% to allow professionals to do it for you and free up time to do other things to make money. Choose wisely!