Realtors and FSBOs
Why Use A Realtor To Sell Your Home?
7 Reasons to Use a Realtor to Sell Your Home
How To Select A Realtor To Sell Your Home
What Is The Listing Contract?
Lockbox and Key
Selling FSBO (For Sale By Owner)
How many people sell their homes themselves?
Why Use A Realtor To Sell Your Home?
Buying or selling real estate is one of the greatest financial investments that people make in their lifetime. Today's real estate transactions usually exceed $100,000 and considering the small upside cost and the large downside risk, it seems almost foolish to consider a real estate deal without the professional assistance of a Realtor.
All licensed real estate agents are not the same. Only licensees who are members of the National Association of Realtors are properly called Realtors and can proudly display the Realtor logo on business cards or marketing materials.
Realtors subscribe to a strict code of ethics, are expected to maintain a higher level of real estate knowledge, and are committed to treat all parties to a transaction honestly.
A Realtor has access to numerous classes, seminars and certification opportunities.
Local Realtor groups are active in community matters, and individual members are routinely involved in PTAs and other neighborhood organizations. Local Realtors are community experts; they watch real estate trends and participate in local matters.
7 Reasons to Use a Realtor to Sell Your Home
- 1. Your Realtor can provide you with up-to-date information on what is happening in the marketplace as well as the price, financing, terms and condition of competing properties. These are important factors in getting your property sold quickly and for the best price.
- 2. Your Realtor can make knowledgeable recommendations for repairs or cosmetic work that will enhance the salability of your home.
- 3. Your Realtorcan market your property to other real estate agents, as well as to the public. In most markets, over 50% of real estate sales are cooperative sales; that is, a real estate agent other than yours finds the buyer. Your Realtorwill act as the marketing coordinator, disbursing information about your property to other agents through a Multiple Listing Service, open houses for agents, office and board meetings.
- 4. Your Realtor understands when, where and how to advertise your home. It is a misconception that advertising sells homes. The National Association of Realtors studies show that 82% of real estate sales are the result of agent contacts through previous clients, referrals, friends, family and personal contacts.
- 5. Your Realtor will generally prescreen and accompany qualified prospects through your property.
- 6. Your Realtor can assist you in objectively evaluating each buyer's offer, without compromising your marketing position. This initial contract is only the beginning of the process of appraisals, inspections and financing. Your Realtor will help you write a legally binding agreement that will be more likely to make it through the process.
- 7. Between the initial contract and closing, many questions may arise. For example, there may be inspection repairs or title questions. Your Realtor is the best person to objectively and efficiently resolve any issues and move the transaction to a smooth closing.
How To Select A Realtor To Sell Your Home
Whether you are selling your first home or are an experienced seller, you may want to use a Realtor. There are several ways to find a local Realtor.
- Get a recommendation from friends or family members
- Get a recommendation from others who are selling or have recently sold a home in your community
- Check out the Realtor signs in your neighborhood
- Check out the ads in local newspapers and homebuyer publications
- As a seller you may decide to meet with only one Realtor, or you may want to interview several.
Whichever you decide, there are a number of questions you will want to ask, including:
- What services do you offer?
- What type of representation do you provide? Some agents represent buyers, some represent sellers and some will facilitate transactions as a neutral party.
- How much experience do you have in my immediate area?
- How long are homes in this neighborhood typically on the market?
- How would you price my home? Ask about recent home sales and competing homes that are currently on the market. Different agents may present you with varying prices, ask them to explain how they determined the price and why they think your home will sell for a given value.
- How will you market my home? It is customary for a Realtor to provide a detailed summary of how they intend to market your home. Have them elaborate on what marketing strategies have worked in the past and which will be most effective for your home.
- What is your fee? Brokerage fees are established in the marketplace and not set by law or regulation. Typically, agents who list homes are compensated on a performance basis, they are only paid when your home sells.
- How long do you want to list the home? The listing agreement is a contract that details the Realtors? obligations and outlines the terms under which your home is made available for sale. The length of the agreement is a negotiable matter.
Once you have selected a Realtor, he or she will immediately begin to market your home according to your requests and in the most appropriate way for your community. Your Realtor should also keep you informed as the marketing process unfolds and expressions of interest are received. Over time, marketing plans may be modified to reflect buyer reactions and changes in the marketplace.
What Is The Listing Contract?
A listing agreement is a legally binding contract between the home seller and listing agent. The use of a listing contract is commonplace. The necessity of reading the contract carefully and understanding what it means before signing is very important. If you need legal advice, consult an attorney.
Most Realtors use established listing agreement forms that are industry standard or are dictated by their brokerage company.
The basic terms of the agreement are:
- Length of the contract The length of the contract is negotiable. A longer agreement benefits the agent because it allows him or her more time to secure a buyer for your home. In a slow market that is fine, but if homes are selling quickly, you don't want to be committed to one agent for more than a few months. If the home has not sold and you are satisfied with the agent's efforts, you can offer to extend the contract before it expires.
- Compensation Commissions are always negotiable. Most areas have a standard commission percentage that agents expect to receive, this is usually around 6% of the sales price, but you will find agents that expect more and others who will accept less. A lower commission will save you money, but a higher commission will give the agent more incentive to invest in marketing your home. The commission paid to the buyer's agent is typically part of this agreement, you can expect 2.8% and that information is posted in the MLS (Multiple Listing Service).
- MLS (Multiple Listing Service) The listing contract typically authorizes your agent to post your home in the MLS. Unless you are selling a very exclusive property or have serious privacy concerns, you want your property in the MLS because it markets your home to the widest possible group of potential buyers. Most MLS databases are also accessible by consumers on the Internet, although the information on line is limited.
Lockbox and Key
A lockbox is a key-holding safe that can be inconspicuously attached to the entrance of your property. An agent, who has arranged for a showing of your property and receives the combination, can gain access to your home. This allows your home to be shown without you or your listing agent being present. If you are concerned about strangers entering your home, even with a buyer's agent, then do not authorize a lockbox. Remember that the more people who see your home, the better chance you will have of selling it for a favorable price.
Selling FSBO (For Sale By Owner)
Four out of five homeowners use the services of a real estate agent to list and sell their home. Some people choose to sell their homes without using an agent. Of this 20%, some are very experienced home sellers; some are transferring ownership of their home to a family member, coworker or a tenant already living in the home.
A For Sale By Owner (FSBO) real estate transaction can be a very difficult undertaking and here are some reasons why:
- FSBOs tend to overprice their homes As with most homeowners, FSBOs honestly believe that their home is worth more than comparable homes in the same neighborhood. The knowledge, experience and research that a Realtor puts into a comparative market analysis is an important tool in determining the price a home will sell for. FSBOs may decide what price they will list their home for based on refinance-appraised value or what homes in the area are listed for, instead of what comparables actually sold for.
- FSBO homes are not listed in MLS The MLS (Multiple Listing Service) is one of the most powerful marketing tools available to home sellers. All Realtors, when searching for homes for their prospective buyers use this service. Because real estate industry membership organizations are open only to licensed real estate brokers and agents, FSBOs are not allowed to put their homes in the MLS.
- Agents won't show FSBO homes In a typical home sale, the buyer's agent receives their commission as a percentage of the commission paid to the listing agent from the seller. Without a listing agreement, there is no guarantee that the buyer's agent will be compensated for his or her services. Often agents are concerned about going through a transaction with an inexperienced and self-represented seller. This could mean that the pool of potential homebuyers is limited to primarily unrepresented and often unqualified prospects.
- Buyers feel intimidated It is a known fact that buyers will spend less time looking at a home if the owner is present during the showing. Buyers feel shy about discussing the homes advantages and disadvantages even with their own agent if the owner is within hearing distance. Buyers are also less inclined to negotiate directly with the home seller. Having an agent on each side creates and effective emotional buffer between the buyer and seller.
- Legal Issues Real estate transactions are filled with potential liability for unwary sellers. A FSBO who overlooks even one required form or legally mandated disclosure could face legal action after the transaction closes.
How many people sell their homes themselves?
Most home sellers -- about 4 in 5 -- use real estate agents to list and sell their homes. Of the other 20 percent, some sell FSBO, also known as For Sale By Owner. Other owners, however, sell without marketing their homes. Property transfers between family members account for some of the direct home sales. Also, tenants are often offered the opportunity to buy the property they are renting before the landlord lists it for sale.