Help us sell our house!
September 13, 2011 2:06 PM Subscribe
To self-list or not not self-list ... this is the question.
Do we list by ourselves thru a discount broker on MLS and use an realtor to help us find a new house or do we go ahead and list thru a standard broker that will do both and pay them the extra % in commission. Details inside.
My wife and I are selling our first home so we can get a better one. We've found several houses we'd be more than happy in and our current house is great, albeit a tad small for us now. Due to our kids daycare costs we haven't socked away as much for a down payment as we'd like but we're planning on taking the sale profit and using that as the extra. So far all the realtors we've talked to think we can sell for a decent amount above what we paid because of the location and the way our city "hip" area has moved to our doorstep. But the profit won't be huge. We're wanting to jump now because 1) we've outgrown our home and 2) the interest rate we got offered is so low that we can move up quite a bit for the same payment. (NON-ARM, btw.)
I'd rather not pay the 6% to a realtor simply for the act of listing when we feel we're more than capable to handle making view appnts, putting up a key box, etc. We'd rather a realtor make the commission of the seller of our new house. Are we missing something? Is this a horrible idea? Is it worth paying the 6% to the realtor? What am I not understanding about selling a house? I know we need a realtor to get us into look at other houses, but my understanding is they than get their commission from the seller, not us.
We had some friends who recently sold their house by listing it with the discount MLS broker and they're house sold nearly the next day. (Same location.)
My wife and I are selling our first home so we can get a better one. We've found several houses we'd be more than happy in and our current house is great, albeit a tad small for us now. Due to our kids daycare costs we haven't socked away as much for a down payment as we'd like but we're planning on taking the sale profit and using that as the extra. So far all the realtors we've talked to think we can sell for a decent amount above what we paid because of the location and the way our city "hip" area has moved to our doorstep. But the profit won't be huge. We're wanting to jump now because 1) we've outgrown our home and 2) the interest rate we got offered is so low that we can move up quite a bit for the same payment. (NON-ARM, btw.)
I'd rather not pay the 6% to a realtor simply for the act of listing when we feel we're more than capable to handle making view appnts, putting up a key box, etc. We'd rather a realtor make the commission of the seller of our new house. Are we missing something? Is this a horrible idea? Is it worth paying the 6% to the realtor? What am I not understanding about selling a house? I know we need a realtor to get us into look at other houses, but my understanding is they than get their commission from the seller, not us.
We had some friends who recently sold their house by listing it with the discount MLS broker and they're house sold nearly the next day. (Same location.)
I think what you need to add to your thinking is this.
Would a realtor find more people to be interested in your house such that the price might be 6% or greater than you would self-list it for ?
In a perfect world the realtor already knows several persons interested in buying a house such as yours and knows what they are willing to pay - this may be more than you would otherwise list it for. In addition by getting a number of people involved they may cause the price to be bid up by competing buyers sufficient to justify their fee.
This is, I guess, the TV advertisement view of what a realtor will do for you. I cannot say to what degree any of this will happen in reality but when I hear people say "I self-listed and sold the house in three and half minutes" my first thought is "well yeah, anyone can sell any house quickly if it's cheap enough". In short I wonder if many of these self-listers are leaving money on the table.
By the way, my mother in law had almost the reverse experience to my rosy description. She employed a realtor, they insisted it should be listed at $x - my mother in law insisted it should be listed at 15% over $x more. The realtor agreed to listing at the higher price with much shaking of head. The house sold six days later.
(I can't believe I've just written an answer in defence of realtors .... "I come to bury Caesar, not to praise him" !)
posted by southof40 at 2:51 PM on September 13, 2011
Would a realtor find more people to be interested in your house such that the price might be 6% or greater than you would self-list it for ?
In a perfect world the realtor already knows several persons interested in buying a house such as yours and knows what they are willing to pay - this may be more than you would otherwise list it for. In addition by getting a number of people involved they may cause the price to be bid up by competing buyers sufficient to justify their fee.
This is, I guess, the TV advertisement view of what a realtor will do for you. I cannot say to what degree any of this will happen in reality but when I hear people say "I self-listed and sold the house in three and half minutes" my first thought is "well yeah, anyone can sell any house quickly if it's cheap enough". In short I wonder if many of these self-listers are leaving money on the table.
By the way, my mother in law had almost the reverse experience to my rosy description. She employed a realtor, they insisted it should be listed at $x - my mother in law insisted it should be listed at 15% over $x more. The realtor agreed to listing at the higher price with much shaking of head. The house sold six days later.
(I can't believe I've just written an answer in defence of realtors .... "I come to bury Caesar, not to praise him" !)
posted by southof40 at 2:51 PM on September 13, 2011
I purposefully did not even look at houses listed for sale by owner when buying our house. I was not interested in dealing directly with the owner, or any impending drama. You sound perfectly rational to me, but I pretty much only want to deal with professionals when making a purchase as large as a house. If the discount MLS doesn't indicate that it's really for sale by owner and you could fool me, then you win!
posted by fyrebelley at 3:03 PM on September 13, 2011
posted by fyrebelley at 3:03 PM on September 13, 2011
If you're capable, willing to jump through all the hoops/hassle, and aren't in a hurry to sell, FSBO is a huge money-saver. You're hitting a smaller market, but 6% is 6%. The worst case is you have to cave and list with a real estate agent if your house sits for too long and doesn't sell.
Also, shop the big FSBO sites (if you haven't already) before you sign with a realt estate agent re shopping for a new house. If you're capable enough to save 6% on the sale of your current you're capable enough to save 6% on the purchase of your next. (Especially since you've bought a house before; you somewhat know the drill.)
posted by introp at 4:03 PM on September 13, 2011
Also, shop the big FSBO sites (if you haven't already) before you sign with a realt estate agent re shopping for a new house. If you're capable enough to save 6% on the sale of your current you're capable enough to save 6% on the purchase of your next. (Especially since you've bought a house before; you somewhat know the drill.)
posted by introp at 4:03 PM on September 13, 2011
Best answer: The seller doesn't pay the 6%, the purchaser does. Yes, officially the seller pays it, but it comes out of what the purchaser pays for the house. When you sell your house yourself, buyers know that you are not paying an agent and they expect the house to be priced lower. So what you get by not listing with a realtor is more hassle and less money.
posted by MexicanYenta at 7:50 PM on September 13, 2011 [1 favorite]
posted by MexicanYenta at 7:50 PM on September 13, 2011 [1 favorite]
First of all, if you are going to ask a broker to help you both buy and sell, you should try to negotiate down the selling commission. If you're going to also give your buying business with the same broker, he/she might be willing to give you a discount on the selling part, say a 1% selling commission (the buying agent would continue to get 3%). Your broker will still potentially earn 3% when you buy your new house. If you can strike a deal like that, it might be worth it to go with a broker because you can save yourself time and get some invaluable advice on negotiating, staging, pricing, etc. The brokers/agents that I've dealt with were very professional and the experience has always been good.
Now that said, selling your house on your own can be advantageous. It's unlikely that your selling agent will actually bring any buyers to you (buyers will be represented by their own brokers) so I don't think you lose anything from that perspective. However, by selling your house yourself, you give yourself flexibility to list at a more competitive price because you are effectively keeping the commission yourself. Selling a house at $500,000 with a broker at 6% is the same as selling it for $470,000 without a broker. So, depending on the market and the type of people you are trying to sell to, the lower price will make a big difference. Of course, in my example, if you can sell at $500K yourself and effectively earn the 6% brokerage fee yourself, then all the better.
Finally, I don't think it's necessarily true that you will get less money selling it yourself. That really depends on how much homework you are willing to do in determining the market price of your property. After all, brokers are not infallible in setting the right price. They have access to more information, like actual selling prices, of course, but it all comes down to what people are willing to pay and that's hard for anybody to predict.
Since you are up for being your own realtor, I say give it try! If it doesn't go anywhere, the loss of time might be compensated by the acquisition of useful feedback on your property and an inside look at the process of selling a house. It might also help you to work more effectively with a realtor if it comes to that.
posted by Bokmakierie at 9:13 PM on September 13, 2011
Now that said, selling your house on your own can be advantageous. It's unlikely that your selling agent will actually bring any buyers to you (buyers will be represented by their own brokers) so I don't think you lose anything from that perspective. However, by selling your house yourself, you give yourself flexibility to list at a more competitive price because you are effectively keeping the commission yourself. Selling a house at $500,000 with a broker at 6% is the same as selling it for $470,000 without a broker. So, depending on the market and the type of people you are trying to sell to, the lower price will make a big difference. Of course, in my example, if you can sell at $500K yourself and effectively earn the 6% brokerage fee yourself, then all the better.
Finally, I don't think it's necessarily true that you will get less money selling it yourself. That really depends on how much homework you are willing to do in determining the market price of your property. After all, brokers are not infallible in setting the right price. They have access to more information, like actual selling prices, of course, but it all comes down to what people are willing to pay and that's hard for anybody to predict.
Since you are up for being your own realtor, I say give it try! If it doesn't go anywhere, the loss of time might be compensated by the acquisition of useful feedback on your property and an inside look at the process of selling a house. It might also help you to work more effectively with a realtor if it comes to that.
posted by Bokmakierie at 9:13 PM on September 13, 2011
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If we'd wanted to get in to additional houses that weren't being listed, we could have easily bought that time ala carte, although I believe they also give you a few hours of looking as part of the package too.
Based on their flat out awesomeness, if you're in one of their served regions I'd also totally recommend using them for selling as well.
posted by straw at 2:29 PM on September 13, 2011