How To Sell Your Home Privately
When you buy your first home, you may not really see what the big deal is regarding realtor fees. After all, you decide on the purchase price, and that’s the price (ignoring taxes and closing costs).
So it can be a bit shocking when it comes time to sell when you finally discover just how much a realtor charges to sell your home.
Agent fees are negotiable, but typically range from 2.5% to 5%. As of November 2012, the average home price in Canada was $361,516. That means a realtor fees will be between $9,038 and $18,076. Part of this goes to the buying agent, part to the agent’s brokerage, and part to the broker. To you, though, it’s 10 to 20 thousand dollars up in smoke.
Understanding The Drawbacks
Until very recently, selling a home on your own was extremely difficult. Real Estate agents had something of a monopoly on what was allowed to be listed on the MLS listing, and not being on that listing as a private seller meant drastically fewer people would even see that your home was for sale, thus limiting the potential for a better selling price.
Agents also have a range of tricks up their sleeves to sell your home for more. Staging, professional photography, and proper pricing are just some of the ways they bring value to the table. After all, if you list your home for $320,000 and sell it on your own while an agent could have done a more accurate market analysis and sold it for $370,000, their $20,000 fee still earned you an extra $30,000.
Recent Changes Favor FSBO (For Sale By Owner)
Some real estate agents, understanding that some owners don’t want to give up such a large chunk of money to fees have started offering a la carte services for fixed prices. This means you can get your home listed on MLS (impossible before) through an agent, but the fee will probably only be a few hundred dollars.
Combined with other sites that allow larger photos and videos, you should be able to generate a lot of foot traffic to see your house.
Steps To Selling On Your Own
You’ve just hired yourself as a real estate agent. You’ll have to research your market and set your selling price. If you’re in a hot market, you’ve probably heard a ton of stories about bidding wars and houses going for tens of thousands of dollars over asking price. Don’t just assume this will happen, and price your home at a point where you’d accept an offer but still be willing to negotiate.
Read up on home staging and take some of the basic tips to implement. Get rid of every type of clutter, brighten your rooms up, consider painting if your home could use it, and definitely take down every family picture.
You’ll also have to deal with showings. Consider having an open-house to draw a lot of traffic, but also be prepared to get booted out of your home whenever someone wants to see the place.
Once you have an offer, you’ll have to do the negotiating yourself, and all of the paperwork. There’s a lot to deal with and you have to be sure you don’t make any mistakes.
Paying The Buying Agent
Even though you’re replacing the selling agent, the buying agent still has to get paid for their work. Unless you sell to someone who’s not using an agent either, this will typically be between 2% and 2.5% of the selling price.
What To Do?
Selling a home on your own will be a lot of work. There’s a ton to learn, and the last thing you want is to worry that you left money on the table that a professional could have gotten for you. At the same time, to save $10,000 or more, surely that’s worth a few hours of doing research on the internet and cleaning up your house.
Consider it as a part-time job and you’ll approach everything in a more realistic way. Assuming you’re just cutting out an unnecessary expense (the agent) won’t work out well for you. Either way, good luck selling your home and finding an even better place to live!