You’ve decided it’s time to sell your home. You’ve also decided that you need to get as much money from the sale as possible. You’re thinking about doing either a for sale by owner (FSBO), or using a discount (a-la-carte) brokerage to sell your home. After all, why spend the extra money on a full-service agent? Selling a home isn’t rocket science.
The Underlying Assumption
If you could know that your house would sell and close for exactly the same amount no matter which sales method you used, then it would make sense to use the least expensive method. Unfortunately, it seldom works out that way.
It’s easy to underestimate all of the pieces that go into selling a house. Consider the following, as well as the time required:
- Setting the right listing price
- Developing the marketing message and materials that create a memorable impression
- Making the house “show-ready”
- Photos
- Creating an online listing
- Exposure via social media channels
- Finding a buyer
- Managing showings and showing feedback
- Knowing when to make price adjustments
- Understanding the sales contract and seller obligations
- Contract negotiation
- Ensuring the Buyer is qualified
- Managing the inspection, due diligence, and other contingencies
- Follow-up with the closing attorney and lender to ensure a problem-free closing
Time is Money
Making a mistake or failing to account for even one of the items above can affect the ultimate price you receive, and the amount of time it takes to complete the sales process. Using a qualified, full-service agent not only saves you time, but it should also help minimize the risks of mistakes and oversight. You’re essentially buying their time and experience.
Value Vs Cost
But let’s come back to the cost of that time and experience. Is it really worth the price that full-service agents charge? It might help to think about value, rather than cost.
Remember the underlying assumption that all approaches result in the same sale/closing price? If that were true, then the cost approach would be valid. But what if the agent can secure a higher price, or avoid some of the discounting that happens, or can avoid a lengthy sales process? A good agent brings value to the process that can help to offset their cost.
For every month that your home sits on the market, you’re likely paying mortgage interest, taxes, insurance, and possibly HOA fees. Also, the longer a house is on the market, the more that potential buyers wonder what’s wrong with it, or is it over-priced? Likewise, multiple price drops can suggest that the home was over-priced or that there may be a defect and that the seller wants to unload it. Once under contract, sellers may get asked to fund repairs that might not be required, or refuse repairs needed in order for the funding to complete. Numerous issues can arise during the time the house is under contract that could prevent a closing. What’s the cost (monetary, time and lost opportunity) of a failed closing?
Good agents will anticipate issues before they arise, avoid others, and represent your best interests at every step in the process.
If you’re thinking about selling your home in the near future, contact us at Terry A on 30A so we can explain the value we can provide.