When you sell your home yourself this is known as “for sale by owner”, and it may seem like a great way to save money on your sale. Acting as your own seller’s agent will save you from having to pay the typical broker fees. So why use a real estate broker? I can actually think of quite a few reasons!
First, remember that you’ll almost always be better off off using a real estate agent or broker such as Compass Real Estate because they’ll make you more money (based on statistics!). So let’s see how they can help.
A real estate broker is a licensed real estate professional.
These brokers are also licensed real estate agents, but as brokers, they help with selling your property. And as a broker, they have to ensure that the real estate transactions are lawful, that all paperwork is correct (and complete), and that all transactions and money is recorded and reported properly.
Did you know real estate agents work for brokers?
So when you sell your home and work with a real estate agent, you’re also working with a broker.
What is the purpose of a broker in real estate?
Brokers can do a bit more than real estate agents, including…
- moving money in and out of an escrow account,
- mediating conflict in legal disputes, and
- working with larger networks.
Is a real estate broker necessary?
Technically, no. A real estate broker is not necessary.
You don’t need to use a real estate broker to sell your home.
So why use a real estate broker?
Put simply, working with a real estate broker could earn you more money on your home, as well as help you get a better deal on a home (if you’re buying too).
Did you know that NAR data shows that the typical home sold with the help of a real estate agent in 2020 went for $295,000? Without an agent, the average they sold for was $217,900.
Plus, brokers can help you be fully versed in all of the selling disclosures that are required by law. And they can get your home sold faster, a huge plus!
How does a broker make money?
Brokers earn money in the form of commissions from their sales. The seller is responsible for paying the commission, and this is typically 6% of the sales price.
When looking at that percentage, you may think that’s a high number. But think about it, selling your home for an average of $78,000 more (as noted above) is well worth the $18,000 commission. You still walk away with a bigger profit! And remember, that’s the average. Sometimes a commission is lower than the 6%.
Do brokers charge fees?
Yes. Of course brokers charge fees. It’s how they make a living.
The amount will depend on the broker you choose to go with when selling your home. The average is 6% of your home’s sale price, but it can be as low as 4%.
Should I use a real estate broker?
Yes, I would recommend it.
They don’t just make you more money. They help you stage your home, get higher-quality buyers, and can sell your home faster than you would on your own.
Absolutely! And, if you’re in the process of trying to buy a home while selling your home, a broker can help you do both! And remember, you’ll only pay fees as a seller, not a buyer, so you could get a good deal by doing both at the same time.
Let’s look at the other benefits you’ll get.
Realtors Don’t Like “For Sale By Owner” Homes
Some realtors may not show a “for sale by owner” home because they know there will not be a colleague on the other end of the transaction. An agent may even discourage clients from viewing your home.
They also see it as a hassle to close a deal without a seller agent and without a guaranteed commission.
You Can Avoid Emotional Selling
Using an agent will avoid any emotional influence that could lead you to make silly mistakes.
Just a few of these mistakes include…
- overpricing your home,
- underpricing your home,
- refusing to counter a low offer because you’re offended,
- or giving in too easily due to deadlines.
You’ll Have More Time On Your Hands
There’s a reason that real estate is a full-time job.
- Do you have the time to rush home every time someone wants to see your property?
- Can you answer the phone to a potential buyer at any time of day?
- Do you have the energy to take advantage of every possible opportunity to market your home properly?
An agent can handle all these things while you focus on your job, your family, and other responsibilities that need your attention.
Related: How Much House Can I Afford??
Agents have access to a large network of clients, other agents, and agencies to bring in the largest pool of potential buyers to your home.
You may be able to list your home yourself and put feelers out with your own personal network — but is that going to be enough?
And, are you going to be able to get what your home is truly worth?
No More Unqualified Buyers Wasting Your Time
Agents can weed out unqualified buyers for you. Some people who want to view your house are just dreamers or curious neighbors. So it’s a lot of wasted work to get your house ready for viewing.
Ideally, you want to limit those hassles and have showings that are most likely to end in a sale. Agents have the experience and knowledge to do all of this for you.
Related: Your House is a Terrible Investment
Why use a real estate broker? In summary…
The fact is that in most cases the risks of going it alone will likely outweigh the benefits.
Risks such as…
- having a lack of potential buyers,
- not knowing how to negotiate properly,
- not having enough time to dedicate to finding a buyer,
- and the risk of making emotional decisions because your judgment is clouded.
The biggest risk is not having the experience or expertise necessary to navigate all the legal and regulatory requirements that come with selling your home.
Some of the other main reasons why you may want to reconsider going down the FSBO route.
What do you think? Are you ready to use a real estate broker?
AUTHOR Kimberly Studdard
Kim Studdard is a project manager for online entrepreneurs and small businesses. When she isn't spending time with her daughter and husband, or reading her growing pile of horror books, you'll find her working on her HR degree and working towards FIRE.