For Sale by Owner Listings Increase as Housing Market Heats Up
In a tough buyer’s market it is much more difficult to sell your house. Buyers are scarce, banks are unwilling to lend and getting enough people to consider your home can be very trying. Under these difficult conditions, the services of a real estate agent make perfect sense and their large commissions can be justified.
However, when markets turn around and buyers are able and willing to buy, not to mention showing up in large numbers, the use of a real estate agent can often seem like a waste of money. All agents are different and while some earn every penny of their commissions, other do the bare minimum and get paid a lot for it.
So, it’s not surprising to see that as housing markets heat up around the country For Sale by Owner listings are increasing as well.
Is selling your home by yourself for you? Here are some of the benefits of handling the sale yourself:
According to CNN Money, “broker commissions typically range from about 5% to 6% of the sale price, or about $10,000 to $12,000 on an average sale of $200,000.”
Half of this fee goes to the buyer’s agents while the other half goes to the seller’s. In exchange for this fee, the agents list the home on the Multiple Listing Service (MLS) to attract buyers and their agents, help with negotiations and host open houses.
No matter your financial situation, these numbers are huge and take a big bite out of whatever equity you may have in your house. In fact, in some cases these fees can be the element that stops sellers from being able to sell. If they will end up with negative equity because of an agent’s fees, most will not choose to sell. Or if they are in a situation where they must sell, they will be forced to take a big loss on the property.
How much money could you save if didn’t have to pay a realtor? What could you do with that money? Could you put more towards your next home, pay off bills or invest?
Get the Best Price
A realtor’s job is to help sell your home and of course, they want to do that in the fastest time possible. That may mean that they will be willing to accept a lower price than the market might yield and urge you to accept it.
CNN Money found a study that showed houses that were sold by owners over agents sold for more. The study, performed by Stanford economists “found that homes on campus using real estate brokers sold for 5.9% to 7.7% less than homes sold without brokers. The National Association of Realtors, however, maintains that homes sold using agents usually fetch much higher prices.”
Is it for You?
For Sale by Owner isn’t for everyone. Homes Person 2 Person is a great source for information about selling your house yourself and not having to pay a realtor. You can find a lot of information and resources here that will aid you in your search.