By Owner or By Realtor? Let’s Revisit – by Jason Kapit
Categories: Real Estate News, Selling Real Estate
hiBack in 2004, I wrote an article titled By Owner or By Realtor®. The purpose was to determine who should sell your home. In that latter part of ‘04 when I wrote the article, there was little doubt in my mind that a do-it-yourselfer could sell their home “by owner.” I went on to say that an eventual sale, however, did not necessarily mean that selling “by owner” was the answer. Fast forward to May 2008. I now know that the “For Sale by Owner” mentality is never the answer. The most revealing information lies in the irony of why sellers sell “by owner” versus using a real estate agent. The majority of “by owners” are aiming to save commission charges that accompany an agent related sale AND are convinced that aggressive marketing strategies are unnecessary. Both conclusions drawn are erroneous as discussed below. Consider the following data.
Commissions: A typical full service agent’s commission ranges from 5-7% (i.e. on the sale of a $500,000 home, the commission earned is between $25,000 and $35,000). That is a lot of money to anyone. As staggering as this sounds, many sellers do not realize that 80% of homes are sold by realtors and that these homes are consistently sold for far more money than “by owner” sales — 27% more on average, according to the National Association of REALTORS® Profile of Home Buyers and Sellers. Suddenly, paying a 5-7% commission makes a lot more sense, because in the long run, the use of a Realtor’s® services yields a higher profit on the sale of your home, even after you have paid commissions.
Representation: The old adage, “He who represents himself has a fool for a client,” has universal application. It is not just for lawyers. Today’s market is much different than in years past. Consider that just 3 years ago there were approximately 150 single-family homes for sale in all of Weston. Now there are over 900. Inventory has literally quintupled and economists predict that there is a minimum of 30 months worth of inventory to be sold. Realtors® are extensively skilled and trained to accurately price and market properties to qualified buyers (via print media, internet, television, MLS, etc.) Additionally, your Realtor® should gather feedback from selling agents, negotiate contracts, and ultimately oversee that mortgage applications/approvals, inspections, appraisals, walkthroughs and most importantly a successful closing all take place in a timely and professional manner.
Marketing: Make no mistake about it. The key to selling in this environment is aggressive marketing, that is, exposing the property to as many qualified candidates as possible. Simply putting a sign up in front of the property or adding it to the MLS (Multiple Listing Service) will do very little in a market where inventory levels are high and similar homes exist for sale. You need exceptional marketing. Hoping and praying for an offer is futile and a complete waste of time.
The answer: An emotional attachment to and a legal ownership of your home does not necessarily suggest that you are the most qualified person to sell it. Hire a Realtor®. You will be way ahead of the game by saving time and money. If money is the issue and you are looking to “net” more, hire a Realtor®. If your reason for selling “by owner” is based upon negative past experiences with a realtor, you have not found the right one. Would you stop dining out entirely because the service in one restaurant was bad in the past? Residential real estate is a relationship business built on trust and professionalism. Just as important as the decision of whether to sell your home, so too is the decision of who should sell it. Buying and selling your home may possibly be the biggest monetary transaction of your life. Make informed decisions and you will be fine.
Jason Kapit, Esq. is a Realtor® with EWM. To contact him, email kapit.j@ewm.com or visit www.JasonKapit.com
That is so true! What a great article and you are so right, it’s hard to represent yourself well!