Over the last five or so years Celeste and I have been fortunate to be able to sell the houses we were moving out of ourselves and save lots of money in the process. I suspect that many of our friends and family members thought that we were slightly loony for any/all of the following reasons:
- Selling a house is a pain in the butt. Why would you do that yourself?
- Selling a house is risky and why wouldn’t you engage the services of a professional?
- You need the marketing muscle of a real estate agent and a listing on the MLS in particular to sell your house.
On point number one I agree that it is a pain in the butt to sell a house, BUT if someone told you you could save anywhere from $10,000 to $20,000 by doing it yourself wouldn’t you think it was worth the effort?
As for point number two you can use a professional to protect yourself and it doesn’t have to cost you a commission. The professional is a lawyer and you can get one to write or review a contract for you and it shouldn’t cost you much more than $1,000 which is significantly less than the commissions you pay a realtor.
Point number three was a lot more valid 10 years ago, but now with the internet and the burgeoning “For Sale By Owner” community you don’t really need to hire an agent to get the word out that you’re selling. Add to that the regulatory trouble that the real estate brokers are getting (see this Freakonomics piece for details about the actions against the real estate “cartel”) and what you have is a disappearing advantage for realtors. And to be honest I think most homeowners can be as effective marketing their homes as the agents they end up overpaying to do it for them.
As I’ve written before, I think realtors can and do provide a valuable service but their real advantage in the future is going to be helping buyers, not sellers and they should be prepared to start charging fixed-fees because the days of 3-6% commissions are fast disappearing.