Agents…keep on scrolling. Your livelihoods depend on convincing people that they need you, so I doubt many agent will endorse my message. And that's ok, because this post isn't for you.
Firstly, I'm an experienced buyer/seller, so this message may not resonate with those who have less experience. I've sold 2 homes (soon to be 3) and purchased a total of 5. Each transaction I've used an agent, until now. And never again.
I'm selling my current home and downsizing. We've already purchased the next home. I decided to reach out to my local community via FB to assess community interest in buying directly from me instead of putting it on the market. I got several very good leads and met with a few potential buyers. The price I want (and am getting) is very fair (especially so as I've eliminated ridiculous realtor fees).
I contacted a local title agency that manages FSBO transactions as well as my former realtor whom I've used for 5 transactions in the past. I got all the state required paperwork and have negotiated an offer from the buyer. The realtor wants to charge me nearly 10k to handle the paperwork. The title agency will do it for 3.7k. I think we all know what option I'm choosing.
If you're an experienced home buyer/seller, decently know your local market, and have a modest social media presence, selling a home privately is very easy. Could I have gotten a little more $ on the market? Maybe. But, I would also have to factor in my opportunity costs, costs associated with owning multiple houses for a longer period of time, and realtor fees. Buyers want a great value and sellers want top dollar. FSBO is an opportunity to have the best of both worlds, if you have a little fortutude and patience.
It's easy and less expensive to sell your house without an agent. So, why don't more people do it?
byu/dimplesgalore inRealEstate
Posted by dimplesgalore
17 Comments
Totally agree, went FSBO on my last sale and saved like 15k in commission fees alone. Most people are just scared of the paperwork but honestly if you can handle buying a car you can handle selling your house
Most markets have agents that will list for flat fee to get it on the mls. The flat fee we pay in dfw is around $400
When I bought my first (and only) house I signed an agreement with a buyers agent to help us find our home. This agent was part of the largest brokerage in town. When we found the house we wanted to buy, of course the seller’s agent was under the same brokerage, so unavoidable dual agency occurred as we prepared to make an offer.
So, I ended up representing myself in reality. “My agent” was a bit shocked when my demeanor changed and it was time to negotiate and I flipped a switch on him. But I’m in the minority of people who would understand this stuff (no real estate experience but I do have business transaction experience).
Why doesnt everyone do their taxes? Why doesnt everyone fix their own cars? Why doesn’t everyone do their own plumbing?
In every case its cheaper and easier to things yourself. But not everyone has the same skills, and for most people its just better for them to pay a professional. You get professional quality work, backed up by some sort of guarantee, and you dont have the stress of figuring out how to do things yourself.
Real estate is no different. Most people only sell 2-3 houses their whole lives (average first time buyer is now 40, average years in home is 11) So its not something most people are going to develop the skills for. If you’re motivated and knowledgeable, it can be a great way to save money. Most people arent cut out for it though and will probably screw up somewhere in the process without some sort of assistance.
Two houses ago (selling) I didn’t use an agent, put in the Zillow listing “buyers agent 2%” and sold it to the second buyer that looked at it for asking price. Evaluating an offer isn’t hard, it’s mad libs with numbers and who pays for this item or that.
Just bought land on the other side of the state, used a buyer’s agent for that (who also represents the builder we’ll be using). He has been fantastic, knows all the city people due to his involvement with the builder, can get info on water and sewer tap etc. He has earned his commission on this deal, hands down. When we build, I’m taking a discount instead of using an agent. We’ve built 3 houses in 8 years, I don’t need any help deciding on finishes or worrying about resale. I’ll be dead when it sells.
I’ve met enough agents to not be generally impressed by the profession. The barrier to entry is just too low. Are there great agents who can justify their cost to a transaction? Absolutely. But not every agent is great (most aren’t). And not every transaction is complicated enough to need their involvement. The key is having the experience as a buyer or seller to know when you need one.
because people are idiots and walk around life as brainless morons.
just look at all the morons that follow organized religions.
smart people don’t use real estate agents.
Very situational.
Congrats on the sale.
If neither the buyer or seller have agents it’s obviously a no brainer. And I’m a 1% broker
it’s not easy for everyone. many people do need the guidance and don’t know or are unwilling to do the research and work needed. people hire professionals for retirement, accounting, law, money management, lawn care, etc etc. you do what you are comfortable with and are willing to do.
Well, that’s the key isn’t it, if you know what you’re doing. A lot of people think they know what they’re doing but they really don’t. Others actually put some effort behind it and make it work. That said, one of the things I didn’t see in your post is how you figured out what your state’s disclosure laws are. Can the buyer come back a sue you for any reason? While there’s a bunch of states that have no requirements, at least in California we have very strict seller disclosure requirements and some cities have even stricter point of sale requirements. Remember, everything is simple and straightforward…..until it isn’t. A lot of people would rather have someone to make sure they don’t make a mistake than save a few bucks.
This is such a weird post. If you’re experienced, don’t use an agent if your time isn’t worth it (mine time is worth more than the cost of an agent so I am happy to use mine).
If you’re not experienced, using an agent can save you a lot of money.
Who cares enough to write a novel about it?
(not an agent – an investor)
We just sold our home privately to an acquaintance of an acquaintance. We got the full price we asked, and it could not have gone more smoothly. We and the buyers had experienced real estate lawyers handling the title and paperwork (writing and reviewing PSA of terms we’d agreed upon etc.). In the past we’ve paid tens of thousands of dollars for realtors who either did very little or did things that actively gummed up the works. I’d never go back to using a realtor. Based on my experience, I’d advise:
1. If you live in a rural area get an appraisal before selling. We have a somewhat unique property with limited comps, and the appraisal was so helpful in setting the price. Well worth it.
2. Make sure you and the buyers have good real estate lawyers to review everything and make sure the title is in order. They can also help resolve any issues that come up during inspections but honestly, dealing directly with the buyers about repairs and potential credits was way easier than going through realtors.
3. Do any repairs/updates/renovations needed in advance. We spent a year getting our house in shape, and provided the buyers with detailed information on the age of systems, repairs, etc. You can use the money you’d spend on realtor fees doing a significant amount of work on your home to improve its value and speed up the inspection process.
4. Use your network of family and friends to get the word out. We found the buyer through relationships at our local gym.
I believe paying realtors tens of thousands of dollars for sales is grossly outdated for the amount of work that is done on most sales. We were tired of paying our lawyer 10% of the costs of selling property when they did 95% of the work. We also genuinely enjoyed getting to know our buyers through the process, and it makes us happy to think of them enjoying the home as much as we did. Win win all around.
Our latest purchase is perhaps the only time I’ve ever been impressed by an agent / thought we got some value from him. The two prior buyers agents we got access to the homes for showings, two or three total days of their time doing the showings, and told to pay list price and that we should consider waiving inspection. The two sellers agents we used, one was at a point where every house was selling in a week at or above list, ours did too, while the other convinced me we could get about 10% more than we eventually did, resulting in it sitting on market for 7 months.
I don’t have much of a social media presence, but getting on Zillow isn’t hard and going towards the low end of its estimates, with some decent photos, a floorplan, and the house in decent shape, should be enough to get a buyer. The rest is just paperwork.
You’ve bought and sold a lot, which has given you insight into the process. Most people haven’t and don’t really know what to do.
Most people can’t buy a car without getting fleeced and we expect them to be able to handle a $500,000+ transaction 😬
If it were easy then it would be more common. If it were super easy to sell your own car carmax and Carvana wouldn’t exist. You are paying for convenience.
I’ve been in real estate for over 22 years. Most sellers are absolutely clueless about pricing their home, getting their home ready to sell, handling inspections and repairs.
I’ve worked with lots of buyers on for sale by owners homes. I can think of one deal it was very smooth. All the rest were terrible clueless sellers have no idea what they’re doing.
As home prices have skyrocketed over the last decade, the commission based fee model is now the problem. This coupled with the rise of technology in the real estate space means agents are getting paid way more money for doing less work. Ultimately, the industry will need to shift to a flat fee model and those older agents that refuse will find themselves left behind.
At the end of the day we do not really need real estate agents just like we do not need car dealerships but there are powerful special interest groups and lobbyists that will keep those industries alive. I think like anything else (changing your oil, cutting your grass) you should have the option to do it yourself. Imagine if there were s special interest group that were trying to prevent you from cutting your own grass and lobbying for state licenses to be able to operate a lawn mower. It sounds ridiculous but that is where we are with cars and houses.