Real Estate Agent Vs. For Sale By Owner
Why does Dave think it's generally better to sell your house using a real estate agent as opposed to doing it yourself?
QUESTION: Seth on Twitter asks what the advantage is of using a real estate agent versus going the for-sale-by-owner (FSBO) route. Dave takes the opportunity to answer this in a roomful of his real estate Endorsed Local Providers.
ANSWER: I have had a real estate license for 30 years. Were I to put my personal residence on the market today, I would use an active real estate agent who knows his or her stuff in the marketplace, and I would gladly pay them commission. Now why would I do that if I could just sell it myself and save the commission?
If I sell it myself, I am exposed only to the buyers that I can attract from my newspaper ad, maybe a Craigslist ad, and those that drive by the front of my house. If you list with a high-quality agent, you get the advantage of being exposed to their entire pool of buyers.
But most importantly, they will list it in the Multiple Listing Service, through which all things real estate go. An FSBO listing won’t be there. If you use a real estate agent and have a thousand potential buyers, and you only get three potential buyers from an FSBO, who has a better chance of selling the house? Who has a better chance of getting the best price? Market exposure is everything.
Add to that the fact that you’ll probably do three of these transactions in your life, and a good agent did three last week. You will make several mistakes, but a pro will walk you through it. You have to get a good agent, though. The rule is that 20% of the people sell 80% of the houses. Research has shown that, between mistakes, lack of negotiating skills, pricing errors and general exposure on the market, you’ll cost yourself more than the real estate commission.
One more thing: If you are selling a house by way of FSBO, I think I can get that house cheaper, because I don’t have to pay a real estate agent fee. But you think you can sell it for more because of that same reason, and we can’t save the same fee. You’ll come out slightly better and with a lot less hassle if you use a top-shelf agent.