Most people who are looking to sell their houses to prospective buyers have one lingering question – does it make better financial sense to sell it yourself or via a real estate agent? This question is still as popular as ever, with many people sending me mail about what seems to be the most prudent way to rake in the money while parting with a property.
I work in real estate and give people legal advice pertaining to it. I’ve also been teaching a new generation of real estate law practitioners on how to close deals more ethically and professionally. It is my fervent belief that getting some legal help in your real estate matters will not only protect you better from unscrupulous elements but also prove more financially lucrative for you if you opt for the services of a real estate professional. This might not be 100% true but in many of the cases I’ve seen in my professional life, it has a high degree of success rate for both the seller and the agent.
Here are the reasons why you should engage some legal and professional help when it comes to closing on your home:
1. No need to pay upfront costs
There’s a glut of DIY marketing companies that want you to know that they can help you close your real estate deals. The sad truth is, they are nowhere near real estate agents in any way. They demand a handsome amount to list your home on the MLS system. You’ll have to provide the pictures, videos and other information yourself that these DIY companies can utilize for the MLS listing.
As you may have surmised by now, these companies do not believe in doing things professionally. They’d rather make you run from pillar to post to get good snaps and videos of your home (that’s going to cost you much more by the way). And if that wasn’t enough, these concerns make you pony up $1000-$2000 in upfront costs. And wait till you hear the kicker. This amount is non-refundable, meaning you don’t get your money back if the house doesn’t sell.
Now for the comparisons. If you had gone with a real estate broker, the benefits alone could be numerous. First, there are no upfront costs involved. You only pay if your house gets a successful buyer in the first place. Sounds good doesn’t it? And rather than rely on copy pasting that MLS listing and doing nothing about it, real estate agents have a whole network of buyers and marketing acumen that can help you get the word around. They use their contacts to ensure that only reputable and genuine buyers are courted.
2. NO chance of a bidding war
It takes a deeper understanding of the real estate market and the current trends to price your house just right. A real estate dealer can give you the most acceptable price for the property, one that other buyers may feel is keeping with the market norms. This makes bidding wars and haggling over the rate more unlikely. In most cases, a house and its price that is put forward by the real estate agent is final. This process is fair because the other parties never know what the other competing bids are.
If you had a private auction for the house, the bidding war could ensure that there’s no confidentiality, no trust, no iron clad guarantee that people have faith in the offer you’re floating. This can derail deals if proper care isn’t taken.
3. Negotiating Yourself
Do you know how much is the true value of your house? Do you know how much will people be willing to shell out for that prime piece of property that you want to part with? The answer to both these questions, I suspect, is pretty much similar.
You’ll end up paying an appraiser to get an idea of the monetary value of your place. A real estate agent on the other hand wont charge you a cent.
In fact, if you go it alone without a real estate professional, chances are that the other party might have one in tow. This way you will be at a disadvantage and at the mercy of a qualified professional. You may think that you are saving on the commission this way but the shrewdness of the other side will have you losing the commission in no time. The agent on the other side of the table won’t give anything away (that’s the experience talking) whilst on the other hand you’ll be forced to go lower and lower on the price.
4. Know Your Obligations
Do you know that inexperienced buyers try to hide the fact that there might be some issues with their home? This can open you up to lawsuits from the new owners that can result in you incurring a massive legal bill and damages settlement.
A real estate agent on the other hand knows how to talk about these issues with prospective buyers. Chances are that they might let the other party pay for the repairs/renovations in case the deal comes through.
Spares you a lot of legal headaches along the road.
5. Private Deals shoo away lenders
Another reason why it makes much more financial sense to do the deal through a real estate agent than going it alone is that private deals are viewed cautiously by lenders. And before you know it, that done deal collapses right before your eyes just because the lenders withhold their money.
There are cases where these lenders send their own property appraisal team to ensure that the deal is not too high on them. They are in the money business after all.
This also proves advantageous for the sellers because the knowledge that their buyer is backed by a genuine lender, makes the deal all the more credible. That way you might not have to worry about refinancing channels of the buyer. How’s that for peace of mind?
Selling your house by yourself is possible. But it’s not a walk in the park as you have come to know now. Good luck and happy closing.