The assumption used to be that when you wanted to sell your house, you needed to call a real estate agent. That assumption is not necessarily true any more. There are options and technology available now that didn’t exist even a few years ago. Now as a real estate agent, I entirely appreciate that my view will be seen as biased. Regardless, 12 years of selling real estate has taught me a few things. I’d like to share a few reasons why selling on your own may be more costly than using an agent.
Let’s break home buyers into four categories. The number 1 buyer we’ll consider to be the best buyer you could ask for. The number 4 buyer would be your worst. As we go through them, we’ll explain why, chances are, you may be attracting more of the worst than the best.
1 – The best buyer you can encounter in this business is the one that emails us telling us that they are being transferred into Calgary. They will often contact us a few weeks prior to arriving in town. They email us a list of criteria they are looking for in their new home. We advise them as to areas they should consider, factoring in things like rapid transit, schools, church, or whatever else they are concerned about. We then pick them up at the airport, drive them around for a couple of days, and place an offer on the best place we could find. We will then do all the follow-up with them from here.
These buyers are highly motivated, have only a few days to find a home, have money, are more interested in being efficient and saving time than money, and probably will not try to set up showings with “For Sale By Owners” (FSBOs) for when they are home from work or whatever.
2 – The second best buyer is the one that sold their place. They usually sold through a Realtor, even if they started by trying to sell their place themselves. They know what they have paid their agent, and are now going to put them to work again; this time at the seller of their next place’s expense. They have a relationship with their agent, and they like and trust him.
These buyers again are highly motivated, have money, have a month or two to find a place, and will usually use the agent that has gained their trust. The agent is in the business of real estate. A good agent will always look for the best home for his client. That being said, he (or she) is a business person, and as such needs to be efficient with their time, and profitable. A FSBO will probably not see as many showings from these buyers.
3 – The third is the first time buyer! These buyers simply need the help of an agent more than most others. They will (as with all of their clients) offer them advice as to where they should look, how to identify value, how to present an offer that works for them, explain costs, talk about home inspections, etc. Most importantly, they will ensure that they don’t pay too much for their home, and that they’re interests are promoted and protected through the process.
For the reasons listed under 2, you may not see too many.
As a FSBO you need to think about this: (You won’t like it.) Most buyers work with an agent that they know and trust. They are someone that they know personally, or someone that was otherwise referred to them. Buyers have no reason to trust you. They don’t know you. In fact they are sometimes curious as to why you are not using a realtor, and may wonder if you are trying to hide something.
4 – The fourth type of buyer is the bargain hunter. This buyer is astute and experienced. He is not afraid of working with you, and is interested in saving all of the same commission you are trying to save. They will look at your house as an opportunity to really save some money.
So which buyer would you like to attract? Realtors add their own value with good advice. The MLS offers you the opportunity to incentivise thousands of Realtors that are driving around with motivated buyers in their cars. These buyers are looking to buy and trust the advice of their agent.
To me it comes down to this simple thought: Selling on your own makes sense if you want to save some money, except for one thing. It doesn’t work nearly as well for the buyer.
Feel free to fire me a note and let me know what you think.