Why should I use a Realtor® to sell my home? By Marty Gale
Does selling my home myself save me money?
I recently received a call from a Mortgage originator (Loan Officer) that is a friend of mind. What prompted me to write this article was a discussion he had with his neighbor. He said: “We were doing a project together this Saturday and during the project we discussed what I did for a living. When the neighbor learned that I was a lender and that I work with several great Realtors® the neighbor ranted and raved about Realtors®. He said they are overpaid, don’t do anything and he would never use one.” Subsequently the lender asked me to write this article about what realtors do.
Let me begin with this statement. “In any profession you have the good and the bad.” Unfortunately this gentleman most likely had a bad experience with a Real Estate Agent at some point in his life. In any professional service performed for a fee, you usually get what you pay for.
Realtors® are a member of the National Association of Realtors® and have to adhere to a higher standard of care than a licensed real estate agent. If a Realtor® is doing his or her job properly, they will complete up to 200 steps with considerable time and effort to get the property sold. In this market with ever tightening home loan requirements, inspections, tests and disclosures, many times the property goes under contract multiple times before arriving at a successful closing. Navigating a transaction to a completed sale is a complicated process. In 28 years as a full time Broker I have never seen the process as complicated as it is now.
Years ago you might have been able to place a sign on the property, write a contract, wait two weeks and close with no problems. Those days are long gone!
So the question is “What value does the Realtor® bring to the sales process? Does it justify the commission they charge?
Answer – The right Realtor® brings years of marketing experience, knowledge and tools of the trade to the table. Proper use of this knowledge, marketing and experience will:
- Sell the home faster,
- Net more money to the seller than they could if they were to sell “By Owner”,
- Narrow or eliminate the pitfalls of selling “By Owner”.
As local Realtors®, we collect a lot of statistics about this and the data shows conclusively that only 10% of “By Owner” attempts are successful. About 10% of the “By Owner” attempts end up with the property being removed from the market and the sale abandoned. The remaining 80% of “By Owner” attempts hire a real estate professional to get the job done.
According to National Association of Realtors® statistics, sellers who are represented by a real estate professional get 20% more money for their homes than sellers who successfully complete a “For Sale By Owner” transaction. A part of that is due to the unrepresented seller’s tendency to overprice their property in the first place with the result that they have to discount more heavily because it becomes “stale” on the market. In a transaction involving a real estate professional, we work very hard at the beginning to properly price the home and consequently they sell more quickly.
Secondly, there is the issue of advertising. A house won’t sell if nobody knows it is for sale. A “For Sale By Owner” sign on the lawn is only a start (and a weak one at that). A Realtor® may spend anywhere from 6-10% of the expected commission on advertising in addition to the cost of placing the listing in the MLS, and the cost of a professional sign placed on the property. Additional costs may be incurred for placing the listing on certain Web sites and for other techniques that the agent uses to increase exposure for the property. In addition, most companies now have mobile apps that can be used to find your property, if it is listed. More and more buyers are “going mobile” these days and you might end up being as invisible in that world as a “For Sale By Owner”.
Third is the need to deal with potential buyers. Buyers and their agents need to set up appointments and are likely to call at all hours sometimes with limited advance notice. A Realtor® will have an office that people can call for these appointments 7 days a week. A Realtor® will also try to pre-screen potential buyers and only set appointments for those that he/she feels are valid buyers for the property. Place a “For Sale By Owner” sign in your front yard and you invite the whole world to walk through your house.
The forth issue is one of time – time that the agent would spend sitting in open houses, so you don’t have to and the time that you’ll lose on the sale just due to it being a unrepresented sale. Without the benefit of the exposure that the Realtor® will provide for the house, through the Multiple-Listing Service and his/her advertising and marketing efforts, the unrepresented home is likely to stay on the market quite a bit longer than a listed property. Statistics tell us that an unrepresented seller’s house can stay on the market almost twice the average for a listed property in the same area. Remember that you’re making payments during that extra time and very little of that money flows to your equity bottom-line.
Fifth, todays buyers and sellers agree a full 89% of buyers used a Realtor®, and so did 88 % of sellers.
For Sale By Owner (FSBO) Statistics
FSBOs accounted for 9% of home sales in 2013. The typical FSBO home sold for $184,000 compared to $230,000 for agent-assisted home sales. Roughly a 20% loss to the unrepresented seller.
FSBO methods used to market home:
Yard sign: 36%
Friends, relatives, or neighbors: 28%
Online classified advertisements: 16%
Open house: 14%
For-sale-by-owner websites: 13%
Social networking websites (e.g. Facebook, Twitter, etc.): 7%
Multiple Listing Service (MLS) website: 7%
Print newspaper advertisement: 7%
Direct mail (flyers, postcards, etc.): 1%
Video: 1%
Other: 2%
None: Did not actively market home: 32%
Most difficult tasks for FSBO sellers:
Understanding and performing paperwork: 18%
Getting the right price: 13%
Preparing/fixing up home for sale: 12%
Helping buyer obtain financing: 3%
Attracting potential buyers: 3%
Selling within the planned length of time: 7%
Having enough time to devote to all aspects of the sale: 6%
Source: 2013 National Association of REALTOR®S® Profile of Home Buyers and Sellers
Home Seller Statistics
The typical home seller in 2013 was 53 years of age, had a median household income of $97,500, and lived in their home for 9 years.
88% of sellers were assisted by a real estate agent when selling their home.
Recent sellers typically sold their homes for 97% of the listing price, and 47% reported reducing the asking price at least once.
The typical home sold was on the market for 5 weeks.
39% of sellers who used a real estate agent found their agents through a referral by friends or family, and 25% used the agent they previously worked with to buy or sell a home.
Sellers who definitely would use same agent again: 65%
Source: 2013 National Association of REALTOR®S® Profile of Home Buyers and Sellers
Home Buyer Statistics
First-Time vs. Repeat Buyers:
First-time buyers: 38%
Median age of first-time buyers: 31
Median age of repeat buyers: 52
Median household income of first-time buyers: $64,400
Median household income of repeat buyers: $96,000
The typical home purchased in 2013 was 1,900 square feet in size, was built in 1992, and had three bedrooms and two bathrooms.
Among those who financed their home purchase, buyers typically financed 90% of the home price.
88% of buyers purchased their home through a real estate agent or broker—a share that has steadily increased from 69 percent in 2001.
Buyers who definitely would use same agent again: 73%
Information sources used in home search:
Real estate agent: 89%
Yard sign: 51%
Mobile of tablet website or application: 45%
Open house: 45%
Mobile or tablet search engine: 42%
Print newspaper advertisement: 23%
Source: 2013 National Association of REALTOR®S® Profile of Home Buyers and Sellers
Comments from my past Clients:
“Marty is the most knowledgeable and in-depth Real Estate professional I’ve ever dealt with, and I’ve hired him to help me buy and sell. I would recommend him to anyone seeking to buy or sell a home!” Kelly C.
“I hired Marty to market my house in South Jordan because of his experience and knowledge of the market. He kept me up to date on changing market conditions and provided valuable feedback on the best way to position the property for sale. He was also very easy to work with as I was an absentee owner. I recommend him very highly.”
Keith V.
“From the very beginning, Marty Gale was a straight shooter with excellent integrity. His hard work ethic and determination not only helped us sell our home but find one that suited our needs in our price range. He made our home buying experience seamless and fun. If I ever need to buy or build another home I will, without a doubt, use him as my agent. Thanks to Marty we are now enjoying our beautiful new house!”
Rodney F.
“Marty has sold me over a million dollars in real estate and I am very happy with the results. He has done a very good job of guiding us in home sales / purchase of our new home, investment properties and finance. I would highly recommend him if you are looking for a good, trustworthy real estate agent.”
Ron C.
I have dealt with Marty on two different occasions. One time selling and once buying a house. Both experience were very good. He is knowledgeable in all aspects of his business. He was very loyal to me as his client and I felt very comfortable working with him. I would not hesitate to recommend Marty to anyone who needed his service.
Merril B.
“Marty has helped me with a few real-estate endeavors. He has helped me sell my home and more recently he worked to help my growing family find a home in salt lake. Marty had all the resources available to me: home inspector, clean up companies, and others to help us achieve our goals in purchasing a safe home for our daughter. Once we put an offer in, he worked tirelessly to get the job done. We were on a tight time line and were able to find a house, purchase it, and move in to the house in under a month and half. Marty was efficient, smart, honest, and hard working to make this process easy and fast. I enthusiastically recommend him to everyone I know.”