Do you need a broker when selling your home?
If you are selling your home and do the math on how much you’ll spend on a real estate broker, the figure can take your breath away. This sticker shock makes many home sellers question whether they need a broker at all, or if they’d do better on their own and save money. Though, according to the National Association of Realtors, “91% of sellers were assisted by a real estate agent when selling their home,” based on 2018 research. Perhaps you are wondering: do you need a real estate broker when selling your home? Here are some things you should know.
Not all real estate brokers are created equal
The average percentage a seller pays in real estate broker fees when selling a home is 5%. On a $500,000 home, that comes out to $25,000. But here’s the thing: you pay the same for a seasoned, savvy broker as you do for someone who just got their license and has little experience.
Like most things in life, it really pays to shop around and evaluate your options. The three things you should look for are:
What is the track record of the broker?
How many homes have they sold recently and at what price? Brokers who are good at their jobs usually have strategies to price a home right and get a good volume of buyers to your home in order to sell it efficiently.
Have they sold your type of home in your specific market?
Real estate markets are hyperlocal, meaning that one area of a town may have a completely different sales environment and buyer that a different part of town. Brokers who will be most effective for you are ones who have experience selling homes just like yours in the same place as yours, as they will be familiar with the specific market you are in as well as the specific type of buyer you want to attract.
Do they have a plan that is well conceived?
Good brokers can take a look at a property and come up with a plan to make it sell for the most money possible. This can include things like staging it to attract a certain type of person or make it more attractive to a wider pool of buyers. It can also include attracting foreign buyers, for example, or certain types of potential clients who would value the features of the home the most. Brokers who are good at their jobs will create a comprehensive marketing plan that will drive the most interest in your home, and price the home accordingly.
Since they all charge roughly the same, then your strategy should be to find the broker that provides the most bang for your buck. In the context of a sale, that means, who will be able to deliver enough buyers to your sale in order to get the right price?
What makes hiring a real estate broker worth it
Will the real estate broker make you more money than they cost you? This is the defining question when considering whether you should hire a real estate broker. In the example above, a seller who has a home listed at $500,000 will pay a broker on average about $25,000. Will a real estate broker be worth $25,000 in getting a higher price from your home?
It can be hard to tell. However, think about it this way: will you, on your own, be able to get enough folks to the table quickly enough to sell your home for the best price possible? Many brokers are adept at putting together a strategy that has a lot to do with timing, staging and pricing, in order to get multiple offers. Orchestrating a bidding war can result in your home selling at an even higher price.
Other factors: convenience and advice
If you decide to go it alone, do you have the energy and time to do the tasks associated with selling your home by yourself? Many people find they don’t have the time or interest in managing a home sale alone.
Good real estate brokers can also provide you with advice along the way, such as issues that might be off putting to potential buyers that can be fixed ahead of the sale period. They can also give input in some pitfalls or home sale process issues that you might have questions about.
Do be aware that they have a financial incentive in getting the transaction done, and done quickly, as then they get their commission. So you do need to think independently about whether the advice you are getting serves you better or them better along the way.
When you should not hire a broker
If you have the time, aptitude and ability to create an effective plan to independently sell your home yourself, then you can certainly save a lot of money. If you really research the process, and particularly you are in an area where it is possible to find buyers on your own, or with minimal marketing, then you could very well save yourself some money.
Bad real estate brokers who cannot price a home properly, nor get a great volume of buyers to your home are definitely not worth hiring, simply because they will cost you more than you will make. Good real estate brokers who can orchestrate a higher sale price for you that justifies their commission are worth hiring, particularly if you don’t have the time or energy to go it alone.