The #1 reason given by sellers in trying to sell their own property is their wish to save themselves the money on the commission.
Now, I will admit that when Andrew and I bought our first house in the early 90s, we did not use a real estate agent. We found a cute little bunaglow that was for sale by owner. I fell in love with the house, it was just the right size for us, and the homeowners were sweet people.
We made the deal happen with little fanfare and headache. It was probably the easiest real estate transaction I was ever a part of - and I have bought and sold my own share of houses.
The first house Andrew and I purchased in the early 90s.
Merriam-Webster defines risk as possibility of loss or injury; peril. So, what does risk have to do with real estate?
Well . . . things and times, change, and these days, selling property involves risk, and those risks are not worth saving that commission.
But just what are those risks?
Risk #1 - Legal Risks
These days, buyers, and especially sellers, face any number of possible legal risks in real estate transactions. Our litigation-happy society makes it easy for individuals to sue for any little matter they are unhappy with.
Standard documents are written to bullet-proof most legal wranglings, but they are not fail-safe. The last thing you, as a seller, want to do is lose money because a lawsuit has been pressed against you while or after selling your home.
While using a real estate agent will also not fail-safe you against legal risks, it can go a long, long way to minimizing the fallout from such issues.
Risk #2 - Transaction Risks
Not only can a myriad number of delays stall the closing process, from ordering surveys to getting appraisals to lending complications, but a number of steps from contract acceptance to closing are time-sensitive. This means that certain things must be done by certain dates or the whole contract is put in jeopardy.
Real estate agents are more than aware of these time-sensitive dates. They know who to call to make sure everyone involved in the transaction is aware of these dates. They also know to create and amend paperwork and contracts when some dates have to be pushed back through no fault of the realtor or the buyer and/or seller.
Home is where stories begin . . .
Risk #3 - Negoation Risks
Negotations in real estate go beyond the price, and like it or not, a great deal of the contract process involves negotiations. Everything from option period, to option period fees, to who pays for the survey, the appraisal, home warranties, and more can be negotiated. It is even possible to negotiate lending points and seller concessions.
These negotiation tactics are not strategies a homeowner or home buyer can typically employ, but they will help every buyer and seller move toward a win-win for both parties.
Risk #4 - Pricing Risks
This is probaby the greatest risk to selling or buying property on your own.
Realtors, like appraisers, use a comparative market analysis when deciding on a selling price / value price for a property. Not only does a listing agent employ these strategies, but a buyer's agent will as well to ensure their client is not overpaying for a particular piece of property and/or to help with an offer price.
And let's face it, no one wants to overpay for properties, nor do they want to undervalue their own property.
Tip #5 - Missing Out
We live in a digital age, and that age has certainly changed the face of real estate in the last forty years. According to the National Association of Realtors, in 2022, 97% of buyers found their homes on the internet. This leaves a mere 3% that found their homes in other ways, either by driving past the property, buying from a friend, etc.
This means that for sellers and buyers, access to a local Multiple Listing Service (MLS), not just Zillow or Redfin, etc., is vital to getting the word out that a home is for sale. Real estate agents have access to MLS services. They can not only list properties for sale, but they have the database of available properties at their fingertips.
And, as a word of caution, realtor sites like Zillow, Redfin, Realtor.com, and others mine their properties largely from local MLS listings. They also do not update their sites like the local MLS listings do, so you may not be finding not only newly listed properties, but you might find properties that are no longer available.
Don’t Take the Risk
Times have changed, and knowing the risks can go a long way to minimizing difficulties in a real estate transaction. Real estate agents not only are schooled in those risks, but they are constantly updating their knowledge in the area of legalese in order to provide a quality experience for their clients.
As I oftentimes tell people, I don't sell real estate. I HELP others sell or buy real estate. After all, it's your house and your story, and I want to help you write the best, most enjoyable chapter you can on the next step of your journey.
Donna Hechler Porter is a real estate agent with Keller Williams Elite Realty in Baytown, Texas. An educator, a published author, and an arm-chair historian, Donna runs a small publishing business in addition to educating people about how to build future wealth through home ownership. Feel free to contact Donna at dhporter@kw.com.