With the growth of internet possibilities in the pas 10 years, selling your house by yourself has not only become an interesting avenue but also a way to save a lot of money. Depending on where you live and the current market, a realtor can ask for a 4%-5% commission on the price of your house. If Canadian investors think they are getting fooled by mutual funds asking for 2% MER’s, imagine how bad you are getting fooled by realtors ;-).
So you already guessed that I am not using a realtor to sell my house. I’ve actually did both in the past and to be honest, I didn’t much difference when I took a realtor… besides the bill at the end of the transactions! However, there are still pros to use a realtor:
Pros of using a realtor to sell your house:
– They get more exposure (they usually benefit from a bigger internet website to show your house).
– Big realtors have a mass of buyers that could visit your house right away.
– Several people use realtors to buy properties. If you are not listed with a real estate firm (i.e. you are not paying commission to realtors), you will never have those people come and visit your house.
When I think about the pros of using realtors, I’m able to find a few. However, in this (small) list, there is nothing I can’t overcome considering the huge commission I would have to pay to benefit from “the advantages of having realtors”.
Cons of using a realtor to sell your house:
– They are expensive.
– They add an additional party into a negotiation. Therefore, some stuff can be lost in translation.
– They usually convince you to sell at a higher price to get the contract and then, drop your price 1 month before their contract ends just to sell your house.
– They will end-up considering their commission vs your needs (that’s human nature anyway!).
– The realtor doesn’t clean up your house before a visit. So you still have the biggest part to do.
Since about 85% of buyers will shop their next house on the internet, I think that the most important part is to be on the net. If you can find an important independent network (we have bytheowner.com for Canada), you can get as much exposure as someone who is with a realtor.
After some more thoughts, I wouldn’t say that realtors are useless. However, they are too expensive for my taste compared to selling by your own. In my personal case, it cost me $800 to put ads on the internet (ads are good until I sell my property). If I would have sold with an realtor, the cost would have been around $18,000… Do I have to say more?
What the Money Mavens Think About it?
Read the thoughts of the other members here:
Should You Use A Real Estate Agent To Sell Your House? @ Canadian Finance Blog
Real Estate Agents: Why You Rarely Get What You Pay For @ Len Penzo
Using A Real Estate Broker? @ Joe Taxpayer
Should I Use a Realtor To Sell My House? @ Fiscal Geek
Mike, aka The Dividend Guy, authors The Dividend Guy Blog since 2010 and manages portfolios at Dividend Stocks Rock. He is a passionate investor.