After soaring for years, home prices have fallen sharply, and sellers want to get as much as they can for their homes. Sometimes, they mull over the idea of going it alone. After all, you can go to any open houses on your own, and you can make an offer on any home on your own. Likewise, you can put out signs and sell your home on your own, too.
So why not? Why not dump the agent and save some big bucks? After all, a 6% commission on a $300,000 home is a not-so-insignificant $18,000.
Well, there are good reasons to stick with the traditional buying-and-selling process. Real estate agents may look like they're earning easy money, but appearances can be deceiving. Here are some things to consider.
Get what you pay for
A good buyer agent can help you spend your dollars wisely and save you money, despite what he or she earns in commissions. Before I bought my house, my agent told me several times to lower my bid. He said it wasn't worth anything close to its asking price. He showed me dozens of homes and spent a lot of time doing so. He also persuaded the seller to sell to me.
And when my parents used him later, he found a great house they hadn't even noticed, whisked them quickly off to see it, and helped them win a bidding war for it.
If you're selling on your own, you might not have a good handle on what your home is worth. A not-so-good agent might entice you with promises of high values, but a good one will give you a realistic expectation. On your own, just using online resources won't always give you the most accurate information.
The folks at Zillow.com, for example, have said that Zestimates, their estimates of home values:
... are designed to be a starting point for consumers who want to learn about the value of homes. We make every effort to explain on our site the role of Zestimates as a research tool, as well as to clearly display our rates of accuracy for every area we cover.
Most of us buy or sell houses only a few times in our lives. Our experience with the process and its intricacies are rather modest, compared with a seasoned professional who has a full bag of tricks. For example, the house I finally bought was slated to be sold without its major appliances. My realtor asked the seller whether she would sell me the oven, fridge, washer, and dryer for $1, and she said yes. I might not have thought to ask.
Now that I've sung the praises of real estate agents, let me also warn you about them. They're not all created equal. When you look for one, don't just go with the cousin of a good friend unless you're confident he knows his stuff. Seek out the ones with glowing recommendations. It will be worth it.
Meanwhile, with or without an agent helping you, you might find some useful information at sites such as Zillow, Trulia.com, Move's
If you're interested in more home-buying and -selling topics, visit our Home Center, which features lots of money-saving tips on mortgages and other need-to-know items. You might also want to check out these articles, especially if you'll be buying a new home soon:
- Don't Get Crushed by Your Home
- So You Want to Be a Landlord?
- Falling Into the Subprime Trap
- Buying a House Is Easy!
This article was originally published on June 14, 2007. It has been updated.