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Should I Use a Real Estate Agent When I Sell My House?

You have decided to sell your house. One of the threshold questions which you must answer is whether or not you will use a real estate agent to sell the house. In cases where the owners are selling a house without a real estate agent, this is known as a "For sale By Owner" or FSBO (pronounced Fizz-Bo).

There are many factors to be considered in making this decision. Most persons who choose to sell a house on their own do so in order to save having to pay the agent a real estate commission. In the Ocean County area, the usual commission is between 5% and 6% of the sales price. In devising whether to use the services of a real estate agent, the owner should consider the advantages and disadvantages of having a real estate agent.

Advantages of Using an Agent

EXPERIENCE. Most home owners sell maybe three or four houses in their lifetime. They do not have much experience selling houses. Agents, on the other hand, do this for a living. They take part in more real estate sales in a year then most people do in a lifetime. This experience helps you to sell your house more effectively and to make the process go smoother.

MARKETING. Agents have access to the multiple listing service (MLS). This is a computer database which lists all houses for sale by real estate agents in a certain area. The MLS gives agents the ability to make information about your house to thousands of other agents. Anyone looking for a house using an agent will be able to see information about your house.

PRICING. Agents have training in determining how to price your house so that it will sell at the highest price. If a house is listed for more than it is worth, it is likely that it will not receive any offers and you may waste valuable time waiting for a buyer. In addition, agents also know the market trends so they can guide you as to how to market your house for the highest price.

SCREEN/PRE-QUALIFY BUYERS. Agents can screen potential buyers to make sure that they have the financial ability to purchase your house. Most agents work with mortgage lenders who can pre-qualify a buyer for a mortgage. This prevents you from wasting time with a buyer who cannot financially purchase your house.

ASSISTANCE. Agents are available to assist you in the various task needed to make the sale go smoothly. They can show your house to prospective buyers, open the house for the various inspectors, and in general, be there to explain the many processes that go on in a real estate sale.

Advantage of Not Using an Agent

SAVINGS. You save the amount of the commission. Obviously, if you sell your house without an agent, you will not have to pay the agent's commission. On a house selling for $300,000.00, the savings would be $18,000.00 based upon a 6% commission.

Disadvantages of Not Using an Agent

LIMITED MARKETING. Because there is no multiple listing service, you would have to market the house yourself. Usually this would mean a sign on the front lawn and advertising in newspaper. Your ability to attract buyers is limited by where you choose to advertise. In addition, the cost of advertising in the newspaper would be out of your pocket and could prove costly.

DETERMINING THE CORRECT PRICE. Without an agent, you would have to determine what price you should ask for your house. This is the area that I see most people having the biggest problem. Either they list their house for more than it is worth and receive no offers, or they list their house for less than it is worth and do not get the best price for the house. Determining the correct price may not be an easy task if you do not know what is selling in your area. More than likely, you would need to hire an appraiser to determine what comparable houses are selling in your area.

LIMITED ABILITY TO SCREEN BUYERS. If you sell your house on your own, you will have to screen potential buyers. This may not be easy if you do not have access to mortgage lenders. You could waste time with a buyer who cannot afford to buy your house.

NEED TO DO YOUR OWN WORK. Without an agent to assist you, you have to make yourself available to show the house when a buyer calls. You will find that if you are not available to show the house, the buyer may look at and buy another house and never see yours. Also, some people are inconsiderate and make an appointment to see your house and then never show up, thus wasting your time.

In summary, I think that when you weigh the advantages and the disadvantages, you will see that it is smart to use an agent to help you sell your house. As an attorney who has handles more than 3,000 real estate transactions, I always suggest that people use real estate agents. They are professionals who can help you get the best price for your house and can assist you in the many actions that need to take place in order to have a smooth closing. And in case you were wondering, when I sell my house, you can bet that I will use an agent.