Ask A Realtor: For sale by owner or broker?
Berkshire Hathaway HomeServices Colorado Properties
Dear Timm and Rick: I am getting ready to put my home on the market and have read about all the buyer demand and multiple offers. To maximize my profits and avoid commission payments, I am thinking I should go the for sale by owner route. It does not seem many sellers are utilizing this option and curious as to the reason(s).
– FSBO vs. Broker Seller
Dear FSBO vs. Broker Seller,
You are correct that buyer demand is very high and sellers such as yourself are in a great position to maximize profits. That being said, the saying that things are not always as they appear to be is a case in point for FSBO sellers. It’s like comparing apples to oranges by only focusing on the commission structure. Working with an experienced broker comes with many benefits, all aimed at making sure you, as a seller, leverage the buyer market to your greatest advantage.
Access to the MLS, the primary marketing and listing tool available to buyers and other realtors, requires a real estate license or partnering with a broker, which would involve a fee. While there are companies that profess “free or flat fee” access, these come with stipulations once you sell your house. Being listed in the MLS allows for syndication to all the major real estate websites which gives you unmatched global reach.
Presenting your home in the best possible light
Most of the FSBOs we see have smartphone snapshots that don’t present their home in the best possible light. Experienced agents have a wide variety of marketing tools at their disposal such as professional photography, drone imagery, 3-D virtual tours and video, all paid for by the listing broker. If a property has sub-standard marketing, it will often get overlooked, leading to fewer showings, fewer offers and ultimately a lower price for the property.
Market value pricing
Many FSBOs will look to a website like Zillow to determine property value and as a result overprice or underprice their property. Real estate algorithms like the Zestimate can’t keep up with the fast pace of our seller’s market and are often inaccurate. Seasoned brokers know the market inside out and have the experience and knowledge to price a property correctly.
Whether this is your primary or secondary home, handling showings on your own can require you to take time off from work or worse yet, travel back and forth if your primary residence is outside the area. Access and security are important considerations. Listing brokers will attend showings and ensure the property is show ready with lights on, blinds up, a comfortable temperature and just the right ambiance. These seemingly small, but important steps can make the difference between a successful showing and a one where the property is eliminated due to less than favorable showing appeal.
Preparing a property to go on the market and showing the property are just the first steps. In a seller’s market you have to know how to handle multiple offer situations and oftentimes there is still a negotiation that needs to take place. Contracts need to be prepared and the transaction needs to be managed through the due diligence period – and this is where the majority of transactions fall apart. This is also where an experienced broker really earns their salt. He or she will not only help you get top dollar but will also keep your transaction on an even keel all the way through closing.
The use of professional photography and 3D home tour technology, all arranged by your broker, has, in some cases, sold homes before a buyer even steps foot in it. Without the professional presentation, the home will not typically garner the interest it deserves.
Networking within the brokerage community can and does elicit more and better qualified buyers. We all work together with the ultimate goal of getting you, the seller, as well as the buyer, what you need and want…the most return for your sale and for the buyer, their dream home.
From emotional to business transaction
“The home is where the heart is!” Many memories, sometimes a lifetime full of them, have been made in your home. Once you make the decision to sell, you have committed to shifting from the mindset of those memories being yours to the thought process that you are willing to let a new buyer create their own memories in the home. An experienced broker can help you navigate these situations and allow you to separate the sale of the home from the memories created within it.
Net to seller fallacy
An argument against listing with a broker is that a seller will net less money because of commissions to be paid out. An experienced broker can make the homeowner many percentage points more than the low single digit commission percentage for the listing side. The seller, whether a FSBO or not, will typically still be paying the buyer broker commission. Formally listing your home with a professional Realtor will, in some instances, produce sales 10-20 percent higher than when a seller tries to do the process on his/her own. This is why brokers, along with sellers, are having a banner year. Our success is directly correlated to seller – and buyer – success and making sure it’s a win-win for all parties.
Good luck with your sale,
Timm & Rick
Timm Kluender and Rick Messmer are 25+ year Vail Valley residents and top-producing, award-winning broker associates with locally owned Berkshire Hathaway HomeServices Colorado Properties. Timm specializes in the resort markets of Vail, Beaver Creek, Arrowhead and Cordillera. Rick’s knowledge and experience spans from East Vail to Down Valley, with a specific focus on Eagle, Eagle Ranch and Gypsum. Timm can be reached at 970-471-3472 or email@example.com and Rick at 970-376-0041 or firstname.lastname@example.org.