Is Real Estate Possible without an Agent?

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Many people in the country have been hurt by the mortgage crisis. People are getting foreclosed upon; they can’t make their payments. Because of this, we are all feeling the pinch and we are tumbling into recession. Many people are trying to sell their homes themselves. Here are some tips to work without a Realtor, sent in by JcGeekGirl.

  • YOU DON’T HAVE TO USE AN AGENT! I cannot stress this enough. Agents have made the process of buying/selling property such a mystery, many people are afraid to embark on this journey without one. However there are instances where an agent is a good idea – such as:
    • You live in another state from the property and need someone to show it
    • You don’t have the time to hit the pavement and do the work of a real estate agent to sell on your own.

    There are many reasons to try and get the “by owner” thing to work for you. If you are willing to act as your own agent, and do the work of one, you can save thousands in commission fees – which in some cases, means the difference in selling the property and getting stuck with it.

  • You still need to advertise! There isn’t an agent doing the work for you. Place ads in the local paper, “for sale” magazines, put signs up where you are allowed to post handbills… and hold an open house as often as possible. The more people you advertise to, the more people will see the property, increasing your chances of selling (and possibly the length of time in which you sell).
  • The MLS is your friend – use it. MLS is the Multiple Listing Service – the database realtors use to search out homes for buyers. For years, “by owner” sellers have not been able to use it, but things are different now. Many agents across the country will offer you an MLS and/or Realtor listing for a flat rate. It may be the only service they provide at that low, flat rate. That potentially puts your property in front of millions of people that wouldn’t otherwise see it. You do need to offer a commission rate for a buyer’s agent though (it’s only fair, if you’re using the realtor database to advertise). With some slight negotiating room, the standard rate is 3%.
  • Not all “By Owner” websites are the same. Each one is owned by a different company. When a friend refers you, find out exactly what the address is, so you know where you are really getting referred to. When you place an ad, write down the company name, address, phone number, email addresses and your specific ad information. This is very helpful to have so you can come back to it later. Many companies take advantage of the play on words – different angles of “For Sale By Owner”. Some charge more than others, too. Before using one of these sites, research all of your options carefully. Check the traffic history of the site. Unless the Terms and Conditions of Use on the site (or any contracts state it), you can put your property out there for as many people to see it as you can afford to advertise. There are many who list their property on more than one of these websites. Craigslist is also a popular place to list property for sale. Some auction their homes on eBay. You have many options available to you when you’re not bound by an “exclusive listing rights” contract.
  • Now that you’ve listed your property somewhere, it’s time for the contacts and inquiries to roll in, right? Are you prepared to sell to the first person that calls, or visits the property? One way to be prepared is to ask all interested parties to bring a “mortgage pre-qualification letter” from their lender, stating that yes they can afford this house. I mean, what is the point in showing the home to someone who can’t buy it? It wastes everyone’s time. You can even offer the services of a lender you’ve lined up, and put that information in your ad or your open house invitation.
  • Times are tough. Scammers are getting more aggressive as the days progress. You need to be careful and research your contacts, and the people sending you emails regarding the property. If they are out of the country on assignment and their wife is really interested in the property, what is your bottom price? Think twice about it – it might be the difference between parting with $8,000 (give or take) with nothing to show for it, and a legitimate inquiry about the property. The biggest tip about anything on the internet – if it SOUNDS too good to be true, it probably is. Contact your local Consumer Protection office if you get a fishy email, and report it to the service where you’ve listed your property as well.
  • There is no shame in admitting you can’t handle the closing of the sale. Some people can do this process entirely on their own – but many use the services of a real estate attorney and a title company to handle all the legal aspects of the sale, disclosures that need to be made about the property, the list goes on. If the closing process sounds overwhelming, don’t be afraid to call someone.
  • Google is your friend… as always. Use Google to find out those real estate terms you don’t understand. Research what “staging” and “short sale” and “lien” mean. There are thousands of articles online to help you through this process from beginning to end. Don’t try to reinvent the wheel by braving it on your own. The information is there – utilize it.
  • Nobody wants to buy property they haven’t seen. Properties listed on the Internet get viewed more if they have a photo or two. Better yet, have a lot of photos and use as many as you can. This doesn’t mean have 6 shots of the tub all online – this means let your house tell it’s story…. “I have 4 bedrooms, 3 bathrooms, a pool, Jacuzzi, and a handmade brick barbeque area.” The goal of the photos is to take the personality out – take the photo of the room, the area, not the stuff that’s in it. An empty room in a photo can be good and bad. It may show “immediate move in condition” but it may also show that the property has been on the market for so long, the owner has already moved out and moved on. Even if you have to borrow or rent furniture to take pictures – it’s better than no pictures or an empty-room photo.
  • Lastly, have patience. It takes realtors a while to sell houses these days – you can be just as lucky trying to sell it yourself. Make sure you’ve had a physical appraisal done on your property to find out the value, find out what comparable homes have sold for in the area (you can search online for services that offer that information in a quick and easy digestible format, or you can take a day trip to the county office). Current national trends put the average time to sell a home (agent or not) at 4-6 months – some areas longer due to the market being saturated with soooo many properties for sale.

Disclaimer
This advice is just that… advice. It in no way replaces the professional advice of a lawyer or Realtor. Please be sure to seek proper legal advice in your area, to cover all of your bases.

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34 thoughts on “Is Real Estate Possible without an Agent?”

  1. Pingback: 4Realz.net
  2. I am a Realtor, but don’t let that put you off. Pretend that your best friend is making the following points:

    Selling a home is a major event– one of the big stresses in life. Part of the stress is inevitable. But a lot of it is due to doubt. An agent can answer many important questions for you.

    Selling a home is incidental to what you really need to be doing. Let an agent do his job so you can get ready to move.

    How will you set your price? If you can get the information you need, can you interpret it? Realtors don’t make real estate mysterious; it is an area of expertise that is best understood by professionals. I don’t try to repair my car because I don’t know enough about it– even though it’s just a dumb machine. I have the work done by a professional.

    How will you market the property? How much time will that take? How much will it cost? And you’ll have to pay for marketing as you go.

    How long will it take to sell your home? How will that affect your move or other goals?

    How much will you actually net from your sale? Will you be surprised by the expenses of selling? An agent should be able to prepare you for the bottom line and how you’ll reach it.

    Realtors are set up to get buyers qualified for loans. Most will not show a property to an unqualified buyer.

    Having an agent gives you a level of personal safety, as you will not be personally letting strangers into your home. You also are protected from giving away information about your reasons for selling, your time frame, and other sensitive information that a buyer could use to his advantage. Most sellers are prone to say more than they should about such things.

    Realtors are familiar with the psychology, logistics, and legal ramifications– required disclosures, contract procedures– of selling, and with transaction management. Did you anticipate inspections, appraisal, and repairs? Do you have time to handle them?

    Buyers expect to be able to reduce offers on FSBOs by the commission amount. If you’re not paying commission, why should they?

    In a buyer’s market, you need every edge in marketing and pricing to reflect market trends. Buyers in such markets can be aggressive. Are you ready to face them yourself?

    You’re willing to work with a buyer’s agent? Then you’ve cut your “profit” in half right there. Never mind that you’ll be walking into an adversarial situation (contract negotiation) at a disadvantage. You can’t really expect the buyer’s agent to be as fair with you as with the buyer, however hard he might try. You should have an agent in negotiations.

    All these Realtor services (for buyer and seller) are included in the commission, which is not paid until closing. What is your time worth? You have to pay yourself– and that $200-an-hour lawyer– as you go.

    Research shows that you’ll net more from a sale if you have an agent.

    I am perfectly capable of selling my own home when the time comes. Yet I’ll have a Realtor. It will be worth the money.

    Thank you.

  3. Interesting post Chris. When the market gets tough, people look to cut expenses. I think you might also suggest creating your own will, maging your own stock portflio, and growing your own crops and beef.

    The “savings” you blog about are always in dollars and never in time, stress, or actual sale price. In fact, sales with an agent have a higher price than those without. The easiest time to try to sell yourself is in an appreciating market – but you’ll probably leave dollars on the table then also if you fsbo.

    Agents get criticized because of the apparent large fee in the sale of a property. But they actully make a little on a lot of homes they sell – unless they own their company. By the time an agent sells ahome, they have been on the job for at least 60 days straight. In my market, it is more like 120-240 days. By working many properties and customers at the same time, agents can make a living. If they relied on one sale, they’d be doing more blogging than selling.

  4. With one exception, I think you’ve fairly described the issues and challenges involved in a real estate transaction. You left out the emotional component, which cannot be ignored. Unless you are an investor, your personal feelings will come into play at some point, and an objective third party can be invaluable. By describing the challenges involved in selling yourself, you may have inadvertently made the case for hiring a broker . I’ve been a homeowner and real estate investor for more than 20 years, and a licensed real estate agent for the last two and a half years. Prior to being licensed, I completed 14 real estate transactions; 11 were broker assisted and 3 were not, so I have experience with this issue from all perspectives. I understand that giving up 6% of your equity is a big pill to swallow, but sometimes it’s the best way to reach your goal. That said, if a homeowner feels comfortable with the selling process, I think they should give it a try. If it doesn’t work, hire a broker. After you’ve tried it yourself, paying that commission will feel more like money well spent. From a buyer’s perspective, I see no reason to go it alone. A good agent who knows the market will save you money, and keep you from making a mistake on what will likely be the biggest purchase of your lifetime. Again, the emotional component is huge here. As much as we’d like to think that we can be objective and detached, it just doesn’t work that way. Buying a home touches the most deeply rooted human emotions….security, safety, pride and sense of self. An objective, experienced real estate professional will work to assure that the choice you make will be one you are just as happy with five years down the road as you are the day you move in.

  5. Perfect article! I am West Toronto realtor and my friends often ask me, if I am not worried that people start to sell homes on their own, with help of internet, online auctions and similar tools. I answer:”No I am not.” Why? dealing with real estate is not just simple one day act – you have to study marketing, locations, property trends, you have to be able guess maintenance costs, you have to understand both buyers and sellers thinking – and this cost time and nerves, lot of time and lot of nerves! The more you are specialized, the better, so if you are developer, don’t deal with selling and vice versa.

  6. Real Estate for the most part is an offline transaction. Looking online for property or for comparable data is one thing. Admittedly most Realtors are not very tech savvy.

    First I want to make a distinction between your friend that just got a license and a seasoned professional there is no comparison.

    I think the emotional factor is where buyers and sellers lose the ability to finish the deal. I am NOT saying that about all people and all transactions.

    Real Estate transactions usually have a lot of emotions before the real estate ever enters in the picture.

    For example- Marriage, Divorce, Death, Birth, Debt, Job Transfer, Lost a Job… I don’t know what percentage of transactions that those items encompass but based on my experience a lot.

    When good folks are involved in those circumstances they are in need of a reliable and an experienced agent to help them make decisions and negotiate. They can be very vulnerable and become shark bait. The investment seminars that sell CDs and programs teach buyers to seek out this type of seller.

    Then there is the selling and buying of another home. That process can be overwhelming for agents let alone a family trying to do it in their spare time. Combine that with the financial decisions that are being made. Take a family that has a total gross income of $90,000. They are selling a home for $200,000 and buying another for $350,000. Let’s say the $90,000 nets $7,500 per month, they are now involved in $550,000 worth of transactions. That is almost 75 times their normal financial comfort zone. Combine all that with moving a family and you have a lot of emotions. Not just the one family, but sometimes these transactions have a domino of 4, 5 even 6 families. This is where a well seasoned agent shines.

    So in summary you do not need an agent to sell or buy a home. But like accountants, attorneys or a financial advisors, the GOOD ONES don’t cost money they make you money.

  7. I’m not a realtor, but I think a previous post made a great point that you are outlining dollars an cents and not looking at knowledge level, stress, and just plain hard work of finding the right buyers…..As a teenager I had a volkswagen bus and everybody told me they were easy to work on and I could save money because of this because it was a good investment…..clearly ignoring the fact that the engineering was ww2 and I would NEED to fix the thing on a regular basis ….. some things I could fix and other things not….but at the end of the day, saving money doing the work myself wasn’t worth it…. I got what I paid for….and even though I could rebuild the transmission and take out the engine myself it wasn’t worth days worth of time….. the same is true here…..I’m also not seeing your deductions for costs involved for missing time from work…… you aren’t expecting to not have frequent time off work if you are selling your home are you? Staging, meeting buyers on their schedule, etc…..

    I think you are also a bit naive in thinking that most people are actually sophisticated enough to sell their home…. you would be surprised …. many are not and many can barely hear a counter-offer lower then their asking price without getting upset or feeling insulted….hence the usefulness in having an experienced third party….

    While I think your ideas make sense on some level and are well meaning, I think you are missing the bigger point. Sure when I’m ready to sell one of my companies I could do it myself and save money, but am I really not going to hire the right legal team? I know better and realize I need their input, why gamble to save a buck that could cost me exponentially more…. I wouldn’t and neither would you….. the same can be said for selling a home. Unless you know what you are doing and are the exception to the rule, the odds are that selling your own home is being a penny wise and a pound foolish…..

  8. That’s a pretty drastic thing to say about a guy who I have learned so much from, could you tell us all just exactly what he has said or done that makes you publicly call him a scammer? Be honest now.

  9. To mislead someone you need to tell some truth mixed with error. Error in its naked form will not mislead someone. Alot of what he says is true about investing and starting your own business, but he misleads people. I dont have time to go into details but in general about buying investment property’s with no money down. I dont care how you try to tweak it, you need money and a lot of it to be able to make some money in real estate.

  10. Its all over hyped for you so you will pay $4,000 “to learn about how to become millionaire.” They make more money selling you there material then investing in real estate. I have invested in real estate, but it was not with 0 money down, or the other way to put it getting something for nothing, and if you do get something for nothing then most likely you will get in trouble like the people in California what bought a lot of homes thinking the value will continue to go up and now stuck

  11. cont… paying high intrest, and the market value of there homes continus to go down. I had to put up $100,000 of my own money,
    cash, it invest in a proprty on a miner scale. I know most people cant put up that kind of money, thats why most people wont succeed in real estate. Thats what the Gurus wont tell you, because they dont care if you succeed or not, all they care about is geting $4,000 from you.

  12. Let me sum it up for you so it’s easy for everyone to understand. I’ve bought and sold over 300 real estate properties. So when it comes to buying or selling a home I know how to market, show, and negotiate a lot better than someone who has bought and sold 1 or 2 homes. When you are making an offer on a home based on some valuation tool on a website the seller could really care less what your web tool says. In fact based on my experience some of the sellers I’ve worked with would tell you where you could stick your web tool. They respect the fact that 7 days a week for many years this has been my profession. I know what attracts buyers and how to negotiate for my client based on personality types and motivation. I can go out and buy website making software for $39.95 but for some reason professionals are still getting paid thousands of dollars to freelance and build what’s supposed to the same thing. And that’s just a website.

  13. You can say so! But not in all the cases. Most of the time, it is found that property dealers make the property deal easy for the customer. If people like to get property deal in NCR can visit this site or can call at 800-232-2343 or 0120-4338222 for immediate queries related to the property details.

  14. it’s possible, but a seller or buyer would need a lot of knowledge to be able to work on the buying or selling of properties, or things would go out of their hands and would fail

  15. It is no best a abstruse that the web is the best abode to advance
    your rentals, and the absolute acreage bazaar is no different.

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