How to Spend Money Wisely » Real Estate

Should You Use a Real Estate Agent to Sell Your House?

Should You Use a Real Estate Agent to Sell Your House?

Should you use a real estate agent to sell your house? With home listings up 20% in Canada over last year, this question has come up for many people lately. There are pros and cons to either using a realtor or selling your house on your own.

Selling Your House With a Real Estate Agent

While the commission paid to a realtor can seem like a loss of profit when you sell, there are benefits to hiring someone to help you sell your home.

A real estate agent can give your house more exposure than if you sell on your own. Not only do they have access to list on MLS, they may also promote your listing in magazines for home buyers and on their own website.

By hiring a realtor, you also gain their experience in judging the price you should list for and ultimately what you should be willing to sell at. Their experience is an asset when it comes to finalizing the agreements; pointing out differences between multiple offers and helping you choose the best one.

By far, the greatest benefit of having a realtor on your side is during the negotiating process. Having a real estate agent that is a good negotiator can possibly cover their entire commission by not leaving money on the table when it comes to settling on a final price.

Selling Your House Without a Real Estate Agent

The obvious benefit is that you can save money by selling your house without a real estate agent. By not paying a commission, you have room to lower your price to stay ahead in a competitive market. Even after adjusting your price, you could be left with some additional profit on your home.

If you’re confident about being able to negotiate the deal and have the time to be available for house showings, selling your house without a realtor can be a great opportunity to maximize the profit from your house.

What Other Money Mavens Think About Using a Real Estate Agent

As our first group project, some of the Money Mavens wrote about the same topic today. Check out their opinions on whether or not they would use a realtor!

Comments

  1. TheDebtHawk.com

    Tom,

    Are the “For Sale By Owner” businesses that will list your house for sale on MLS popular in Canada? These companies became very popular in the US during the housing boom. I think that they are a great value.

    -Fred

    • Tom Drake

      Fred,

      FSBO is very popular during hot markets here too. Not as much need for a real estate agent when houses are selling within a week.

    • Mike

      Leading fsbo+MLS companies:
      ComFree (they bought duproprio in QC, bytheowner and some western Canada)
      PropertyGuys (national franchise, not a r/e brokerage)
      LetMeList.ca (Ontario, brokerage)
      MyCondoListing.ca (Ontario condos, brokerage)
      Grapevine (mainly Ottawa .. personal touch)

      Each has slightly different specialties, pros/cons and price points (cost for listing packages and/or extra charges for MLS)

  2. Roshawn @ Watson Inc

    It could also take more time to sell your home without an agent, which could further diminish, if not eliminate, the savings from not paying the commission.

  3. Vancouver Jay

    I’d say that using an agent is more comfortable for most of people. The advantages of both ways are described very well in this article, but selling a house without a professional real estate agent can often become very complicated, exhausting and time-consuming, especially for someone inexperienced. And if the agent is really good, he will probably be able to sell your house for a better price – I mean, in most cases, you’re not going to save that much when selling on your own.

    Jay

  4. Len Penzo

    Nice post, Tom.

    While I advocate going FSBO, agents are fine for people who aren’t willing/able to take the time to do their own research and burn a little shoe leather selling their own home.

    I’ve sold a home without an agent – after trying unsuccessfully to sell it with an agent – and it really wasn’t too bad. Real estate attorney’s can help you with negotiations and paperwork for pennies on the dollar when compared to amount the agents take in commissions.

    All the best,

    Len
    Len Penzo dot Com

  5. Mike @ Green Panda

    I don’t think that Realtor’s experience will play a lot while selling your house. Not for 5% of the price as comission though 😉

    I sold my first house with a realtor and realized how much I lost for a small benefit.

    I just sold my current property in 2 weeks without a realtor (by using bytheowner.com). They are very professional and offer one of the best photograph technology I have seen.

  6. Hannah

    I would say that it is better to get an aide from a realtor to sell my house. Realtors have more contacts and can easily look for buyer prospects.

  7. Wellwisher

    Hiring an agent only brings you people who are looking to buy a house with Agent as they don’t want to trust on FSBO transaction. But my experience with the agent resulted in sour relationship as they just want your money either you be a buyer or seller. I had both experience now and I can say they don’t care if you end up in buying a house that could have legal or other problem as they will show your the door and tell you that you did not ask so I did not tell. On the other side when you are selling they would want to get the commission by selling the house as soon as possible that might be in most case 1 day by listing the house at under price and if you can’t sell at the price you want they will always suggest to lower the price by saying it is not worth the price to sell. So if price is what sell then why an agent and not sell by yourself.

  8. Dino

    I think people are comfortable with an agent. There is a lot more to selling or buying a house than signing on the dotted line. Selling and buying houses is the realtors business, they have contacts and know what they are doing.

  9. Susan

    I like the unbiased description of the benefits of using an agent or not. I think one of the major factors in selling a house is also the paperwork, which can get a bit confusing for many individual sellers.

  10. takloo

    there have been a slew of FSBOs in Canada in the last 12-18 months…. some of the prominent ones:

    bytheowner.com (probably the best)
    propertyguys.ca
    propertysold.ca
    housemaxx.ca

    and some other portals like
    craigslist & kijiji

    • Mike

      “fsbo” for sale by owner and ‘flat fee MLS’ listing has become the standard. Since 90%++ of property transactions go through a MLS listing – and MLS is what populates the public site Realtor.ca – it is the core requirement to reach BOTH private buyers and agents representing buyers.
      We’ve found that dealing with ONE company simplifies the process. The brokerage responsible for managing the MLS listing and the website/person you buy the listing from is one and the same.

  11. Jordy

    Clearly there are people who are sophisticated enough to buy or sell without an agent, but I think generally it is prudent to put us to work. We are in the middle of what is going on, and know if conditions are trending up or down, we know how to write an enforceable contract, and can handle the people who are overbearing.
    Of course there will be people who have bad experiences with an agent, but from my experiences, I KNOW that it is not always the agents’ fault. There are a lot of unreasonable and unrealistic people trying to buy and sell real estate, and we can help to isolate our clients from high pressure people looking to steal someone’s home.
    People certainly are free to try for themselves, but without the systems that agents have designed and paid for, there will not be many people coming to look at the listing, and if it does sell it will be for a lot less. One thing that I feel quite sure of is that if more people are going to try to sell there own homes, lawyers will be ecstatic.
    Final point I will make is that agent’s system is relatively simple. We have a centralized database with easy access to information, while (as the above point elludes to) as it goes private we have a huge mess of websites and companies to navigate… What a freakin mess…

  12. John

    I would agree that most people are better off using a reputable agent – one that has been in the business for years. Most people are not strong at handling all of the infinite details involved in handling the sale of their home simply because their own emotions interfere with the equation.

  13. Oleg Tsaryov

    1.Your REALTOR® can help you determine your buying power 2.Your REALTOR® has many resources to assist you in your home search 3. Your REALTOR® can assist you in the selection process by providing objective information about each property 4.Your REALTOR® can help you negotiate 5.Your REALTOR® can help you in understanding different financing options and in identifying qualified lenders 6.Your REALTOR® markets your property to other real estate agents and the public 7.Your REALTOR® will know when, where and how to advertise your property.But if you’re still not convinced of the value of a REALTOR®, there are a dozen more reasons to use one.

  14. jason

    i would recommend http://www.RealVacancys.com if your trying to sell or rent out any kind of property. its free and they syndicate your listing to major real estate search engines. you can upload videos, floor plans and also add virtual tours. its worth a shot. ITS FREE

  15. Jenn

    Realtors have many resources available to them when selling your house and already have established customer bases. Using a realtor usually has your home much faster than doing it on your own.

  16. Jordy Brisbin

    Agents unfortunately for themselves have left the barn door open by offering nearly unrestricted access to listings on an MLS® service that we pay for. Some people feel they will not need an agent but there are many reasons to use and agent, other than just finding a property.

    I think if someone is going to do it all themselves, they can expect complications that can be expensive. If a person is going to try to sell without any MLS® at all, then they must be aware that their property will get very little exposure, and will either take longer to sell, and/or sell at a much lower price.

  17. Lee

    I think its up to the consumers to decide which model best fits into their everyday lives. I for one believe that the consumer should still use the services of a Realtor and its their responsibility to understand what services they need and how much money are they will to pay for those services.

    With the internet, their came a change in the way that businesses service the public. Also, with the internet, it has now allowed the public to learn and search for properties in their living rooms instead of going on tours and solely relying on a realtor. In fact, a lot of consumers are now saying to themselves, “Hey, this is easy and I’m doing the work myself. Why should I have to pay high commissions anyways?” And in my opinion, they are doing more work than previous so there is some merit to that response. But what can’t be discounted is that the Realtor is the professional, and if you’re lucky to find a really good one, then you will never stray to a different model. Because in most cases, you get what you pay for. Cliches are lessons the we all have learned repeatedly throughout our lives are usually true and very relevant.

    There are all sorts of options out there for the public to be resourceful. Trulia, Zillow, Zoocasa and Realtor.ca are only a few good examples. There’s a company called Sundaybell that empowers buyers and sellers to communicate with realtors anonymously which is a great tool for consumers. You get rid of the sales pressure, save time and money and choose the agent that’s best suited for you for free.

    So all the best to all of you, and I hope you find the best representative or business model that fully services your needs.

  18. Tim

    Great post Tom. And thank you Lee! I checked out that site Sundaybell you mentioned and it’s awesome. Tons of useful information in their classroom section and me and my wife have decided to interview agents using that service. Just goes to show how blogs can help educate you, thank you both!

    Tim

  19. Jackie

    Yes You can deal with a real estate agent .Of course he will charge you the fees for the agreement but it’;s really worth to pay .
    I sold my house in Vancouver with a great deal thorugh ” http://www.thevancouverrealestate.ca/“.and it was purely a fair deal

  20. Sissy Lappin

    You actually save more money selling without an agent than you might realize. It’s important for home sellers to understand that the 6% or 7% real estate commission is paid out of their equity – not out of the sale price.

    When you look at it that way, the commission is even higher than what we usually think. A 6% commission on a $250,000 sale price is $15,000. But if you only have $50,000 in equity in the home, than the commission is effectively 30% ($15,000 divided by $50,000). It makes a stronger case selling without an agent.

  21. Troy

    One thing that I feel quite sure of is that if more people are going to try to sell there own homes, lawyers will be ecstatic.

  22. Benjamin Roeshot

    What percentage of buyers use an estate agent in Canada?

    What percentage of sellers use an estate agent in Canada?

    Thank you

  23. Maggie Allen

    Unfortunately, I don’t think I am a very good negotiator, especially when it comes to houses. It sounds like I should probably stick to having a realtor sell my house for me. I don’t know a lot about the housing market anyways, so I’m sure I’ll save money and time by getting an agent to help me out. Plus, I won’t have to stress about the minute details of selling it!

  24. jane

    I have the same question:

    What percentage of buyers use an estate agent in Canada?

    What percentage of sellers use an estate agent in Canada?

    Thank you

  25. Glen

    The number one example of an oxymoron “Professional Realtor”.

  26. Rosie Beckett

    I just got a job offer in a different city and I need to sell my home pretty quickly, so I am trying to decide if I want to sell it myself or hire a real estate agent to help me. You make a great point that an agent will handle the negotiation and will be able to get me the best final price possible. This would not only save me time but would help me to avoid getting stressed knowing that they will handle all of the paperwork and negotiations with potential buyers.

Leave a reply

Your email address will not be published. Required fields are marked*