The more things change, the more they stay the same.
This adage is true in most areas of life, including the seemingness timeless question: when it comes time to list my home for sale do I find the most well branded and experienced agent or find a low-commission agent or company to list and reduce my cost of sale? In either scenario, the common objective is netting the most profit, period.
So, how does one decide which is a better option?
We’ve outlined below a few things for a seller to consider when choosing how to list their home.
If you want to DIY the process…
Doing it yourself will have you essentially take on the second job of being a real estate agent during the sale of your property, from sourcing contractors all the way to negotiating the deal.
Essentially, you’ll need to know all the interworking components that maximize saleability, from successfully staging the property (which techniques will enhance all notable features that appeal to current buyers), preparing the property using specialized real estate photographers and videographers, and most importantly deciding on a pricing and marketing strategy based on the most recent sales activity in your specific building/neighbourhood to ensure you are generating the most buzz and appeal in the open market to maximize profitability.
Additionally, you’ll need to be available to book and confirm all showings at the property, be able to answer questions coming from agent’s at all times, and if any interest, fully understand the legalities of real estate contracts and be ready to successfully negotiate on a price that is in-line with market value. If the property has been marketed to the best of it’s abilities, you’ll have to be able to play multiple offers against each other – while not having any potential purchasers back out (or not even come to the table) to ensure the maximum sales price.
Once a contract is accepted, if there are conditions this period of time will need to be managed appropriately to ensure the new buyers are able to ‘firm up’ the deal and not have the property go back on the market which is visible on MLS and adds time/effort on the seller’s part as they start the listings process all over again.
Is it do-able – yes. Is it time-consuming, yes. Technology is advancing and there are new apps and companies coming out (seemingly daily) that support DIY Realtors. One thing to note, from an agent’s perspective the minute we see an owner listed property or property listed by a discount brokerage the immediate thought is ‘find a way to offer less than market value’ because our fiduciary duty is working in our buyer’s best interest – meaning; get them the best price.
Knowing the seller is paying less to sell and does not have representation by a professional that knows the market automatically means reducing the amount to be offered, especially if there is no competition. Dealing with an owner directly makes getting a better price easier (unless they are totally out of touch with the reality of market value and asking too much, in which case many agents won’t even waste time showing it to clients, and the property will sit on the market losing value day after day).
This is the thing, there isn’t necessarily anything actually wrong with the place. A property that is mis-represented could have been a hot commodity, listed and ‘sold in 6’ – common in Toronto. If it isn’t properly staged, marketed and priced it isn’t getting the best opportunity to sell for the most amount of money, in the shortest period of time.
If you want to use a Realtor and pay a discount commission…
A great thing about real estate is there are various ways one can choose to run their business. Some agents have chosen to take a lower commission on their efforts, in order to attract more clients and pass on the savings.
Finding a means to list your home for less can be very attractive to a seller, and – money in can affect money out; meaning, a reduction in the agent’s ‘budget’ generally means the service offerings will be reduced to ensure there is still profit from the transaction. Extra services such as online marketing and professional staging will likely be the first to get cut. Further, working with an agent whose best sales tactic is reducing their commission could translate into a lack of negotiation skills when it comes time to maximize the sales price of your home, never mind there may not be enough ‘value’ in the eyes of the buyer because of the property’s appearance, or enough ‘buzz’ to generate multiple offers.
There is nothing wrong with working with a discount agent, it’s simply important to keep in mind that it may affect the NET profit from your sale.
If you want full-service…
In today’s market, where many buyers begin their search online, first impressions are everything. Nothing makes a better impression than great photos. You get quality work when you have a great subject – namely, a property that is fully-staged, cleaned, well-photographed, priced-right and well-marketed.
Then there are the unseen aspects, the execution of open houses, how the agent interacts with buyer agents, how they ‘sell’ your home – it’s features and benefits, and generate more interest through their database and network. That extra percentage point for an agent may mean a few thousand at the end of the sale, but for you it could mean an extra 10, 20 or $30,000 on your sale. This is the value of a good, full-service agent.
An agent’s ‘soft’ value is experience and network; think of how companies hire consults and pay big-bucks to do so. An understanding of market dynamics, in-demand features and connections in the industry comes with experience and can be invaluable to the success of your transaction, never mind the time and money a seller would spend studying pricing, the legalities of contracts and learning how-to negotiate the deal to ensure the sale of likely one of their biggest assets isn’t mis-managed.
As a seller, you have the right to choose what works best for you. Researching all options is valuable, weather it be using a full-service agent, paying an agent a discounted commission, or listing the property yourself. The decision to sell your home can be a big one, and ensuring you make the best decision for your situation can go a long way in making the process as stress free as possible.
Where Do I go From Here?
You can look back at our other blog posts to learn about selling for the first time, or about the 5 selling strategies of real estate.
Feel free to reach out if you require further assistance with the selling process, we’re always happy to offer guidance as you navigate through the sale of your home!