|
REAL
ESTATE IN A NUTSHELL
PART 2
- DO
YOU NEED THAT REALTOR?
What was
Part 1 about?
You can
read it here or just see
the very short version below:
If you want
to buy/sell a house (condo, land, etc), learn about the
market first, and at the same time look for a Realtor whom
YOU, not somebody else, feel good about.
Actually,
do you really need a Realtor? You have access to all kinds
of info online; you’ve lived in this town for 15 years, went
to 27 open houses in the last 3 months, you are a tough
negotiator, so why not sell your house yourself and save the
commission. Right?
Sure,
what a wonderful idea! It’s kind of strange why everybody
else isn’t doing the same. Think about this – millions and
millions of people around the world have been paying
billions of dollars in Realtors’ commissions in the last 100
years or so. More than that, Realtors themselves, knowing
this game in and out, are selling their own houses… through
the MLS (multiple listing system), not privately.
I’m a
frugal (to say the least!) guy myself. When the batteries
die in my camera, I put them in other devices, before they
are fully empty and only after that reluctantly throw them
away… But after years of being a Realtor I never sell my
houses privately, and always pay the full, not reduced
commission to another Realtor who brings me a buyer.
Why? For
a very simple reason – this way I, like other home sellers,
usually end up with more money than selling privately, not
to mention other benefits.
Let’s
imagine you have to sell your 20 year old “Mustang” (which
is, of course, “better than new!”). If you talked to just
your 10 neighbors, 8 of them wouldn’t be interested at all
and the other 2 might consider it for “not more than $1,500…
sometime next spring”.
If the
whole town knew about this beauty, you might end up with
about $3,000. Expand the area of search to the entire world
and some nostalgic guy from California might offer you
$5,000 for this particular model, color, etc.
So, would
you pay someone 3-4% commission from this $5,000?
Someone,
who will make sure the entire world knows about your
Mustang, take really nice pictures of it, put an ad in the
papers and devote websites to it, bring you pre-selected
buyers, arrange countless test drives, mechanical
inspections, take care of all the paperwork, safe money
transaction, etc, AND AT THE END WILL BE RESPONSIBLE IF
SOMETHING GOES WRONG .
Or would
you prefer to stay happy with the whole $1,500, without
paying anyone else?
Of
course, it’s just an example, but one which is very close to
reality. The more people know about your house, the more
money you will get for it and there is no way you can get
better exposure yourself (even using all the self
proclaimed websites nobody knows about. Really, how many
of them can you name?)
You will
spend a lot of money and effort going through annoying
“bargain seekers”, risk going to court if something goes
wrong after the sale … only to hear at the end: “Sure, your
house is worth $..., but I’m offering you less, because you
are selling privately and don’t have to pay a Realtor.”
So you
did all this work and took all the risks… for nothing?
Exactly!
That’s why the vast majority of houses are sold through
Realtors and almost all “for sale by owners” eventually end
up being sold by Realtors too.
P.S. Of
course, I’ve heard your Aunt Betty’s success story. She sold
her house herself (!), in just one day (!!), for full price
(!!!) to the very first people (and very nice ones!) who
walked through her door. So she is very happy and rightfully
so – she got the whole “$1,500” all to herself, without
paying anyone else!
Please,
don’t tell her anything from the above.
|
