Friday, September 28, 2007

Selling Your Home - Part III

Thank you for visiting GoHsv.com and my Real Estate blog. If you have any questions or have a topic for a future blog, email me at mike@gohsv.com.

In our third installment of "Selling Your Home", I ask the question: Is using a Realtor worth it? That really is a loaded question. What it comes down to is the cost of using a Realtor vs. the time and work involved in doing everything on your own.

COMMISSION

The commission is the money a seller pays a Realtor to sell their home. It is not a set fee, normally it is neogotiable. In our area, it is usually 6% of the sales price. Some Realtors will lower the commision but when they do, make sure you ask them if they also limit some of the ways they advertise. Realtors have to pay for all their own advertising, so if they make less, they may not spend as much in adervertising as they normally would. Also, the commission is split between the sellers agent and the buyers agent. Usually it is a 50/50 split. So for a 6% commission, each Realtor would get 3%. But if the same Realtor represents both sides, he/she will get the full 6%.

So if your home sells for $200,000. I as your agent, for the seller, would get 3% of that or $6,000. But with that money, I have to split some of it with my company. Say I am on a 70/30 split so I get 70% of that original $6,000 which would be $4,200. Now with that, I need to take out my own taxes on it, so I would estimate and take out maybe 25% for taxes which would leave me with $3,150. Now I would take the $3,150 and then subtract the amount that I spent on advertising your home and then I would have the money I made selling your home.

Now I am not saying, "Oh those poor Realtors have to give up all their money." Because I know everyone has seen Realtors driving very high end cars and living in fancy homes, but that is just a select few, most of us aren't living like that. I just wanted to give you a little insight into commission and how it works.

TIME & WORK

Now in Part I, I discussed everything that is involved with selling your home. I will never discourage someone from trying to sell their home themselves. I offer any help I am able to provide, unless something I would do would make them my client, then I would have to tell them if I assist you any further, than the only way I can help you is to list your home with me. The only way I would advise against selling your home by yourself is if you really had to move immediately and did not already have someone lined up to purchase your home.

Most people who sell their homes FSBO (For Sale By Owner) typically give themselves 2 to 6 weeks to sell it, and if they don't, then they end up hiring a Realtor to assist them. It is alot harder to advertise FSBO, to get maximum exposure. Alot of buyers go to a Realtor to help them find a home, mostly because it is free for a buyer. If your home is a FSBO, the Realtor is not going to know about it unless they just happen to drive past your home. But if you are on a road that has alot of traffic or in a very sought after neighborhood that alot of people want to move into, then it might be worth your while to try it.

If you do decide to try it, this is where the TIME & WORK part comes into play. Moving is already a very stressful time, make sure you do have the time and patience to handle all the aspects of selling your home that I touched on in Part I. It isn't impossible by any means, just make sure you do your homework and know what you are getting into.

If you have any questions about selling your home, either with a Realtor or FSBO, do not hesitate to email me at mike@gohsv.com.