Selling your own home

[Valeska Nemetz]

Just a quick question for those of you that own your own home or rental property... Would you consider selling it yourself without a real estate agent? What would be your biggest hesitation? What do you think you would need help with?

[Fleming Schutrumpf]

I am a broker and you're a broker too. So we're biased. But, I bought a house from a couple selling through a $600 flat fee broker (basically selling the house by themselves with less than minimal broker representation). Moreover, that couple had bought the house from a flipper, so it used to be nice, but they had run the house into the ground over 8 years (lots of dog damage, trashed baseboards, destroyed living room oak floor where the dog bowls were, ruined roof, unaddressed plumbing leaks, drywall damage, overgrown yard,...). Basically the classic cycle of someone who buys a new house because they are sick of what their old house turned into. I got a substantial discount at inspection because of numerous issues, and they also promised to fix certain items to be completed one week prior to closing, which they didn't, so that I negotiated another $6,500 in seller concessions for me to hire someone to do the work they had promised. 

I feel that with a better broker, I would have paid more (and been willing to pay more). This broker didn't advise them on how to neaten and maybe even partially "stage" the house. It was a hot market, and I was willing to buy a house where there was so much clutter that I couldn't see the floor in most rooms. If they had taken better care of the house and prepped it for the sale, it could have been worth $40,000 more.  That is the value of a good agent. Our value is in the negotiations, but that advantage is offset by the commission. However, the pre-sale prep, with prep connections (contractors, etc) that a good agent brings to the table are worth every cent of commission and then some. 

That should be the math: A good agent gets the seller double the sales commission in extra equity. 

And, a person must be willing to work with the agent and follow their advice. I helped a family member buy a house. But he wouldn't listen to my advice. So he passed on about $10,000 - $15,000 in inspection objections that were completely valid and would most likely have been acccepted by the seller. Because he was smarter than me, on his first home purchase, even though I've personally purchased more than 50 homes for myself, and am really good at what I do, and I really, really wanted to help him, but couldn't force him to accept my help.... That's the hard part for any of us in the helping professions, we can't make the diabetic eat less sugar, or the buyer or seller actually act in a way that maximizes their benefit. We have knowledge and advice and a license to help. But in the end, everyone makes their own decisions.

Here's one more story that illuminates the value of an agent. A friend of my dad's sold her longtime house in Boulder Co. She put it on the market, herself, no agent involved. She got a fair offer right away. But she thought her house was worth $15,000 more, so she countered and the deal fell through. The buyer moved on. No offers for 4 months. She had moved out of the house by then, into a cute condo. The vacant house had the basement flood. It cost $70,000 in repairs, only partially covered by insurance. 8 months later, the house finally sold for $40,000 less than that first offer.  Good agents know the first offer is often the best you'll get, and can help buyers and sellers put their options in perspective. This is important. It's not just a commission thing, it's being a dispassionate bystander with a lot of subject matter experience. 

I sell and buy my own houses, and I think, especially on the sell side for my own deals, I should hire someone else. Lawyers shouldn't represent themselves in court, and doctors shouldn't operate on themselves. Being dispassionate makes us so much smarter, than thinking about our own stuff. That's where our value comes in as agents. Our value is measured financially, and the stats are that agents are worth the money we make, Yet, there is more than the money, and living a year longer because of less stress also has some sort of price tag that I don't know how to quantify.