A risky new trend of commission free listings
I’m seeing it more and more nowadays: DIY everything – even real estate! Every time I do, I shake my head. Seriously, DI-Why? Commission free listings, or ‘for sale by owner’, is a risky recent trend.
There is a time and place for rolling up your sleeves and getting it done yourself, but selling your home is not it.
DIY isn’t always best
Think about it: your home is the single most valuable asset in your possession.
Are you going to put it at risk by listing it yourself? Saving a little extra cash might seem tempting, but don’t fall into that trap. Listing your home on your own will cost you more in the long run than if you used a professional to start with.
I’ve seen it firsthand. I listed a gorgeous home in my neighbourhood earlier this year, while another home was being listed by the owners not too far away. Having talked with them, it was clear they were severely underpricing their house.
So, how’d they get the number? They looked around their neighbourhood and chose something in the middle. The result? Losing out on thousands that their home was worth. Not only that, they accepted the very first offer in a booming market because they weren’t equipped to handle a multiple-offer scenario.
Why a realtor is your smartest choice
It always breaks my heart a little to see well-intentioned home owners listing their home themselves. I’ve seen homes listed for well under what they’re actually worth and I know it could have been prevented with professional guidance.
There are so many variables to consider and looking around at your neighbours’ exteriors will not tell you the actual value of your house. Using this as your basis almost guarantees you’ll be losing out on thousands – thousands that could have gone towards retirement, tuition fees etc. Realtors have years of experience, knowledge, and training to help us accurately appraise your property.
Think of the opposite scenario: overpricing your home. Maybe it works out, but most likely buyers keep walking and your home sits on the market for months (we’ve all seen those houses that are forever ‘for sale’). How much are you losing when you have a home sitting on the market for longer than you expected? What if you buy your next home based on an incorrect assessment of what you think your current home is worth?
Be honest with yourself
Then there’s the actual work involved. There’s a reason this is our full-time job; it’s not a side-hustle kind of thing. There’s the listing process, the paperwork, the revisions, the negotiations, the inspections, the open houses; do you have time to take care of all that and do you even know how?
Don’t forget that listing property without a real estate professional puts a huge amount of liability on your shoulders. Your real estate agent is your legal representation as well. Do you know all the legal codes and regulations involved in home sales? Lawyers aren’t cheap, so legal fees add up quick if you don’t know how to represent yourself properly.
Using a realtor ensures that all the paperwork is done legally and ethically, which prevents any legal liabilities down the road. You don’t want to find yourself paying for a one-word mistake on your home sale.
Commission free misconceptions
The entire selling point of commission free listings is selling your home without paying commissions. What you may not realize is that you’re only avoiding half of those commissions.
Typically, a home sale involves two agents, the listing agent and the buyer’s agent, with the buyer’s agent usually getting a 2.5% commission. That’s right, the agent who brings in the buyer needs their commission, too.
While paying half the regular commission is admittedly cheaper, losing out on all the advantages that come with a listing agent will likely result in you paying more than that commission would’ve cost in the first place.
Your most valuable asset deserves professional care
Ask yourself: is that little bit of DIY worth the serious risk you are putting on your budget and home? You get what you pay for and the negatives far outweigh the positives.
Think of it this way: if you were seriously sick, you wouldn’t risk your health dealing with it yourself, would you? Of course, not! You’d want the best doctor available to treat you. Your home is just as important as your health, so why wouldn’t you trust it to the best professional at your disposal?
Sure, maybe you’ll be the lucky one in a million who pulls off the poster story for DIY listings, or maybe you’re a smart individual who knows there are professionals out there for a reason!
Seriously, DI-Why? There is a time and place for rolling up your sleeves and getting it done yourself, but selling your home, your single greatest asset, is not it.