Do you need a real estate agent to sell a house?
Key takeaways
- While you're not legally required to use a real estate agent to sell your home, there are benefits to working with one.
- If you choose not to work with a listing agent, you avoid paying that commission — but you will still have to pay your buyer's agent.
- Selling on your own means doing all the work an agent would normally do, including pricing and marketing the home, coordinating showings and fielding offers.
A skilled real estate agent can help you sell your home, likely more quickly and for more money than if you tried to do it on your own. On the other hand, a majority of agents charge a commission based on the home’s purchase price, which eats into your proceeds from the sale. Let’s look into all the pros and cons of calling in a real estate professional to handle your home sale.
Do I need a Realtor to sell my house?
No. Home sellers are not required by law to use a real estate agent, broker or Realtor (a Realtor is simply an agent who is also a member of the National Association of Realtors, or NAR). Depending on the situation, the services these licensed professionals offer can, in fact, be accomplished by a savvy and resourceful seller.
That said, a “for sale by owner” (FSBO) transaction requires time, know-how and confidence. If you’re not sure you have all the skills required, enlisting the services of a professional who knows the ins and outs of listing and selling homes successfully can definitely pay off. According to NAR’s most recent Profile of Home Buyers and Sellers, 89 percent of home sellers do work with an agent.
Why it pays to work with an agent
Working with an agent brings a lot of benefits to home sellers:
Optimal pricing
“A good agent can help determine what your optimal list price should be,” says Rick Sharga of real estate market intelligence and advisory firm CJ Patrick Company. In addition, an agent can “advise on whether you’d be better off starting at the top of the market and having some room to negotiate down, or beginning at a lower price to entice more people to make offers and bid against each other to drive your price higher,” he says.
Knowledge of disclosures
Importantly, agents are also fully versed in all of the disclosures sellers need to make in a real estate transaction. These disclosures are required by law, which varies by state. For example, you might need to disclose the presence of lead paint, the existence of water damage or even if there was a recent death in the home. The nature, formality (written statement or not) and timing of the disclosures vary as well, with some states being more stringent than others. Part of the agent’s responsibility is to make sure you’re in compliance.
MLS access
Agents have access to your area’s multiple listing service (MLS), a database that compiles the listings in a given area for other real estate professionals. Popular sites like Zillow also compile listings from the MLS. “An agent can place your home in your regional multiple listing service, which will broadcast your home for sale to other websites with massive audiences,” says Chuck Vander Stelt, a Northwest Indiana–based agent and founder of the real estate website Quadwalls. “This gives you the best chance to get the offer you want.” Along with registering your listing on the MLS, an agent can help distinguish bona fide buyers from those who are “just looking” or not serious about making an offer.
Marketing and staging
When you use an agent, you’ll have someone committed to performing the vast majority of the work involved in marketing, staging and showing your home.“You’ll receive professional advice on what to include and what to leave out of your listing, as well as what kinds of pictures and videos to take,” says Rajeh Saadeh, a real estate attorney based in Bridgewater, New Jersey. Your agent might stage the home themselves or with a professional stager, which could help the home attract more buyers, as well as hosting open houses and private showings.
Drawbacks of working with an agent
The biggest drawback to working with a real estate agent is that, in most cases, you’ll have to pay them a commission based on the sale price of your home. This fee has traditionally been around 4 to 6 percent, but can be as low as 1 percent among discount brokers.
“Some agents offer discounted services,” says Sharga. “They’ll accept a lower commission, usually in exchange for the home seller taking on more of the agent’s responsibilities, like doing the staging and taking the photos.”
If you work with a real estate agent charging the typical rate, however, the commission can cost you tens of thousands.
Region | Median home price* | Commission rate | Commission fee |
---|---|---|---|
*Source: National Association of Realtors regional statistics, Dec. 2023 | |||
Northeast | $428,100 | 4% – 6% | $17,124 – $25,686 |
Midwest | $275,600 | 4% – 6% | $11,024 – $16,536 |
South | $352,100 | 4% – 6% | $14,084 – $21,126 |
West | $582,000 | 4% – 6% | $23,280 – $34,920 |
Other drawbacks
- Exclusive right to sell: In addition to the commission costs, “you also have to sign a listing agreement with the agent,” says Saadeh. “That means you’ll be forced to work with this person for a set time, indicated in the agreement, unless the agent agrees to let you out of the contract.” It also means you have to pay the agent a commission even if you sell the house on your own during that time period, unless you negotiate specific exceptions or sign a less-restrictive exclusive agency agreement.
- Less control: “Your agent may be aggressive about making the bulk of the decisions about your sale price, timing, marketing strategies, staging, negotiations and, in some cases, selection of third-party vendors,” says Sharga.
- Doubts and dislikes: You could begin to dislike your agent or question their marketing, sales or negotiation tactics. Although many agents have a fiduciary duty to protect your best interests, some might give poor advice or advice to the contrary. “For instance, the agent may secretly want you to sell your home quickly for a lower price than you may be entitled to so that [they] can get paid quickly and move on,” says Saadeh.
Alternatives to using an agent
For sale by owner (FSBO)
Instead of listing your home with a real estate agent, you could sell the property yourself. As of 2023, 7 percent of home sales were sold by their owners, according to NAR.
With the FSBO route, however, there’s the potential for your home to not make a splash on the market, either due to a lack of marketing prowess or an inappropriate pricing strategy. This can hurt your chances of selling fast and for maximum price.
“The success rates of finding a buyer using these platforms, as opposed to using a traditional real estate agent, largely depends on the marketing skills of the seller, their availability to respond to interested buyers and their flexibility to work with buyers who have real estate agents that expect commissions,” says Saadeh.
Sharga agrees: “There’s some risk in trying and failing at FSBO,” he says. “Agents and buyers often notice when a property has been offered by the owner and pulled back from the market. That can sometimes lead to the home being more difficult to sell at full market value.”
Discount brokers
Going with a discount broker to save some money is another option. “But most discount brokers will place your home on the MLS and not much more,” says Vander Stelt. “Some offer additional services à la carte–style, or based on an hourly rate. This gets your home in front of a large audience, but you are left on your own to manage everything else.”
iBuyers and cash-for-homes firms
A third option is to sell your home directly to an iBuyer, like Offerpad or Opendoor. These companies make a sale fast and easy — you simply complete an online form and they provide you with an instant cash offer for your home — but they come with a caveat.
“The benefits are speed and certainty: There’s no need to go through the hassle of staging, listing and hosting open houses,” says Sharga. “However, iBuyer offers are always below full market value, since they need to buy, repair and resell the home at a profit. So you won’t get top dollar for your home.”
You could also work with a cash-homebuying company. These businesses — some are local, some are part of national chains — also specialize in purchasing homes quickly, with all-cash deals. However, like iBuyers, homebuying companies won’t offer top dollar. You might have a little more bargaining power, since you’re dealing with them in person and not just online, but basically, these are take-it-or-leave-it offers.
How to decide which is right for you
Debating whether to hire a real estate agent or go it alone? Consider these key questions:
- Do you have a solid grasp of what your home is worth? A real estate agent will look at comps — similar recently sold properties in your neighborhood — to get a sense of an appropriate list price. However, there’s nothing stopping you from doing the same. If you have an understanding of what other places like yours have sold for, you might have a good starting point for selling your home without an agent.
- How much time do you have on your hands? Selling a house requires a lot of effort. Taking professional-quality photos, advertising the property online and screening and welcoming homebuyers for tours are just a few of the many duties you’ll need to handle when you do it yourself. If you have an open calendar and some marketing expertise, you might have a leg up.
- How comfortable are you with uncomfortable conversations? A home is a very valuable asset, and you might be proud of the work you’ve put into it. Remember, though, that a buyer wants to score a good deal, and they probably have an agent in their corner advising them. Without your own agent as a buffer, you’ll have to deal with the back and forth, and if you’re not a skilled negotiator, you could lose out. You might also let sentimental attachment cloud your judgement. “Real estate is often a very emotional transaction, but a good agent doesn’t let emotion get in the way of making a good deal,” says Bennie Waller, professor of real estate at the University of Alabama.
How home sellers can cut costs
If you’d prefer to work with a real estate agent but are hoping to limit costs, there are still opportunities for you to save:
- Negotiate your agent’s commission: Try bargaining with your agent on the commission ahead of time. “Many agents will negotiate commissions,” says Sharga. “Other agents will reduce their commission if there’s not a buyer’s agent involved in the transaction.”
- Don’t go overboard on home improvements: If you’re not careful, it’s easy to spend too much on snazzy staging or expensive upgrades that don’t offer a sizable enough resale return on your investment. Talk to your agent or an appraiser to learn which improvements, if any, might actually yield solid returns.
- Close ASAP: Sellers may save on closing costs if they move quickly. “Try to expedite your closing, which may minimize the real estate taxes, homeowners insurance and mortgage interest charges that will accrue until closing,” says Saadeh.
Bottom line
A real estate agent’s commission fee can cut into the money you make on the sale of your home, and it’s entirely possible for well-prepared sellers to successfully sell their home without the help of an agent. Still, you get what you pay for. “During [the height of] COVID-19, I thought hard about cutting my own hair — but I sure was happy when the barbershop opened up again,” says Vander Stelt. “Just because you can sell your home yourself doesn’t mean you should.”
“You need to honestly decide if you have the time and the knowledge necessary to accurately price, expertly stage and market your property, as well as effectively negotiate with buyers and their agents,” says Sharga.
Ultimately, Saadeh says, “it is understandable that sellers want to avoid paying a commission. But a good agent is supposed to increase the sale price to make up for the commission, so that the seller nets more money from the sale with an agent than if they tried to sell without one.”
Additional reporting by David McMillin
You may also like
Should I take an all-cash offer on my house?
Documents needed to sell a house
How to sell a house by owner in South Carolina
Do I need a Realtor to buy a house?