Do you need a real estate agent to sell your home? Here are the pros and cons

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A skilled real estate agent can help you sell your home quicker and for more money than if you try to do it on your own — but the majority of agents charge a commission fee based on the home’s sale price, which can eat into your proceeds from the sale.

Do I need a real estate agent to sell my house?

Home sellers are not required by law to use a real estate agent, broker or Realtor (a member of the National Association of Realtors, or NAR). Depending on the situation, the services these professionals offer can, in fact, be accomplished by a savvy and resourceful seller.

If you lack the time, know-how or confidence to handle a for-sale-by-owner (FSBO) transaction, however, enlisting the services of an agent — a professional who knows the ins and outs of listing and selling homes successfully — pays off.

Pros

Eighty-nine percent of home sellers work with a real estate agent, according to NAR, and it’s easy to see why. NAR data shows that the typical home sold with the help of a real estate agent in 2020 went for $295,000, while homes without an agent on board went for $217,900.

“A good agent can help determine what your optimal list price should be,” explains Rick Sharga, executive vice president of marketing at RealtyTrac, headquartered in Irvine, California, “and also 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.”

Real estate agents also have access to the multiple listing service (MLS), a database that publicizes the listings in a given area to other real estate professionals and online portals like Zillow.

“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 Vanderstelt, a Northwest Indiana-based real estate broker and founder of the real estate website Quadwalls. “This gives you the best chance to get the offer you want.”

With an agent, you’ll have the guidance of an expert when negotiating, weighing and accepting offers, as well, says Rajeh Saadeh, an attorney based in Somerville, New Jersey.

“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 — and you’ll have someone committed to performing the vast majority of the work involved in marketing and selling your home,” Saadeh says.

Agents also excel at staging a home for sale — either as a pro themselves or via a connection to a professional stager — ensuring your home will look its best to attract more buyers. Keep in mind, though, that if you hire a professional stager, you’ll shell out some extra cash to make your place look more appealing.

Your agent will also host open houses and private showings, and can coordinate with all of the other vendors involved in the selling process, including the appraiser, home inspector, title agent and notary. Plus, he or she is available to answer your questions and address concerns promptly, and guide you through the reams of paperwork needed to sell your home.

Most importantly, your agent will serve as an objective bridge between you and a prospective buyer.

“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 finance and real estate at Longwood University in Farmville, Virginia.

Cons

The biggest potential drawback to working with a real estate agent is that in most cases, you’ll have to pay the agent a commission based on the sale price of your home. This often equates to 4 percent to 6 percent, but can be as low as 1 percent if working with a “discount” broker with fewer services.

“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 thousands.

Home price* Commission rate Commission fee
*Home prices based on National Association of Realtors regional statistics, April 2021
$259,300 4%-6% $10,372-$15,558
$289,600 4%-6% $11,584-$17,376
$381,100 4%-6% $15,244-$22,866
$501,200 4%-6% $20,048-$30,072

In addition to the commission costs, “you also have to sign a listing agreement with the agent,” cautions 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.”

That could be a problem if, for example, you start to dislike your agent or question his or her marketing, sales or negotiation tactics. Although agents have a fiduciary duty to protect your best interests, you could also receive 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 the agent can get quickly paid and move on,” Saadeh says.

Another downside? You could have less control over the process.

“Your agent may be aggressive about making the bulk of the decisions about your sales price, timing, marketing strategies, staging, negotiations and, in some cases, selection of third-party vendors,” says Sharga.

How to decide whether you need a real estate agent

If you’re weighing whether to sign on the dotted line with a real estate agent, consider these key questions to determine if you need their services:

  • Do you have a solid grasp of what your home is worth? A real estate agent will look at comps — similar 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 commanded on the market, you have a good starting point for selling your home without a real estate agent.
  • How much time do you have on your hands? Estimating your home’s value is fairly easy. Selling a house, however, can require a lot of work. Taking professional photos, advertising the property online and welcoming homebuyers for tours are just a few of the duties you’ll need to handle if you decide to do it yourself. If you have an open calendar and some strong marketing expertise, you might be able to put in the work that a real estate agent would do.
  • 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. You might receive an offer well below what you believe is fair. Without an agent as a buffer, you have to deal with the back and forth of telling a buyer that you won’t budge.

Alternatives to working with a real estate agent

Instead of listing your home with a real estate agent, you could list your home as a FSBO and sell the property yourself. In 2020, 8 percent of home sales happened via their owners, according to NAR.

“You can list your property for sale on publicly accessible mediums and online platforms centered around real estate purchases and sales,” Saadeh says. “You can also list your home for sale on more general forums, such as Craigslist, Facebook and even local newspapers and magazines.”

With the FSBO route, however, there’s the potential for your home to not make a splash on the market initially, either due to a lack of marketing prowess or an inappropriate pricing strategy, which can hurt your chances of selling fast and for maximum dollars. You might also encounter some logistical challenges, too. According to NAR, some of the most common hassles for FSBO sellers include trouble fixing up the home and difficulty understanding and preparing the paperwork.

“There’s some risk in trying and failing at an FSBO; agents and buyers often notice when a property has been offered by the owner and pulled back from the market,” notes Sharga. “That can sometimes lead to the home being more difficult to sell at full market value.”

You could go with a discount broker to save some money — “but most discount brokers will place your home on the MLS and not much more,” Vanderstelt says. “Some offer additional services a 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.”

A third option is to sell your home directly to an iBuyer like Offerpad, Opendoor or Zillow Offers. Here, Sharga explains, you simply complete an online form and the iBuyer will provide you with an instant cash offer for your home — but 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.”

HomeLight’s Simple Sale, for example — another online tool to connect with cash buyers — typically fetches between 90 percent and 95 percent of market value. So, while you’ll bypass the real estate agent and get an instant offer on your home, you’ll likely get a smaller chunk of money.

How home sellers can cut costs

If you’d prefer to work with a real estate agent, there are still opportunities for you to save. You can first try bargaining with your agent on the commission ahead of time.

“Many agents will negotiate commissions, possibly saving you 1 to 2 percent on the sale of your home,” says Sharga. “Other agents will reduce their commission if there’s not a buyer’s agent involved in the transaction.”

You can further reduce costs by not going overboard on home improvements before listing your property. 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.

“You can also try to expedite your closing, which may minimize the real estate taxes, homeowners insurance and mortgage interest charges that will accrue until closing,” Saadeh suggests.

Bottom line

The real estate agent’s commission can cut into the money you make on the sale of your home, but as is true of many things in life, you get what you pay for.

“During COVID-19, I thought hard about cutting my own hair — but I sure was happy when the barbershop opened up again,” says Vanderstelt. “Just because you can sell your home yourself doesn’t mean you should.”

Yet, it’s entirely possible for well-prepared sellers to successfully sell their home without the help of an agent.

“You need to honestly decide if you have the time available 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.

No matter what route you decide to take with selling your current property, you can choose to buy your next home without a real estate agent, as well.

Additional reporting by David McMillin

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