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Do you need a real estate agent to sell your home?

A real estate agent gives a tour of a home
Monkey Business Images/Shutterstock
A real estate agent gives a tour of a home
Monkey Business Images/Shutterstock

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A skilled real estate agent can help you sell your home more quickly, 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. You might not need one, technically, but there are plenty of pros and cons to consider — especially in today’s hyper-competitive housing market.

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.

That said, a for-sale-by-owner (FSBO) transaction requires time, know-how and confidence. If you’re not sure that you have all three, enlisting the services of an agent — a professional who knows the ins and outs of listing and selling homes successfully — pays off. Let’s look at some of the main factors to consider.

Why it pays to work with an agent

According to NAR’s most recent Profile of Home Buyers and Sellers, 90 percent of sellers worked with an agent, and it’s easy to see why. NAR data shows that the typical home sold with the help of a real estate agent in 2021 went for $318,000, while homes without an agent on board went for $260,000.

“A good agent can help determine what your optimal list price should be,” says Rick Sharga, executive vice president of market intelligence for ATTOM Data Solutions, a real estate data company based in Irvine, California. In addition, agents 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,” Shrga says.

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.

Agents have access to the multiple listing service (MLS), too, a database that compiles the listings in a given area for other real estate professionals, as well as for online portals like Zillow. Along with promoting your listing through the MLS, an agent can help distinguish bona fide buyers from those who are “just looking” or not serious about making an offer.

“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.”

With an agent, you’ll also have the guidance of an expert when negotiating, weighing and accepting offers, says Rajeh Saadeh, an attorney based in Bridgewater, 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 themselves or with 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 appraisers, home inspectors, title agents and notaries. 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.

“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.

Agent drawbacks

The biggest potential drawback to working with a real estate agent is that in most cases, you’ll have to pay him or her 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 prices based on National Association of Realtors regional statistics, May 2022
Northeast $409,700 4% – 6% $16,388 – $24,582
Midwest $294,500 4% – 6% $11,780 – $17,670
South $375,000 4% – 6% $15,000 – $22,500
West $633,800 4% – 6% $25,352 – $38,028

Additional cons of working with an agent

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.”

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 [they] can get paid quickly and move on,” Saadeh says.

Another downside? If they take control of the process, you have less control over it. “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.

Decide which is right for you

Every situation is different, and you might still find yourself wondering, “Do I need an agent to sell my house?” 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 an agent.
  • How much time do you have on your hands? Selling a house requires a lot of work. 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 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 using an 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 2021, 7 percent of home sales were sold by 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. “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.”

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 dollars. You might also encounter some logistical challenges: 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 FSBO,” says Sharga. “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.” You might even have a hard time getting an agent on board later if you decide to switch up your strategy.

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.”

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 the iBuyer will 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.”

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, 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.”
  • 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 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,” Saadeh suggests.

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. But as is true of many things in life, 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. This includes knowing the disclosures your state requires — an area you likely won’t be an expert in unless you’re a very experienced seller.

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.”

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

Additional reporting by David McMillin

Written by
Erik J. Martin
Contributing writer
Erik J. Martin is a Chicago area-based freelance writer/editor whose articles have been featured in AARP The Magazine, Reader's Digest, The Costco Connection, The Motley Fool and other publications. He often writes on topics related to real estate, business, technology, health care, insurance and entertainment.
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