Are Real Estate Agents Worth the Money?
June 6, 2007
Would you pay someone $12,720 to sell your house for you? Based on the current estimated median home price of $212,300 and a 6% realtor fee, that’s what the bill would come out to.
How Much is Too Much?
We’re still living in our first home so I’ve never had to work with a real estate agent to sell a house but it makes me feel ill just thinking about giving up 6% of the highest valued piece of property we own. I know that realtors do provide valuable services to their clients but I haven’t decided whether it’s worth the money or not.
A local realtor sends out a periodic newsletter providing a market update for our area. Since we’re in the Mid-West housing prices are a little more reasonable than on the coasts; you pay less and get more space for your money. Her latest numbers for the last 12 months of activity in our area can be helpful to prospective buyers but are they worth over $12K?
- 21 Properties Have Sold
- Highest Sales Price was $330,000
- Average Sales Price was $265,281
- Average # of Days on the Market was 67
The way I see it realtors have three advantages over individuals with homes for sale by owner.
One of the most important things it seems is the ability to add homes into the Multiple Listing Service to advertise to a wide buyer base. They may also have relationships with appraisers, home inspectors, local officials, banks, lawyers, and other realtors that can streamline many steps in the listing and selling process.
Realtors make their living selling homes so they have time to show houses and return prospect’s phone calls. Many people selling their own home have full time jobs, which makes it more difficult to be available to work with potential buyers.
Due to their connections & years of experience, a real estate agent should have an information advantage over people selling their own property. They know where to look for the necessary pieces of information and can find out what they need to know more quickly. This knowledge should translate into a better selling strategy, which in turn should help you sell your home faster and for more money.
Are Realtors Worth the Money?
The advantages I just listed are definitely good arguments in favor of using a real estate agent when selling a house. However, I still find it hard to pay $12,720 to someone, even if they do add the value I just listed. That is such a large chunk of change, I can’t stand to pay that much money, it just goes against my miserly instincts. When we do sell our home, I’ll probably try and sell it myself and see how things go. Maybe I can pay a realtor for a few hours of their time to do some consulting in the areas I’m unfamiliar with. If it doesn’t work out I can always list it with an agent as a last resort. What are your thoughts, are real estate agents worth the money?
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