People frequently ask, "Do I need a realtor to sell my home?" or "What do realtors actually do besides charge too much?".
It’s important to note that real estate agents can be a valuable resource in the home buying and selling process. Some things they assist with include:
- determining the value of your home
- marketing it through the MLS and other channels
- coordinating showings
- helping with negotiation and contract management
However, with today’s technology, is that worth the typical 3% commission? Or the equivalent of $12,000 (not including Buyer's agent commission) to sell a $400,000 house?
In the old days, selling your home largely depended on the skill, connections and marketing efforts of your agent. Today, technology has radically changed the process. Now, according to the National Association of Realtors, over 90% of home buyers are looking online, rendering old-school methods – mailing postcards, printing flyers, and even hosting endless open houses – largely obsolete. There are agents who still use these methods, but most of them are leveraging these practices in order to find new clients– not to help you sell your home.
So are there other options? Yes.
- Option 1: For Sale By Owner. You could list For Sale By Owner (FSBO) and avoid using an agent altogether. By using this approach, many buyers will see your home on Zillow, but you’d miss out on all the buyers who are on other sites like Realtor.com and Homes.com, not to mention brokerage websites like KellerWilliams.com, ReMax.com, etc. In addition, you'll also miss out on traffic from popular search apps like Homesnap and Estately, which are fed via the MLS.
- Option 2: ~$500 MLS Only Listing. Alternatively, you could pay a bare-bones discount broker $300 - $700 (on average) up-front to put you in the MLS for 90 days, but you’ll forgo help determining your home’s value, coordinating showings, collecting feedback and valuable assistance with paperwork and negotiations (otherwise known as the "contract to close" process). Using one of these services gets your home on more websites beyond just Zillow, though other agents will see that it is a “limited listing” and may avoid or downplay your home out of resentment or even fear that they will have to do more work throughout the course of the transaction.
Can I get the value of an agent without paying 3% commission? Yes.
- Option 3: Tech - Enabled Broker. This new breed of real estate companies leverages technology and today’s consumer behaviors to offer critical and exposure without the old school mentality or cost structure. Many of the costs to sell a home are fixed or largely flat (Ex: the cost of professional photos or to input data into the MLS), so instead of charging twice as much to sell a $400,000 home as they would to sell a $200,000 home, many tech-enabled or online brokers offer a flat listing fee that saves customers thousands.
- Where can I find one? SimpleShowing is one example serving Florida and Georgia. For a flat $5,000 listing fee, they provide full service and support for sellers – everything you’d expect from a traditional agent without the hefty price tag. If your home is less than $350,000, you may be eligible for a discounted rate. Check out SimpleShowing.com for more information
- Can they help with buying a home? Can they help with buying a home? Some tech brokerages can help when you’re buying as well. SimpleShowing gives home buyers up to half of their commission back at closing: $6,000 on average. To find out more, visit SimpleShowing.com .
Bottom Line: Don’t use a brokerage with a commission structure from the 1980’s. Thanks to the internet and powerful new tools, consumers have access to more data than ever before – and are doing more of the work in the home buying/selling process. By embracing this shift, tech brokerages allow their agents to focus on what really matters and add the most value for each client – saving you thousands in the process.