The average commission for a real estate agent is 6.25% of your home’s sale price.
For example, if your home sells for $250,000, you’ll need to pay your agent $15,625.
That’s a lot of money!
In fact, it’s more than double what most home sellers pay outside of the US.
According to an Economist article entitled The Great Realtor Rip-Off:
In Britain, if you want to sell your home, an estate agent will list the property, find a buyer, help you negotiate a deal and guide you through the transaction, all for a commission of 2-3% of the sale price. In America, realtors provide the same services for roughly double the fee. Are they worth it?
In recent years, however, more people have been selling their homes without realtors.
So if you’re considering listing your house as “For Sale By Owner” here are a few things that you need to know.
Speak to an Attorney Early and Often
Before you market your home, speak to a real estate attorney.
The lawyer will give you an overview of the process and make you aware of the legal paperwork you’ll need when you find a suitable buyer.
Typically the realtor’s office provides some of the legal paperwork at the beginning of the sale process.
If you choose not to hire a realtor, then your lawyer will need to prepare the documentation.
The lawyer may, therefore, charge you more for legal services.
The average real estate attorney in western Massachusetts charges about $600 to $700 for a closing.
If he also needs to play the role of realtor, he may add an extra $200 or $300 to his bill.
Be Familiar with the Required Forms
Realtors usually complete two legal forms before an attorney gets involved.
The first form is the Lead Paint Disclosure.
This form is simple to understand and complete.
The second form is the Offer to Purchase Real Estate. This form is slightly more complicated. But still simple enough to complete without a realtor.
Your attorney should be able to provide you with a standardized Offer form once you find a buyer.
Be Prepared to Negotiate
Some people hate to negotiate. But if you’re going to sell your home on your own, you need to be prepared to haggle over the purchase price and plenty of other details.
Your attorney probably will not help you with this.
His job is to draft and review legal documents, not argue over the home’s value.
Although, in my experience, deals between a buyer and a seller often go more smoothly and amicably when realtors or lawyers don’t get in between them.
Consider Paying a Realtor to Provide a Market Analysis or to List the Home on MLS
In today’s seller-friendly market, these steps shouldn’t be necessary.
However, if you’ve been trying to sell your house for several months and you’ve had no luck, it may be overpriced or poorly advertised.
A realtor can conduct a “market analysis” to provide you with a good sale price for your home based on comparable sales in your area.
Also, you can pay a realtor to publish your home on Massachusetts’ MLS.
“MLS” stands for multiple listing service. It’s essentially an online index that realtors use to find homes for their clients.
Both services cost about $500.
If you’re selling your home or if you have any questions about real estate law, please feel free to contact me at firstname.lastname@example.org.