While it's true that most people buying or selling hire real estate agents to represent them, you can also take a do-it-yourself approach. "For sale by owner" transactions can save you money and give you more control over the process. Furthermore, with some of the tools available today to help you, such as the ability to pay to list on the MLS, or the ability to see MLS listings without the help of an agent, you can come close to matching what a real estate agent can do for you.
Doing your own real estate transactions can save money. If you sell your own property to a buyer who's not represented by an agent, you avoid paying a 6 percent commission. On a $300,000 house, that's $18,000 that you get to keep. If a real estate agent brings you a buyer, you're likely expected to pay a 3 percent fee, but that still saves you $9,000 on a $300,000 home. If you're the buyer, you can often negotiate a slightly lower price, knowing that the seller is saving a commission. When you're selling property yourself,, you may incur some out-of-pocket costs. You might pay to list the property on the MLS, print flyers or place a yard sign. You may need to buy blank documents. Any costs, however, are usually less than what you'd pay an agent.
Avoiding Agency Issues
When you represent yourself, you don't have to worry about trusting a third party. You also don't have to get locked into working with someone that you don't like, working with someone who doesn't do what she says, or being steered toward certain homes. If you're in an agency relationship, you're often stuck. It could be hard to replace your agent if you change your mind or if he fails to perform to expectations. Finally, when you're on your own you don't have to worry about whether your agent will return your calls.
Strategic and Pricing Control
When you represent yourself in the sale of property, you decide how the transaction will work. You can price your property however you want, although pricing it outside of the market could lead to it selling below market value -- or not selling at all. When you're in charge, you also decide how to run the marketing, for example, when to show the home or hold your open houses. Although being your own agent can be time-consuming, at least you get to choose which time it consumes. As a buyer, you also get to control the transaction. You negotiate directly with the buyer instead of through a third party. You choose your own professionals, such as inspectors, and you get to schedule inspections and meetings at times that are convenient for you.
Getting the Best of Both Worlds
Agents do bring three things to the table that are helpful: pre-written real estate transaction forms, lists of qualified professionals, and access to the Multiple Listing Service, which is where many real estate agents go to look for inventory. If you're representing yourself, however, certain companies will provide you with many of these services for a flat fee, which is still significantly less than paying for the commission.
Steve Lander has been a writer since 1996, with experience in the fields of financial services, real estate and technology. His work has appeared in trade publications such as the "Minnesota Real Estate Journal" and "Minnesota Multi-Housing Association Advocate." Lander holds a Bachelor of Arts in political science from Columbia University.