For Sale by Owner vs. Using an Representative
There’s a saying
"Just because you can do something doesn’t always mean you should"
Like a barber who wishes to cut his own hair or a great attorney who gets in some trouble & thinks he should represent himself.. The personal attachment for the lawyer clouds his judgment and prevents him from being objective. The barber can’t see all the angles he needs to in order to perform the cut he usually gets.
Below are some points to consider on both sides of the pros and cons equation:
- On a $800 000 house listing you could be saving 2.5% in the selling side but you still will have to pay 2.5% on the buying side.
It's important to note that buyers when they see Comfree , Purple bricks or Private, they automatically deduct in their mind the commission fees that would have provided so the seller doesn't really save. It just changes what the buyer is willing to offer. So for example if a seller has a property listed at $799 000 and the buyer was planning on offering say $799k, if they see private sale or Purple Brick/Comfree they end up offering $760k which is 2.5% less as they figure the seller is getting the same net price. Buyers are not foolish, they do the math and know what a seller is netting. Sellers believe they are saving 2.5% but what is actually happening is they lose 2.5% and don't receive the service..
- The agent(s) representing Purple bricks/ComFree etc.. are only making a small portion of the flat fee so you need to ask, do they have your best interests in mind or just wanting to make a quick sale? As they make more money with more turnover of listings instead of providing quality service.
- The Marketing they provide is very limited and cookie cutter approach. This works in a market like 2017 where things were just selling themselves but when the market tightens up and you need real marketing, focus and real attention to details of a deal. Those are all things Purple Brick/Comfree etc... can't really provide with their business model.
- Also most private sales don’t really understand what marketing a home really means or what’s involved. Putting it on MLS or a lawn sign is not really marketing.
- Agents and brokerages pay for insurance to protect the home owner against damages and theft, also no one gets to visit the home without an agent present which adds to safety and security. Each and every appointment is registered with the brokerage and everyone knows exactly who was in the home when. Open houses get registered as well. Makes it easier for follow up too as in the case of an offer date you can let all agents know in advance to put in an offer.
There are another 15 or so points to cover about this. Contact me to see the rest of these valuable points.