Options for Selling a Home - Confusing?

    Options for Selling a Home - Confusing?

    Jan 17, 2020

    Which is the better way to sell your home – internet real estate companies or traditional agents? 

    That’s a good question, and the answer depends on you.  Let’s walk through each version and see which may be best.  

         First, the new kid on the block – Homie:   Homie offers to eliminate commissions paid during real estate transactions.  Instead, you pay a fee upfront (whether your home sells or not), then another fee if it sells.  It’s a newer concept and is only available in two states as of this writing. 

         At the time of this article, Homie agents are salaried rather than on commission.  Does this remove the motivation for agents to sell your home quickly and at the highest price?  When reviewing any new service, I always read the lowest rated reviews first, then the highest rated.  After I did this, two idioms came to mind: caveat emptor and “you get what you pay for”.   But, do the research and make up your own mind.

         Opendoor – When selling your home, you actually sell it to Opendoor.  With Opendoor, you never need to hold an open house or have potential sellers touring your home.  Great, right?   And, if your home requires repairs, Opendoor will take out the costs at closing.  This ensures you don’t need to pay for repairs up front.  Sounds like a good way to go.

         I’ve contacted sellers and was told that Opendoor’s offer price was 12 percent below the comparable properties in their area.  When compared to traditional real estate agents, this represents double the average commission costs.  Example:  on a $300,000 home, 12 percent represents $36,000 below the selling price.  Conversely, if you paid both sides of the real estate agents’ commissions, you would only pay $18,000 – half of the $36K.  You can pay for the convenience of not showing your home, but it seems a bit high.   

          Traditional Sales:  A traditional agent relationship is built on a commission for services, but is based on loyalty, honesty, obedience, and a fiduciary duty to clients.  Agents aren’t paid until they sell your home. The traditional brokerage usually receives 3% for the selling agent and the buying agent also receives 3%, but commissions are always negotiable.   Discount brokers may offer lower commission rates, but this may mean fewer services. 

         The higher the price for your home, the more money made by the client and agent.  But, pricing a home too highly may mean it doesn’t sell.  Real Estate professionals are trained to find the right price.  The incentive for the traditional agents to market, show, and complete sales correctly and quickly is built into the agency relationship.  “Agency” means they owe fiduciary interests only to their client.  Real estate agents work hard for clients during the real estate transaction.     

         What if you need repairs?  Like Opendoor, Coldwell Banker has a program (Realvitalize) that allows sellers to not pay for repairs until closing. 

    So, of the three models, which do you prefer?  Ultimately, you must make the choice that is best for your situation.   

    Posted by Tom at www.GlendaleAZRealty.com