How much should you Pay to List your Home?!
The Price of Listing your Home
HOW MUCH TO LIST??
So how much is the cost to listing a home?? As you do some research you may come to find that different brokerages will offer different percentage of sale costs to list your home. Many home sellers are confused as to why there can be such a variety of ranges when it comes to the broker fee to sell. I hope this article helps you make the right decision when choosing a price to list.
Always Remember!! There is no standard cost, and all homes have different needs when it comes to sell.
NOT ALL ARE MADE EQUAL
All homes are different in terms of neighborhood, quality of aging, size, land lot, newness, and so on. Each one carries it's own positives and negatives. So when it comes to sell, it is up to the owner to decide what his/her overall goal is. What price are they wanting to get, and how long do they have to sell? This is the game of marketing. What marketing is needed to accomplish your goals?
When "For sale by owner" might make sense. I get asked when going this route is the right decision. My opinion is that unless it is an easy exchange, maybe within family members, this is not the best option. People sometimes foolishly think that in a strong seller's market the "FSBO" route is best. Their thinking is that there are a ton of buyers and that if they stick the property on Zillow and pop a sign out front...all will fall in place. Well this is not the case. I speak with FSBO's all the time, and you can always tell when they feel that they have started something they weren't ready for. From endless calls (most worthless), to constantly speaking with Real Estate Agents that might have buyers and want more info on the home, to coming to the realization that they will have to pay for the Buyer's agent commission, if the FSBO wants to have a chance selling the home to a broader market. These are just some of the hurdles.
You'll find that most all FSBO's will be willing to pay the agent's commission on the buyer's side if the agent brings a buyer. When I ask, they tell me they will pay 3%. Well, like I pointed out above, not all homes and sellers are the same. Some FSBO's are selling at a good market rate, and sometimes unfortunately their selling under and don't even realize it. Well these type of FSBOs don't realize that with just an extra .5% more, they could list their home with me and I can give them what they have in place already, but I can also add a ton for this base minimum.
Listing with me for .5% more than the 3% they are already willing to pay will get them:
- Listed in the MLS!
- Some basic Social Media Coverage!
- Coldwell Banker's massive online reach!
- Great signage in front of the house!
- Lock Box (will record who entered the home and when for showings)
- Confidently knowing you are asking for fair market value on your home (You're not shorting yourself)
- A Realtor that handles all the incoming phone calls
- A resource that will give you where to go for any real estate related work
- A Realtor that will handle negotiations and most importantly, make sure that all the proper paperwork is completed and filed
- And a peace of mind that you are getting many times more value compared to what you originally were willing to pay for. All for 1/2 percent!
My experience has shown me that most serious sellers will not benefit from selling as a FSBO. Either there will not be success in selling, or the seller comes out on the short end. Up above is the minimum. Most FSBO's are looking for the minimum, but that's not the case for everyone.
The Right Price to List
So what's the right price? Well that is your choice and when sitting with a great Realtor, that Realtor should give you a choice. It's all about what it will take to sell your home.
I will give my clients my advice, and I always inform them that my advice is just that...advice. I give the best advice a can, but it's always their call. My opinion and advice is not always the only way. There will always be times that a client may decide to do it a different way, and some of those times it pans out beautifully. It's up to the risk tolerance of that particular client.
Let's look at the listing fee:
1% if a client believes they can sell the home at the minimum like I showed above.
2% if the client wants me to provide extra, maybe have me pay for pictures, measurements, and handle certain responsibilities that are extra and can be time consuming.
3% for all the above and really spending money on marketing. Postcards to the area, walking the neighborhood and meeting the neighbors (letting them know about the home sale), YouTube videos, video tours, strongly using the network of agents throughout the area, not only the acting brokerage, but agents in other brokerages too. Helping you get the home ready with clean up and fix up by recommending the people and companies that can do it right and quickly, and possibly much more depending on the home's situation.
Now the Buyer Agent Fee!
So we have to pay the Buyer agent 3% right?? NOPE! The fee paid to the Buyer agent is negotiable just like the fee to the listing agent. This means you could pay the buyer's agent 1% is you wanted! But...do you really want too?? Well, let's look at who we are attempting to attract when selling your home.
Not only are we trying to attract the buyers, but we are also attracting their agents! An agent should NEVER sell a home to a client based only on the commission they will make. I don't believe that will be the case, but let's look at this logically. The Buyer's agent only sees the commission set for their side in the MLS. It doesn't show the commission of the listing agent. This could many times lead the buyer's agent to believe that the listing agent is being greedy and unethical by keeping the heavy end of the total commission, or that somehow the listing is set to have the buyer's agent take the short end of the stick. This can leave negative feelings towards your listing and home, and when the time comes the agent most likely is not putting their best foot forward selling your home. Remember that when you list, there is a reason that you are also paying the Buyer's agent fee. Both agents are essesstially working to sell your home. If I list your home, I'm not the one selling the idea to purchase directly to the buyer. That is the job of the Buyer's agent.
So which home do you think the Buyer's agent will speak positively on and find all the postitives about owning that particular home? The home that is set at 3% or the home set at 1%? I'm be no means stating that the agent should be bias simply based on commision, but human nature will come through and that agent will naturally speak positive when feeling positive, and speak negatively when feeling that way. When showing homes that are comparable, this will naturally happen, he/she will hope that the buyer likes the higher commission home.
So what price is right for the Buyer's agent commission? It all depends on what you believe it will take to sell the home. It all boils down to strategy, and with a great Realtor you can find out what it will take to hit your goals at the lowest investment.
I hope this helps you to understand how you use commissions to sell your home, and how the cheapest fee is many times not the best for your particular needs. Please feel free to contact me if you have questions on listing your home. I'd love to help and talk to you about what I can offer when it comes to selling your home.