Oregon Mortgages

The Risky Side of Selling a Home on Your Own

I suscribe to a couple of Real Estate News Letters as well as a couple different Mortgage News Letters but I thought I’d post this. When it comes to someone selling their home I have no vested interest so sometimes hearing something that is true about selling coming from an outside party can help. You really should use an agent when selling your home and this gives you an idea as to why.

“The vast majority of sellers list their home with a real estate agent, but some individuals choose to go through the selling process on their own. Selling a home “For Sale By Owner”, while entirely possible, does come with a list of hurdles and some significant risks.
Un-represented sellers are motivated to save the cost of the agent’s commission. In many cases, however, selling without assistance can result in a lower closing price that negates such gains. In a survey of more than 7,800 buyers and sellers from around the country, the 2005 National Association of Realtors® Profile of Home Buyers and Sellers showed that the median price for homes sold directly by the owner was 16 percent lower than homes sold with the assistance of a real estate professional. “

So if you are trying to sell your home on your own you are typically going to sell the home for a lower value. So yes, you didn’t have to pay an agent but you also lost money which negated that anyways. Plus you had to do all of the work on your own.

Let’s put together a quick scenario based on that information. Suppose you sell your home for $200,000 and you didn’t use an agent. Great! you didn’t have to pay them commission but you also just sold it (on average) for 16% less than they could have. 16% of 200k is $32,000. That agent you wanted to stay away from could have sold it for $232,000. Not too shabby but you probably paid 6% in commission. 6% of $232k equals $13,920 but even with paying that you still netted a little over $208,000 which is still $8,000 more than when you did it on your own.

Just some information I found interesting and thought the public might as well.