
Be Your Own Real Estate Broker
The housing market is hot. In fact, homes are in such high demand that many sellers are wondering if they even need to hire a real estate agent to broker the deal.
Financial adviser Ray Martin gave some tips on The Saturday Early Show for owners who want to sell a home themselves.
Home values are up, mortgage rates are low and properties in hot markets are selling in days. The only fly in the ointment for many sellers is the traditional six percent commission paid to real estate brokers who make the deal. As home values continue to skyrocket, the broker commission skyrockets as well. Meanwhile, it seems as though these brokers are doing nothing more than watching the home sell and then collecting a large commission. The thought of having to pay brokers $10,000 or more to sell a home that fetches a buyer in less than week is causing many sellers to stop and think: "Do I really need to spend that money?"
FSBO (For Sale By Owner) can be a good option for some people, Martin says. If your home is in a hot location, at a price that is affordable to many potential buyers, and similar homes are in short supply, this can be a good strategy. But, Martins says, FSBO is not for everyone.
The following are three potential pitfalls of being your own broker:
Despite these pitfalls, Martin says he is not trying to steer everyone away from selling their homes themselves. He says you need to be aware of the pitfalls and if you think you can tackle them, give it a try -- particularly if you're in a hot market. You can try FSBO for a set amount of time, and if you're not successful, you can turn to a broker.
If nothing else, use the knowledge that you could be your own broker to negotiate a commission with your broker. That storied six percent is a result of tradition, not law; nowhere does it say that you have to pay brokers six percent.
There are conflicting numbers on how many homeowners are selling their homes themselves. About 14 percent of sellers went solo in 2003, according to the National Association of Realtors. The Boston Globe newspaper reviewed sales in its area and found that closer to 25 percent of sales were FSBO.
There's no question that there are a lot of services targeted to sellers looking to go FSBO. If you are looking for an alternative to a traditional real estate agent, here are some popular options:
If the agent lists your home on the MLS, and another broker brings you a buyer, you will have to pay that broker their two or three percent commission.
Martin says the ultimate packages, which costs $500 or more, allow you to list your home on the MLS -- the same place real estate agents list houses. Again, there's a catch here: if a buyer is brought to your home by an agent who saw the listing on MLS, you do have to pay that broker's two or three percent commission.
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