My wife and I recently moved to Florida and because a new job required us to move rather rapidly, we didn’t have the luxury of waiting for our home to sell. Looking back on the experience and thousands of dollars I could have saved by not paying a real estate agent, my “hindsight is 20-20” question to myself is, did I waste a lot of money by using a realtor? We live in a world of social media and instant, widespread propagation of information so getting the word out to my hundreds of Facebook friends as well as Craigslist and other online resources wouldn’t have been too difficult.
After looking back, here’s what why I think a realtor was worth every penny.
Time is Money
As much as I am all about this do it yourself world, we all have a certain premium that people pay us for our time. For the sake of math, let’s say that each of us is worth $20 per hour. Too high for some and too low for others but it will make the math easy. A $130,000 home at 6% commission is $7,800 paid to the realtors involved in the sale which means you have 390 hours to put in to selling your home. That’s a lot of hours but a quick look on Trulia.com reveals that homes are staying on the market for three months on average and for many, quite a bit longer. Setting a monetary value on your time is less than a perfect science but it has to be factored in to your costs.
I was fortunate to have the #2 performing realtor in my state. Despite the numerous articles I read, her experience of what buyers look for was invaluable when I was deciding which improvements to pour money in to before selling.
She also asked me if my fireplace had been used in the past 10 years of owning my home. When I told her no, she told me to list it as a non-functioning fireplace. That would later come back to save me $2,300 when the buyers had estimates drawn up to make a never used chimney function again. I could have just said no to the repair but we aren’t living in a sellers market anymore. It could have taken another six months to get a serious offer.
In another instance, the buyers had received an opinion on what they perceived to be a crack that ran down the side of my home. My realtor had a masonary contractor examine the area. He found that it wasn’t a crack in the structure but instead an expansion joint. That was another $500 saved that I probably would have paid if my second opinion was somebody who wasn’t familiar with my subdivision and how homes were constructed at that time. My realtor had worked with this person for 15 years and knew that he had a lot of experience with my subdivision.
I could have listed my home on Craigslist or FSBO.com but she was putting it in the real estate section of the newspaper. Quickly glancing through the newspaper at pictures of homes for sale is still much faster than the internet and she knew that. Taking out a newspaper ad for even one week a month wasn’t cheap, I’m sure. She also knew how to do open houses and the volume of clients she has kept a steady flow of people viewing my home.
There was a point where the FHA lender was upset about how a shelf in the garage was listed on the contract. My realtor took care of all of that. All I had to do was read the contracts (and there were a lot) and sign where she told me to sign. If I sold it myself I would have had to pay somebody to prepare all of the documents for me. Based on a few online sources, that would have cost me about $1,500.
I read this article about how much money some people saved selling a home on their own but here’s how I look at it: For every month my home sat on the market, I was paying nearly $2,000 in expenses for that home. I don’t have time to learn how to sell real estate while I pay month after month of expenses. I don’t have the legal or marketing knowledge or the contacts with the other realtors to get this done.
According to that same article, those who use a realtor get a higher asking price for their home. I don’t know if that happened in my case but just looking at the few examples above, the money my realtor saved me made the money I paid to her next to nothing in the end! The 6% that I paid to the realtors seemed high until I added everything up.