You have options when it comes to selling your home

Real estate is no longer a "one size fits all" industry when it comes to how you sell your home.  You can use a traditional agent, a flat fee agent, a flat fee MLS program, an attorney, or an iBuyer.   But how do you know which one to choose?

At Selling Later, we believe that how you sell your home should be based on how much you know, how much time you have, and how much effort you want to put into your sale.  

To help get you started, here is our opinion on the pro's and con's of using the following services: Real Estate Agent, Flat Fee Agent, Attorney, Flat Fee MLS, iBuyer.  

Traditional Real Estate Agent 

This could be a good option if you want to list on the market but don't know what you are doing, don't want to do most of the work, nor deal directly with buyers.   Agent commission is paid at closing and will be a more expensive option in regards to your loss of home equity.  

What services does a good real estate agent provide?

• An agent will give you advice on how to prepare your home to sell, give you a competitive market analysis (CMA), and a strategy on how they will sell your home.  Once your home is listed, they place the home on the MLS, market the home, manage all showing appointments, and review all offers with the seller to ensure they negotiate a great deal in their client's favor.  A good agent will keep close tabs on all important dates of the contract, inspection deadlines, loan commitments, and negotiate buyer's requests for inspection repairs.  They will attend the closing with or for the sellers after reviewing the final closing documents with them.

Is there anything that is not covered under an agent's service?

• There is not a lot that a good agent will not do as this service offers the least amount of work for the home seller.

Are traditional agents available throughout the United States?

• There are almost two million real estate agents located within all 50 states.

What are the costs associated with using an agent?

• Using an agent is one of the more costly ways to sell your home.  There is not a legally mandated commission rate for this service, however, most agents will tell you that standard commissions rates are between 5% and 6% of the selling price.  This is then split between the buying and selling agent (read more).  You need to know that commission is always a negotiable fee that is agreed upon by the seller and the agent.   The length of your contract with a listing agent is also negotiable.  There are things you can do to help give yourself negotiating power (read more).

What makes a real estate agent differ from other real estate services?

• An agent has a lot of hands-on involvement. Agents are there through every step to ensure they help the seller sell their home for the best price possible, in the least amount of time and with the least exposure of risk.

What securities come with using an agent?

• Agents, specifically Realtors, are supposed to adhere to strict guidelines and code of ethics to ensure a proper and safe sale.  An experienced, well-educated agent is that they are trained in the "what if's" and can navigate a seller through those potential pitfalls.

What is the homeowner's role when using a traditional agent?

• The homeowner must review the CMA with the agent to agree on a sale price, prepare their home for sale, work with their agent to schedule home tours, review offers, selects the best offer, and completes paperwork with their agent to close the deal.

What they don't tell you about this selling service

• There are 1.4 million Realtors in the US to sell around 5 million homes.  Some are great, some are ok, and some are pretty bad at their job.  Be sure to interview multiple listing agents before hiring one.
• There are a lot of websites that claim to help you "find the best agent for free" or tell you "the best way to sell your home."  However, most of these sites only connect you to agents who are willing to give the referring website 25% to 35% of the commission they earn from your sale.  This can seriously impact your opportunity to negotiate commissions with your listing agent.  While you can use these sites to research agents, do not contact agents through these websites.  Instead, contact the agent directly through their own websites or social media accounts.     
• Look for open marketplace platforms, like Homeopenly, that show agents and their lowest commission rates, without companies taking referral fees or pay to play programs.
• The best agents rely on word of mouth and client referrals and do not participate in referral and "pay to play" programs.   
• If your agent has a lot of listings in your area, know that they probably work with a team.   Ask to meet with their team before signing an agreement with them, as you will most likely end up working with the team members more than the agent.  

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Real Estate Attorney For FSBO

This could be a good option if you are selling on your own (FSBO) and understand the selling process.    Using an attorney can save a lot of your equity, ensure you follow state regulations and protect your liability as the homeowner.  

What general services does a Real Estate Attorney provide for a client?

• A real estate attorney can review and draft legal documents including purchase and sale agreements, leases, deeds, title commitments, settlement statements, and financing agreements. Additionally, they can assist in resolving title insurance and environmental issues and also may play a vital role during negotiations.

What services do they not provide?

• An attorney will not give you a suggested sale price, suggest how to prepare your home for sale, show the home, or list the home for sale.  

Is this service available throughout the United States?

• Real estate attorneys are available in every state.  Some states actually require you to use an attorney for real estate transactions.

What are the costs/fees associated with using a real estate attorney?

• The costs for a real estate attorney vary depending on the attorney's individual experience level along with other factors, including location. Most attorneys charge on an hourly basis; however, some attorneys will charge a flat fee for a particular service (i.e., for reviewing a draft sales agreement).

What makes a real estate attorney different from other real estate services?

• An experienced real estate attorney can help protect the clients’ best interests and ensure that the transaction adheres to all state and municipal laws.  It is not likely that an attorney will charge a commission which eliminates any personal motivation.  That means the attorney can focus solely on what is best for his or her client. 

What securities come with using a real estate attorney service?

• Using a real estate attorney ensures that your legal documents are prepared correctly and adhere to all the state laws.  An attorney will be able to address any issues that might affect the property in the future. Additionally, a skilled real estate attorney can help to protect the client from being sued by the opposing party, assure that the real estate being purchased includes all aspects of property rights (ex. oil and gas rights) and assure that there are no title issues (i.e. unsatisfied judgment or tax issue that is liened against the property).

What is the home owner’s role when using an attorney?

• The homeowner’s role is to prepare their home for sale, set the listing price, market the home, find the buyer, and agree to a sale price.  

What they don't tell you about this selling service

• Some states require you use an attorney at closing, even when using an agent.
• While attorneys may give you a flat price for their standard service, you should know their hourly rate to budget accordingly if your sale does not go smoothly.
• Some attorneys will ask you to put down a retainer (a certain amount paid in advance) to cover their services.   You should require that your attorney warns you when you are close to spending all of your retainer so that you are not surprised with extra hourly charges after the sale is complete. 
• Just like traditional agents, there are a lot of real estate attorneys out there, so check their reviews and ask for recommendations from other attorneys, investors, friends, and family.  

1% Commission or Low Fee Real Estate Agent 

This could be a good option for you if you want to list your home on the market, but don't have a lot of experience or knowledge of the selling process.  Using this type of service will help you retain more of your home's equity due to paying a lower commission.   

What general services does a 1% Commission or Low Fee Agent provide for a client?

• A low fee agent provides similar services as a traditional realtor.  However, detailed services offered may vary based on which company that you select.   When using a flat fee service, be sure to use one that employs their own real estate agents in your specific area.  

What services do they not provide?

• Some low fee platforms cover all services, while others ask that you manage the preparation to list the home and manage the home showings.

Is this service available throughout the United States?

• True low fee services, those that have specific agents working for them, are available in most major cities.    

What are the costs/fees associated with using a low fee agent?

• The costs for a flat fee realtor will vary based on your service provider and your state.   Most will offer a 1% commission for the listing agents, while others tier their pricing based on the price of your home.  Almost every single flat fee service will have you include 3% to a buyers agent.   This means that even though they advertise 1% commission, you will end up paying 4%.  

What makes a low fee agent different from other real estate services?

• Most low fee agents have very similar processes and actions as regular traditional agents but typically utilize more technology to help the homeowner manage more of the process.  Flat fee agents that work solely for a flat fee agency typically work on a salary instead of a commission-based position.

What securities come with using a low fee agent service?

• A good low fee agent is backed by a brokerage and will advise and navigate you through the process.

What is the home owner’s role when using a low fee realtor?

• The homeowner must review the analysis with the agent to agree on a sale price, prepare their home for sale, work with their agent to schedule home tours, review offers, select the best offer, and complete paperwork with their agent to close the deal.  Please note that not all low fee services are the same, and some may ask you to do more work during the process to complete the sale (ie. handle the showings).

What they don't tell you about this selling service

• Some low fee services only offer you the lowest listing commission if you agree to also use them as your buying agent
• Remember that these platforms advertise a low listing commission, but do not normally mention that they want you to include 2% to 3% to the buyer's agent.  So a 1% listing commission would still have you pay 3%-4% in total commissions.   One exception is REX, which does not require you to offer a buyer's agent commission.
• Be sure to ask if the listing agents work specifically for the flat fee agency, like Homie.   Some flat fee services (like Clever) are just referring you to traditional agents, take a cut of the commission, and make the agent take an extremely low listing commission.  

 

Flat Fee MLS

This could be a good option for you if you want to list your home on the market, have a lot of knowledge of the selling process, and are willing to do all of the work to sell your home.    Just as a FSBO (for sale by owner), this option will help you retain a lot of your equity.

What general services does a flat fee MLS service provide for a client?

• A Flat Fee MLS Listing Service, is a state licensed real estate broker that provides an ‘Entry Only’ service. You pay a pre-set sum of money, and they place your listing on the MLS and make changes to your listing as you move through the sale process.  

What services do they not provide?

• Unlike a full-service listing, you won’t be working with an agent to handle your pricing, home preparation, showing requests, negotiations and any other activity associated with the sale of your home.

Is this service available throughout the United States?

• This is available wherever there is a licensed real estate broker. Companies that only do flat fee mls services might be state-specific.  

What are the costs/fees associated with using a Flat Fee MLS?

• When looking at an average size state, your costs may range from $299 to $500.  This may vary if depending on your state and any additional services you select from the service provider.   You will have to include a buyer’s agent commission when listing, so you will need to factor in 2% or 3% cost to your listing price. However, you only have to pay that commission if your property is sold to a buyer who is represented by an agent. If your buyer is representing themselves, then you will not pay that commission.

What makes a flat fee MLS different than other real estate services?

• Flat fee MLS is different from other services as the homeowner is doing most of the work when it comes to the actual sale of the home.

What securities come with using a flat fee MLS service?

• Using an MLS service ensures that your home listing is shown throughout the many MLS systems within your state.   However, the liability of the sale falls on the home seller. 

What is the home owner’s role when using a flat fee MLS?

• The homeowner is essentially acting as their own agent when it comes to selling their house and assumes the selling agent's typical duties.  While the MLS listings will give them the exposure to compete with other houses, the owner must do the bulk of the work.  When the house does sell, you are to let your listing agent know within one day.

What you need to look out for when using this service

• Not all flat fee MLS services are created equal.  Ask what specific MLS and websites your home will appear.
• Some MLS require you offer something to the buyer's agent when using their list service.  If you choose to not offer much to the buyers agent, some agents will overlook your home or not present it to their client.    There is legislation working to correct this unfair practice.
• Most flat fee MLS programs will offer additional services.  Before selecting a service, cost out their additional services so that you can budget accordingly.
• Regardless of what exposure your home gets, if it is overpriced and photographed poorly, it will be hard to sell.  Get an appraisal before you price your home, stage your home, hire a professional photographer, and get a pre-listing home inspection so that you can fix any issues (or cost them out accordingly). 

 

iBuyer

This could be a good option for you if you don't want to deal with the traditional process of selling your home.   While this option is the most convenient, at times, it can be more expensive than most other selling services.

What general services does an iBuyer provide for a client?

• Instead of listing your home on the market, an iBuyer will quickly present you a cash offer for your home and usually is flexible with closing timelines.  

What services do they not provide?

• Unlike the other services, you will not be putting your home on the market.  Instead, you will take the cash offer agreed upon with the iBuyer and close.     After you close, the iBuyer will then make updates on your home and put it on the market to sell.   

Is this service available throughout the United States?

• This is service is available in most major cities.   

What are the costs/fees associated with using an iBuyer?

• The average iBuyer client can expect to pay around 9% of the total sales price in fees.   In addition to fees, the iBuyer will hire an inspector after the original offer is presented.  Unlike the traditional process of selling, the iBuyer does not typically let you correct issues found by the home inspector.   They instead deduct the estimated costs of issues from their original offer.  

What makes an iBuyer different from other real estate services?

• While it can be more costly than more traditional selling services, using an ibuyer removes most of the traditional pieces of selling your home since you do not list, nor do you have to prep your home to sell.  

What is the homeowner’s role when using an iBuyer?

• The. homeowner has to review the iBuyer offer, contract and set the agreed closing timelines.  

What you need to look out for when using this service
 

• Most iBuyers only purchase homes within a certain age, area, and small lots (under 2 acres).
• Homeowners reject the majority of iBuyer offers. However, iBuyers still profit from the rejected homeowners by selling their information to traditional real estate agents as sales leads.
• Most iBuyers create their original offer based on algorithms and sourced data. Always do your research to ensure you receive fair market value for your home.
• Read your contracts carefully, as some have multiple fees that are applied to your total cost.
• If you choose a delayed closing, read your contract carefully to ensure you will not incur extra expenses and fees.
• Be prepared during the home inspection phase to know what the trust costs are of the issues the iBuyer would like corrected.