Don't Discount the Value of Professional Realtors in Selling Your Home

by Chris Trapani, Coldwell Banker Silicon Valley President

Every so often, a news story will pop up about whether it's better to use a full-service real estate brokerage to sell your home or a discount agency or even take a do-it-yourself approach. The article will inevitable lead some customers to ask us why we don't cut our sales commission to compete with a limited-service company. That's a fair question given the cost associated with selling a home. Here's what I tell them:

First of all, there's nor right or wrong way for consumers to sell a home. Full-service agencies, limited, services agencies and even the sale-by -owner approach all have their pluses and minuses. There is not one-size-fits-all. Just as some people prefer to shop at a Nordstrom or Macy's, others would rather shop at Target or K-mart. But it's important for consumers to know what they're getting themselves into when they pick one over the other.

Like most things in life, you do get what you pay for in real estate. Limited-service brokerages may cost less, but they will also do less- putting more of the burden on you to sell your own home. You need to ask yourself if this is something you have the time or expertise to do. The answer in most cases, is no.

Selling a home is a lot more complicated that sticking a sign in the ground and waiting for buyers to come running. And it's getting more complicated all the time, given the growing number of legal and regulatory issues. There are numerous disclosure requirements, title reports, financial documents, inspections, and of course a negotiation process that sometimes can be long and contentious. Professional agents can smooth the difficult process and take the burden off of you.

Just as important, Realtors have the professional expertise and the time needed to properly market a home. Real estate agents prepare extensive marketing strategies and material, create and place compelling newspaper advertisements, design and send out direct mail ads, help "stage" the house so it looks its best, hold open houses to show the property, and follow up with potential buyers and their agents. Full-service real estate agencies also can tap into a network of buyers from across town, across the country or even around the world in some cases to reach the largest pool of potential buyers.

Last but certainly not least, Realtors more than ear their commission in the negotiation process and by keeping the deal together through the escrow period. Professional agents are savvy, experienced negotiators who know how to get the very best price for a buyer or seller. Equally valuable, they can navigate through potholes that inevitable come up during escrow, helping to ensure that the sale does end up going through.

Some first-time home sellers may not realize that agents work strictly on commission, they receive no other salary. It's on of the few jobs where you only get paid if you achieve the customer's objectives. Agents invest time, money and expertise with the knowledge that they might not get paid at all. It's not unusual to work for weeks or even months and not get paid because the market it too slow or a buyer or seller back out of the deal.

It's also important to remember that the agent who helps you sell the home doesn't keep the entire 6% commission themselves. They split it with their brokerage office and the buyer's agent. The end result is that the seller's agent may only end up getting a 1.5% to 2% commission when all is said and done- not an unreasonable amount given the time and expertise involved in such a complicated and lengthy transaction. Can you find agents and discount brokerages that will take a lower commission? Yes, but sach an arrangement may not be in your best intrest Bear in mind that if an agent takes a lower commission to sell you home, he or she will probably offer a lower commission to sell your home, he or she will probably offer a lower commission split to an agent representing a potential buyer.

Conversely, someone who cuts their commission to get your listing may have less incentive to spend as much time working on selling your home than they would spend on another one of their listings where they will be receiving a full commission.

Is it possible to market your own home? Absolutely, but you need to ask yourself if it makes good business sense. Just as you wouldn't represent yourself in court or treat yourself for a serious illness, I think it doesn't make much sense to represent yourself when it comes to the most difficult financial transaction of your life.

Those sellers who choose not to go with a full-service brokerage are at a decided disadvantage. I've seen them hold open houses, ill equipped to answer questions from potential buyers and often pricing their home at unrealistic levels. Their property often sits on the market for a long period or they end up selling for less than they would have gotten had they marketed their home correctly in the first place. Yes, they may have saved some money on a commission, but they lost much more by getting a lower price than if they had marketed it with a professional.

Selling your house is easily one of the most complicated financial transaction you will ever go through. My advice is not to shortchange yourself. Working with a full-service real estate professional can save you a lot of time and countless headaches - and help you get the price your home deserves.