Monday, March 14, 2011

Selling Your House: Hire an agent?

We decided to sell our house ourselves (Guilderland Real Estate). We did think about hiring a real estate agent, and I talked to a friend who is one before making the decision.

There are some key issues in making this kind of decision. First you have to consider yourself, and second you have to consider the agent.

I'm motivated by what I saw yesterday, so I'll address the second one first. Agents are not always great.

We went to see some open houses just to see what else was on the market, and to see the information sheets they were handing out.

For the first open house, the newspaper listing for it had the street name incorrect. I went to the listing on the agent's website and the directions to the house were also wrong. I figured out where the house actually was, and at least from the outside it appeared to be overpriced.

The second open house was better. We arrived shortly before it ended. The only problem was that the agent had run out of information sheets. But she was there and she was helpful.

The third open house - we arrived early. Three other cars showed up around the time it was supposed to open. The agent was late.

Now that's unusual. From past experience I'd say most agents do better than what we saw yesterday, but just keep in mind that they're not perfect. The home owner has more incentive to get things right.

Another way of looking at this - in some situations people say you should have a driver. Princess Di had a driver. It doesn't always work out well.

But that brings me back to the first issue - knowing yourself. The big question here is whether you're really capable of selling your house yourself.


1. Can you be objective about pricing?

Our neighbor paid $369K a few years ago for a smaller house on a smaller lot. So our house must be worth over $400K, right?

I started out that way, but taking a thorough look at what's on the market now, it was apparent to us that our house is not worth that much. The market has changed. I see a lot of sellers who haven't accepted reality. If you can't deal with that, an agent may help you by presenting you with evidence.

At the same time you might also underestimate the value or have difficult deciding what to do about a low-ball offer. A good agent will help with that. Negotiation is a part of our work, so we think we can handle that.


2. Can you stage your house?

I'm a slob. I've gotten better over the years, but I still tend toward messy. A messy house is a turn-off to buyers.

Fortunately my wife is neat and she has a good sense for setting up our house to be attractive to buyers. She's done lots of little things and a few big things. Most of all she's gotten me to be neater.

If you're not good at that, you may need an agent to help you stage your house.


3. Can you step back?

When buyers come to your house, they don't want you following them around. You need to let them look around. Desperate sellers in particular have trouble with this. And some people are emotional about leaving their house.

An agent will generally be unemotional and professional. If you can't do that, you probably need an agent.

I have some emotions about our house. We've lived here for 11 years and raised our kids here for their whole lives. We have wonderful neighbors. It's a great house. But we will remain professional when showing it.


4. Do you know how to advertise?

A huge advantage for most agents is that they have built-in systems for advertising. Their brokerage buys ads weekly in the newspaper. They have preferential access to some real estate websites, especially Realtor.com.

In my case I have been advertising my law practice on the internet for close to eight years. In some ways I know what I'm doing better than most agents. And in some ways not. But I've figured some of it out and we are at least on the major websites.

One key here is that many buyers are working with agents. Many sellers do not want to compensate agents (commissions can be very expensive). But that means a big chunk of the market will not know about your house. In my opinion a seller has to compensate buyers' agents. We decided to pay 3% to buyers' agents. That may be slightly higher than normal but we think it's worth it.


I'm interested in hearing what others think. Please post comments.
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