Do I need to use a real estate broker to sell my house?
Having A Professional Broker/Negotiator Can Improve Your Net and Reduce Risk
Everyone has their own idea about how to sell real estate and what level of service or marketing they need to be successful. But ultimately what is the gauge of success when selling a home? The fact that a person sells a home "by owner" by placing a red and white sign in the yard and striking a deal with a buyer or a Realtor doesn't necessarily mean they were optimally successful.
Imagine that for every home there are likely three buyers. Each of those buyers is willing to pay a different amount for the home. The successful home seller engages the right buyer and achieves the highest sales price for the home.
Listings fall into 3 types based on the level of service: 1) full-service 6% listings; 2) limited service flat fee MLS listings--where the seller represents themselves in contracts--and 3) a hybrid version of the two where the seller pays a flat rate to list but receives full-service contract-to-close representation which is our PRO program.
The primary reason why it is smart is allow a broker to negotiate for you and not represent yourself is because the flow of information between the buyer's agent and their buyer is gathered and analyzed by someone other than yourself. Our Brokers ask difficult questions about the buyer...what they have seen besides your home, how much they may be willing to offer and many more questions that a seller just isn't in a position to ask. This information is critical in determining whether or not this is your buyer as well as determining how to best counter that buyer.
Assuming we can negotiate acceptable terms, there is the contract itself and the addenda that accompanies that contract. Just because we have negotiated the right price doesn't mean that buyer can close.
Often, buyers will come ready to make an offer with a "pre-qualified" or "pre-approval" letter in hand. However, often that letter is not worth much more than the contract they signed to buy the home if they can't close the deal. Never assume a "pre-qual" letter is authentic. We call the lender and ask the tough questions such as, "Has the buyer provided all necessary financial information to get the loan?" If we are suspicious of the lender or the buyer, we will require the lender provide what's called a "pre-commitment" letter which states the buyer is approved through underwriting and the loan is subject only to appraisal, inspections and insurance.
Another reason why you don't want to negotiate your own deal is that the buyer's agent is not your "friend". As a matter of fact, they are experts in real estate contracts and likely know a great deal more about FAR and FAR/BAR contracts than you do, which can work to your disadvantage. Often, sellers that represent themselves are so excited about getting an offer that they agree to the terms too quickly and as a result have not negotiated a deal at all but rather just accepted an offer.
Offers and buyers are not to be trusted. Not in the sense that buyers are liars but rather it should be assumed that a buyer will and can pay more than their Realtor says they can or more than the amount their pre-qualified letter states. Having a skilled negotiator can bring out the best offers and push that buyer to the wall.
Next is the "the empty chair" philosophy which means leave the final word to your broker and don't lock yourself into terms that can't be undone. If you have a broker representing you, you have an automatic "delay" between all conversations. If asked by the buyer or listing agent whether you would take "x" for the property you can always say, "I appreciate the offer, please make it through my broker." That way you allow time for yourself to think it through, speak with your significant other, etc. and allow me time to see if there is more money behind that buyer. So in essence, you are just an empty chair and no one can make you commit to any decision on the spur-of-the-moment.