High prices and low inventory. That’s the best way to sum up the current real estate market.
Or, to put it another way, it’s very much a seller’s market, and buyers have little bargaining power. Not only are buyers battling over homes to capitalize on low mortgage rates, they’re driving already-inflated prices upward via bidding wars.
If you’re thinking of selling your home, you’re in a strong position to make a profit. But how much of that profit do you want to keep? If you hire a real estate agent to sell your home, you’ll part with a chunk of that profit in the form of the agent’s commission.
In a normal housing market, it’s easy to argue that it’s essential to work with a real estate agent. But today’s housing market is very different, and it raises the question: is an agent really necessary? Or should you sell your home yourself?
6 Simple Tips to Secure a 1.75% Mortgage Rate
Secure access to The Ascent’s free guide that reveals how to get the lowest mortgage rate for your new home purchase or when refinancing. Rates are still at multi-decade lows so take action today to avoid missing out.
By submitting your email address, you consent to us sending you money tips along with products and services that we think might interest you. You can unsubscribe at any time.
Please read our Privacy Statement and Terms & Conditions.
What’s the right call?
If you enlist the help of a real estate agent to sell your home, you usually have to pay a commission of anywhere from 4% to 6% of the amount your property sells for. This means that if you sell your home for $400,000, you pay your agent $16,000 to $24,000. That’s a lot to part with, especially if you plan to use the proceeds of the sale as a down payment on your next home.
On the other hand, selling a home can be stressful. You need to market that home so buyers know it’s out there, and you need to negotiate with buyers and entertain offers that aren’t always straightforward. A buyer might come in with what seems like a great offer, but load it with contingencies. In some cases, it can pay to accept a slightly lower offer for a house depending on the “catches” of a higher one. And a real estate agent is the best person to walk you through that process and identify the best deal.
Not only can a real estate agent help you work with potential buyers, an agent can also help you stage, market, and price your home to help you command top dollar for it. In fact, your real estate agent may get a sale price for your home that easily covers the commission you pay.
Going back to our example, say you hire an agent who markets your home and negotiates on your behalf, so that instead of commanding $400,000 for your property, you walk away with $430,000. Of that, you might pay $17,000 to $26,000 for the commission. But even if you look at the higher end of that cost range, you still walk away with more money in your pocket than you would if you sold your home for…