Do I need a realtor?

23 Replies

I've been talking to a lot of people and can't quite get to the bottom of what a realtor can do for me. They say they can access more buyers, but can't I find most of them just by doing a flat fee service to get on the MLS? What is this magic marketing they do? As background, my house is in a pretty popular neighborhood in a medium-sized city (Madison, WI) with a strong sellers' market.

Most realtors just put your house on the MLS and wait. If you're fairly well versed in real estate, willing to take the calls and negotiate with the potential buyers, you don't need an agent.

@Al Ball

If you place the property on the MLS using a flat fee, that will make sure that it is in the MLS. That's it.

And, if you list on the MLS, you still have to agree to pay a commission to someone that brings you a buyer. That essentially means you are paying a buyer's agent to work against you.

Only 1/3 of MLS systems automatically syndicate to Zillow. So, your mileage will vary depending on where you live. Agents make sure listings are syndicated to all the major sites, which is especially important for spotty coverage areas. Sometimes that means doing it by hand, sometimes using systems that push out the listing to the public sites.

So, what does a listing agent do for you? It depends.

Yes. Some agents will do the three Ps - Post it, Put a sign in the yard, Pray.

A large part of a listing agent's job is marketing. Not everyone is good at it.

A very good listing agent will have a detailed marketing plan to net you the most money and then negotiate on your behalf and see the transaction through to closing.

First step is Price it right. Most FSBOs overprice their homes. Most give up within 2-3 weeks. 90% eventually list with an agent. Buyers don't call on overpriced listings. Some of that is related to how buyers search online. If you're outside their budget bracket, they don't even see your listing.

Very good agents prospect daily for sellers and buyers, either by phone, door knocking, or online. Do you plan on doing that as a seller? Will you do that 5 days per week? Of course not, no seller has that kind of time.

What else does marketing mean?

Short list:

Professional photos and video. Stand alone website with the photos, video walk through, neighborhood school and transportation data.

Direct mail campaigns of Just Listed post cards.

eFlyer to agents in the area.

eFlyer to email database

Flyers, door hangers, and drop cards for neighborhood door knocking ahead of open houses.

Featured listing blasts to database.

YouTube channel for video walkthrough and updates.

Just Listed Facebook ads with links to standalone website and/or YouTube channel.

Post Just Listed ad on business page, share on personal page, and in FB groups.

Facebook Live shots of putting the sign in the yard, during the open house.

Phone prospecting  to generate open house traffic.

Scheduling of tours with either buyers or agents with buyers, done through scheduling services.

1-800-number with property info on voicemail, with live customer service support, attached as a rider to the yard sign, all print and online materials.

Print magazines and newspapers.

Will every agent do all of these things on every listing? Of course not. A very good agent will still have these things available when and where these tactics are needed.

Great list, thank you. Since I’ve never received any of these fliers, I wonder how many really do that! I can do some but not all I that...

Hi Al, shoot me a PM, I have a fantastic realtor I use that I can put you in touch with. He is incredibly good. He’s sold all of my properties for over asking and quickly to boot.

Hi @Al Ball ,
@Christopher Phillips nailed it on this one, a good listing agent with a great marketing plan and great track record will make you more than they cost by marketing your home to sell at the best price, pricing it right and with their knowledge(laws, contracts, negotiation). It wouldn’t cost you anything to interview a few local agents to get an idea of what they bring to the table. Be sure to ask good questions and ask for proof of their track record when you interview agents. If you need recommendations for a top tier agent in your area just let me know! Good luck on your sale!

Originally posted by @Al Ball :

Great list, thank you. Since I’ve never received any of these fliers, I wonder how many really do that! I can do some but not all I that...

Al, another factor to consider is that many buyers agents will not even show FSBO listings..... To tell the truth FSBO listings are either A) listed by Realtors themselves or an investor who knows the game and real estate business, or B) a overly demanding seller with unrealistic price expectations who doesn't see the value in hiring a professional to do the work. Most buyers agents don't want to deal with those headaches, and may steer away their buyers from those homes.

Thanks Matt. Many have been saying what you said, but it’s looking like, at least in a sellers’ market such as this, an agent is not going to be necessary...we’ll see how inspection goes, though! 🙏🤙

@Christopher Phillips gave a great run down of what an outstanding agent will do for you, so I won't reiterate.  I'll just add my two cents, which is that most listing agents are NOT worth the 2.5-3.5% they collect to list and sell a house, but a few absolutely are.  Find yourself one who is worth it and you'll never find yourself asking this question again.

Yes as mentioned many FSBO properties can be a nightmare to a buyer broker. With FSBO usually there is one time showing agreement where the FSBO agrees to pay a certain commission.

True FSBO is different than flat fee services but still almost the same.

Usually in both cases the seller is not represented by a broker. The flat fee service is generally  a listing only service and the agreement spells out the brokerage is listing the property and that is it. There are then usually layers of option style items for more cost that a seller can select.  

2 main things:

1. Unless just an incredibly hot market and no other regular listed and represented properties exist the buyer brokers will shy away from FSBO most times. They would have to worry about a FSBO screwing them out of money plus they would be put in a difficult fiduciary position. Since the seller is going it on their own trying to be cheap the broker/agent would be put in the middle of being asked for help by the seller essentially doing the job of two brokers. This can form an (implied representation and liability) to the buyers broker even if it was not intended. Also brokers/agents like to work with other professionals where they know that side of the transaction (hopefully) is handled smoothly without a lot of drama and headaches.

2. Since a FSBO is saving on the listing side with commission the buyer then usually comes off the price offered by at least that amount as the seller is not paying that much of a fee.

Example: 200k property at 6% total commissions= 12,000

FSBO offers 3% to buyer broker. ( seller thinks wow I just saved 6,000 on listing side).

Buyer when making offer think ( wow as a buyer I can offer 6,000 less to seller as they are not paying for a listing broker!).

There are many other things at play. FSBO can have it's place but I mainly see it with very experienced sellers that sell all the time. Most that try FSBO instead have not sold anything ever or in many years or decades. It's alluring to try and save money so they go FSBO and spend 500 to 1,000 and then usually fail and go to regular brokerage. They end up spending more money and losing time in hopes of saving money upfront.

I sell commercial property so have no dog in this hunt (debate). I run into sellers on commercial that sell their own property but they are very,very experienced with commercial attorneys on staff (developers,REIT's,etc.). I put my fee in the LOI and I do not have to hand hold the seller.

   

For an objective list, read this article.

There are a thousand things that can go sideways. A savvy buyer may try to take advantage of you working without protection. You may not understand the laws or contracts and get yourself into a pickle.

I sold my first home as a FSBO in 2000 using the newspaper and an attorney. I saved all that commission. However, I later learned it should have been priced higher and I spent almost three months dealing with a buyer that continually tried to manipulate the transaction. Had I listed with a REALTOR that knew the market, I wouldn't have dealt with all the mess, it would have closed quicker, and I would have netted about the same or more.

Realtors are great because the average person looking to buy or rent a house will often go to them first. 

Think of the people who are looking to buy their first home, or upgrade their home when they have a family, they will go to a realtor to find their new home. These are the buyers that will pay a higher price to buy, because they don't understand the market like investors do.

You don't NEED a realtor, but in certain markets, they can save you both time & money. It also pays to have one on your team as they often become aware of deals when they first become available.

Originally posted by @Al Ball :

I've been talking to a lot of people and can't quite get to the bottom of what a realtor can do for me. They say they can access more buyers, but can't I find most of them just by doing a flat fee service to get on the MLS? What is this magic marketing they do? As background, my house is in a pretty popular neighborhood in a medium-sized city (Madison, WI) with a strong sellers' market.

 I just sold a nearly million dollar house myself. Realtors kept calling me telling me they could do all these great things. Except in reality none of them had anything other than a HS Diploma or anything that showed that they are an expert in marketing. One lady called me and when I interrupted her 20 minute long script to tell her I was not interested, she yelled at me and told me I interrupted her. I just hung up. Even my buyer didn't use a realtor. An outdated relic with a commission structure that is outrageous. While there are SOME good realtors out there, the reality is that these are cookie cutter forms a person with average intelligence can fill out on their own. It's not like the Realtors are writing the legal verbiage of the contracts. They just fill in the blanks. Gosh, let me pay 70K+/- commissions for a person with a HS diploma to do what the 16 year old kid working at Jack in the Box can figure out in about an hour on the internet...

On the buying side it's worse. I used to use this realtor who would just try to get me to buy the first two houses I looked at (when I was in the market for two rentals at once). She was really looking forward to getting fat checks for about 2 hours of work. It turned me off. Like I said, a relic of the past, soon to go the way of the travel agent. Honestly other than getting into the house, I didn't even need a realtor. To me, that's all most of them are good for. It's such a low barrier to entry profession, that they are not really experts in it anymore than the average Joe. I'm sure the realtors on here will lambast me, but this is the reality. Earning 70K on a house deal to fill out cookie cutter contracts is outrageous. They should be making $500 flat fee, just like the flat fee listing places do...

Im a realtor and I help with the investor (buyers and sellers) with their closing cost out of my commission. I think you should ask the same of your realtor. 

My wife and I sold our primary residence in Silicon Valley mid last year, and if we had not hired a great realtor it just would not have been the same experience. The market there was/is frying pan hot-so who needs a realtor right? If it had been up to us we would have priced it wrong about 400 k low. Then we would not have done all the disclosures, we would not have painted throughout, nor would we have moved out all our furniture and gone with staging. We simply would have relied on the heat of the market-I know this because the realtor had to work hard to steer us in the right direction. When the offers came along we would have taken the wrong one, as it was the house sold for over-quite a bit over-and in about 10 days. The preparation however was about two months and the realtor brought in the whole team and kept a tight schedule. I have always used a realtor to buy or sell, it is a complex transaction-lots of details and opportunities to get screwed, done properly it is not an easy job it is hard work and takes considerable know how.

I sold 3 in the last 10 months.

1 was with a full service realtor.  Eventually an OOS buyer actually closed. It was vacant and staged. I had to go over 4x per week to close the back door twice, turn off lights, turn down the a/c, etc. It was a nightmare.

Next 2 I did FSBO. 1 was sold to the neighbors kid. No realtor, but I had to do double duty. Keep us on track and find them for signatures and stuff. I wish they had an agent.

The sweet spot was FSBO with a la cart pricing. My price was very fair. If they had a realtor, or wanted closing costs, they added it to the price. They had an awesome agent and they paid for her. Perfect.

But... I knew how to price and knew the lead and condition disclosures my state requires.  I knew their mortgage people and the title co. I know the standard PSAs inside and out.  Most are better off hiring a pro, but I saved $18k going solo using Craigslist and Zillow and hiding a key in the garage. No more lockboxes that allow any idiot that wants to come through my houses.

IMO,

Do you need a REALTOR? Nope, Do you need a Landscaper? Nope, Do you need a Painter? Nope, Do you need someone to hang doors and replace locks? Nope, do you need a mechanic? Nope, Do you need someone to hang a garage door? Nope, do you need a carpet installer? Nope, do you need a Bartender? Nope, Do you need a siding person? Nope. Do they do a better job than I could do at those tasks. Yup (generally speaking of course)
The people that do it all day know the nuances that allow them to perform a task better, easier and have the tools at hand to make it cost effective. Could I go out, buy paint, rollers, drop cloths, tape, brushes and find some old clothes to paint a showcase house with just a couple extra runs, a few extra soft spots and some not quite as good lines as a pro in about 215% of the time? You betcha!

For things you are good at you should do. For things you are learning, expect to pay the learning fee to get it right. For things that you hate, hire out.

Good Luck!

Guys, just as a reminder, I was asking what it is that realtors actually DO - particularly in terms of marketing. I kept hearing about this “magical special sauce” that sounded like a bunch of BS...

If your house is going to sell itself and you can field the calls and offers you probably don't need a realtor.  If you have no concerns about reading a purchase contract or the other intricate details involved in the transaction you probably don't need a realtor. I'm of the mind that the house sells itself and all most realtors is just unlock the door to let people look inside. No matter how great or bad a realtor is people will either like or not like the house they look at and most people direct the realtor to what homes they want to go look at based on whatever they see online.

You definitely want a service that will put you on the MLS. You should be prepared to pay a 3% commission to the buyer's realtor.

I think people are slightly less likely to want to buy from you if you represent yourself. I think some buyer's realtors will try to guide them away from you if you represent yourself. I think you will probably sell the house for a little bit less if you represent yourself. That being said your listing realtor is going to charge 3% to sell your house. A good realtor should hopefully be able to get you at least 3% more and take care of all of the headaches for you.

I don't think they have any special sauce. I think more than half of realtors are people working part time that don't do any deals and aren't worth your time. I haven't met one yet, but I think the right realtor could be well worth the fee.

Al the experienced brokers and agents have a very deep network to put deals together and keep deals together through closing.

On the residential side about 90% of new agents fail the first year. After 5 years half of the remaining ones are usually gone. If someone lasts more than 5 years in real estate full time closing deals they are doing something. Most just do a few sales the first years and then go out of the business or pick up another job to supplement their income. I saw this in last upturn where all these people get licensed and barely make sales in a hot market. Then down turn happens and the herds really get thinned out fast. The remaining brokers/agents are the war horses who have survived and thrived in any sales cycle.

Jack B. more power to you and happy for you if you can sell on your own. On the commercial side I am sure there are others like you. I never run into them. I don't get out of bed for 500 dollars............ : )

My minimum on a deal is 50,000 in commission and most are over 100,000 a transaction but what I do is specialized for commercial retail properties. Commercial brokers and agents tend to be seasoned and stay in the business their whole career. It is a different level of knowledge and commitment to the career for most. I have some friends in residential real estate selling 10 to 20 million a year or more but are in the top 10% nationally.

What I love about my model is I am not a volume business. Make money each transaction, plow into investments, rinse and repeat. Where brokers and agents mess up is in a hot sales cycle they buy cars, houses, trips, load up on credit card debt living fat in the moment not thinking of when the train is going to slow down or even stop for awhile.

If buyers do not want to use a broker/agent then simply do not use one. Nobody is forcing anyone to do anything.  I have clients that want service and come to me for business. I learned long ago 15 years in the business not to try to convince people that appear to be set in their ways to do anything. It's like constantly swimming against the stream being you put in a lot of effort but you never really go anywhere. It's not a good use of my time and frankly I do not want to put in the effort............ : )

I am a Realtor and I want to throw in my two cents. No. You dont need a Realtor but in EVERY case where I have represented a buyer who wants to buy a unlisted/unrepresented home the appraisal came in much higher than our negotiated price. Some as much as 17% more. Additionally in each case the sellers all agreed to pay me my normal comission. So are you ahead financially? In my experience, no.

In my area, we have little inventory and yes if a house is added to Zillow or other websites by a seller there is a pretty good chance that the home will sell. Heres the problem: We agents are getting multiple offers on many listings within days or hours of it hitting the MLS. We are begging for houses to sell. I think by selling your home yourself you are cutting out much of the traffic that would come to your house and in my opinion getting more interested buyers usually means more net for a seller. I recently read a facebook post from a seller who just sold their home with multiple offers and she received $100.00 over list price! When I looked up their home and the sales price, i think they left thousands on the table (or just gave it to the buyer in this case)

What does a realtor do? I guess from my standpoint is what we (NAR) have been saying consistently for decades. Basically we get you more for your house. NAR says 9% but my numbers are running at around 11% (the best I can figure)

Cool but why and how...

@Al Ball

"cool, but why and how"

You can keep asking for "the special sauce" but it does not exist. I work with new agents who expect me to have an outline I can hand them to succeed. When I tell them what to do they look all perplexed and confused. 

It is like this, I spend 60 hours a week talking to people about buying and selling real estate. I know who is buying and I know who is selling. It is no different than cars/ baseball cards/ antiques or any other commodity that is unique. Sure you can find cheap napkins on Amazon or a set of pads for a 73 Mustang on ebay. But those items are not unique. Real estate is. You need to know who is looking for what. Can you throw something on the MLS and on Zillow and get lucky every now and then? Sure most agents sell a few a year.

New agents often believe if they can get 4,000 likes on a post on Facebook or 12,000 impressions it somehow is going to translate into a sale. They walk in and believe they can sit home on the computer, put up a couple posts and BAM offers for over asking come flooding the inbox. In reality it is far from that. So if you want to succeed go to breakfast on Monday at the local vets club, Lunch at the little Diner, Wednesday coffee at a different diner, and lunch at that BBQ joint and wash it down with a beer, volunteer at 2 different organizations. Frequent local establishments and get to know the owners. Join the Chamber of Commerce. You are actually working the whole time. Does the advertising and social media help? yes, but online leads look to you as a piece of information and will dump you in a heartbeat to save 25 cents. Relationships trust you and believe that you will work it for them.

We sell tons of property that never goes online, never hits the market, has not a single postcard ever created. Because the buyers and sellers get brought together before hand. Do you need a REALTOR? maybe, if they are throwing it on the MLS and Zillow and hoping for a sale, then most likely not as long as you have the docs and experience to go through the sale. Will the right one help you and be worth it? Yes

Good Luck!

@Al Ball

They are usually better negotiators, have more contacts, do a lot of work for you, etc, etc. I personally like having an agent just to lighten the workload on myself. They do so much and make it so all you have to do is sign on a couple dotted lines. I can do more productive things with my time and let them do their job, and a good realtor can sell your house for more than you can on your own (usually).

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