Sell flip home self or Use realtor?

Question

The deal:

Realtor 1 charges 1% to sell my rehabbed home and she got me my 1st rehab home at a good price. We don't agree on everything at times, and she is older so she makes mistakes. 18 yrs exp.

Realtor 2 is offering to sell for 3% and has 10 yrs exp. She helped me get a code guy off my back that was overreacting about our rehab. She says she's a master negotiator.

Me - I'm a pretty smart, detail handling person. I figure I know the most about the home and think "no one knows a product better than the person who made it". I realize I have to handle the contracts, negotiations and showings. I have a good Title Co picked out. We went over budget on this one so I figured I could recoup some funds if I sell myself.

What is your professional opinion? Who has sold themselves? Any issues? Would my original realtor be unprofessional and/or upset that I didn't use her?

Kenneth Garrett · Answer

@Michelle S.

On my flips, I use a flat rate listing broker to get the listing on the MLS.  About $500.  I then pay the buyers commission of 2.5%.  It works well and I am able to save a few thousand dollars.  I work the buyers agent and negotiations are all done through me.  Sometimes the brokers are confused of the arrangement because I’m not a licensed broker.  I have saved tens of thousands over the years.

Jonathan Greene · Answer

This statement in and of itself means you need to step out of the way and hire non-discount agents if your flip is good.

"I figure I know the most about the home and think "no one knows a product better than the person who made it".

When you say 1% and 3%, do you mean just on the seller's side? How much going out to the buyer? It makes no sense to me when someone flips a home and then tries to FSBO or use a discount agent. You might as well tell all the real buyers and agents that know what's what that you are cheap and will think that everything is perfect and not take well to repair requests.

Everyone knows what you are doing when you price high. This is always why. "We went over budget on this one so I figured I could recoup some funds if I sell myself." You can't recoup your errors by being cheap. Hiring the best agent with the best marketing helps get the highest price.

David M. · Answer

@Michelle S.

Maybe you need to find third option/realtor...

Knowing everything about the rehab of the home isn't a great "selling" point to represent yourself.  Any competent agent should be able to come up to speed quickly on the condition of the property.  Also, if really nitty gritty details are required, either it really shouldn't be necessary or he/she can just ask you.

Knowing "everything" about the property is one of this misnomers in my opinion.  Its important to be knowledgable, but not should be really the deal breaker.  I don't know your experience, but agents do plenty of other activities.  There is much more to the profession than just knowing how a property was rehabbed.  Honestly, if you find a buyer who is really interested whether a water line is run in this bay vs that bay or something similar, that's too picky a buyer...

Good luck.

Michelle S. · Answer

That realtor dropped the ball a couple times during our first closing transaction, and sometimes she says things that aren't true after I check.

I don't think I know more than a realtor (however in some cases I've found some TX ones to be highly incompetent and bad at their job), I stated that I know more about the home I just rehabbed - which is I do since I built it and designed it, so I would be good with details and questions.

Jack Seiden · Answer

its really important imo to have a second set of eyes on anything your buying, a good realtor will tell you what not to buy, also are you really capable of calmly negotiating your own deals? I've had many deals with difficult sellers that I would have blown up without that buffer.

David M. · Answer

@Michelle S.

Well, its tough to say if any of your Realtors will "... be unprofessional.."  Other than the general line "that properties listed with a Realtor sell for more," it really comes down to are you comfortable representing yourself?  Will you be able to generate sufficient advertising?  how will you handle the showings?

For that matter, will you offer any cooperating commission if a Realtor brings a buyer?  From the commissions you've stated, I'm not sure if that includes a split for a buyer's agent.  But, its pretty to very slim.

Not just because I'm a Realtor, but it is a profession and good one earn their commission.  Usually, its good to have that "buffer" when negotiating (just like having an attorney for any legal matter).  I've found that self-representation can be a bummer that way.

Good luck.

Michael H. · Answer

@Michelle S.

I’m curious about your comment, “she’s older so she makes mistakes.” What’s that supposed to mean?

The commission is the commission for a job well done. Pay it, build a relationship, and make money together.

Thinking that you know more than a person who actually took a test to obtain a license is probably a mistake needing corrected.

Russell Brazil · Answer

So here is the question.....are you going to cut yourself off from a deal source to save a few bucks?

Michelle S. · Answer

Thank You Sir - Very sound advice.

Sell flip home self or Use realtor?

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