A few days ago I linked to a bit from The Dave Ramsey show, where Dave talks about why he’d use a real estate agent to sell real estate in spite of the fact that he might save a little money selling By Owner. As I thought more about it, I realized there were three reasons why I think he got it right.
But first a story.
I purchased a home, my first home, For Sale By Owner. My wife and I had been working with a great agent here in Blacksburg, and we found this home while walking through a neighborhood we really liked. We found out more, told Sam (our agent), and he did his best to provide us representation but the seller would have nothing of it. “If we wanted to buy the house, fine”, he said, but he wasn’t going to work with an agent. Sam offered the seller all sorts of possibilities because he knew how important it was that he be involved in this particular purchase, but time and again he was denied. After discussing it among Sam, Natalie and I, we decided to move on the purchase while Sam provided assistance in the background, and we eventually bought the house.
Did the seller get a good deal? Yes. Did Natalie and I get the house for a fair price? Knowing what we know now about the house, and with my current expertise regarding real estate in that neighborhood, no. Were we able to make it a great home? Of course, and I think in some ways we wish we’d never left it. But we also know that we could have avoided many of the problems we discovered in the home if we had pressed to use the expertise of our agent – if he’d been able to see the home, inside and out, we would’ve learned all sorts of things that might have impacted our decision of whether to purchase, and what price fair market value really was. But seriously, we loved the rodent dens we found, and the furnace leaking condensation into the carpet.
So Dave’s comment is important for three reasons, I think.
First, there’s no one who knows your home better than you; a REALTOR can’t have your expertise when it comes to the nuances of your particular home. I used to live in a neighborhood where I knew every single floorplan – the names, the room sizes, all of it – but no matter how well I knew that neighborhood inside and out, there were 144 homeowners that knew more than me. What I had knowledge of was the market in that neighborhood – what price the Baldwin plan could fetch at that time that another plan couldn’t, for instance. You put the homeowner’s expertise with my own, and we sold every house over there time and again.
Second, an active REALTOR (Dave references Pareto’s Principle) is going to not only have an active knowledge of the market where you are (and if they don’t, they should be referring you to someone who can assist you better) but they’re also going to have an active knowledge of what it’s going to take for a buyer to buy your home. Just because you think it’s a great price doesn’t mean we can get it, if buyers can’t qualify for funding, or you’re setting a new price point that can’t be appraised for the neighborhood. You want to be working with an agent who can demonstrate their expertise, not just boasts of it, and you certainly don’t want to be working with an agent who’s part-time – are you going to get part-time exposure?
Third, and probably most important to the majority of home sellers, is that selling For Sale By Owner does not always save money. Does it sometimes? Sure, the stars can align. Does it always? Not necessarily, and I hope to have more on this in several weeks if some things fall into place. The point is that you rely on a doctor for their expertise and understanding of current and appropriate medical care, always trying to choose one that has never been involved in any cauda equina syndrome claims or similar issues, you rely on your lawyer for aggressive and competent representation, but when it comes to selling a home don’t overlook the importance of an experienced, full-time REALTOR.
The holiday season is nearly here, which means many shoppers will be driving in and out of store parking lots for the better part of a month. All that activity can up anyone’s chances of being in a parking lot accident. Which may lead you wonder: Who is at fault for a parking lot accident? How does insurance cover parking lot accidents?
Don’t take my word for it, take Dave’s. And if you’re fond of rodent dens, then be my guest. 🙂