With how hot today’s market is, you may find someone willing to buy your house just through word of mouth before you even have a chance to list it. You may be tempted to try and close the sale on your own to avoid paying commissions to a real estate agent. While it is doable, there are many hoops to jump through in order to have a legal sale and closing. Real Estate agents are trained and experienced in all the different steps and make sure your sale goes through smoothly. Here are some reasons why you might still consider involving an agent in your sale and why you need a real estate agent even if you have your own buyer.
Agent commissions are completely negotiable. There is no law that states how much an agent has to make off a sale. If you have heard from others what they had to pay in commissions and it is putting you off, sit down with your preferred agent and tell them. You should be able to come to an agreement that benefits both parties.
Offers and Earnest Money
While you and your self-found buyer can agree on a price, without any sort of contract, the agreement is not binding and the buyer can walk anytime they want with no consequence, wasting your time and money. Agents have written agreements ready that are specifically written to meet state and local laws to help make offers legitimate and binding. Agents can also arrange to hold earnest money for the seller. This is a deposit of usually 1% to 2% of the home’s worth, collected from the buyer, that is held in a third-party escrow account to ensure the sale goes through. Once earnest money is collected, it is held until closing and if the buyer walks out on the deal, the seller gets to keep the earnest money.
Terms and Contingencies
Agents make sure that when the sale is complete, there is no question as to what is and is not included in the deal. They make sure that any additions to the property, such as leaving behind appliances or belongings, are all worked into the sale and clearly noted. They also ensure that both parties are aware of what is and isn’t expected to be fixed or replaced. They also have contacts in the industry to make sure you get a quality home inspector, mortgage processor, and any other third party required by the contract. Selling on your own could lead to legal headaches if these things are not covered and yet another reason why you need a real estate agent in many cases.
Even if you handle all the rest of the steps up until closing, there are many things needed on closing day that most people aren’t aware of. First, a clean title is needed. This is usually handled by an attorney that charges a fee for it. There are also many disclosures that need to be provided at closing. Depending on state laws, the age of the house, the type of sale, and much more, they vary home by home. If even one paper or disclosure is missed, it could leave you open to litigation. It is better to have someone who knows all the paperwork handle this to protect you.
The bottom line is while agent commissions can seem high, there is a lot that it covers. An experienced agent will make sure you get top dollar for your home and see to it that the sale is smooth and final.