A retail sale is the most common way to sell your house. Simply being on the Multiple Listing Service (MLS) will help give your house maximum exposure.
Statistics show that 80% of houses are sold using the MLS, and 90% of buyers are using the Internet to start their search.
The downside of a retail sale are the real estate commissions. Typically, you will incur a 6% cost to sell your house. 3% goes to your listing agent to market, negotiate and sell your house. The other 3% goes to pay the agent who brings the buyer. For homeowners who have little to no equity, this 6% cost makes it difficult to price the house competitively.
How to Choose the Best Agent
You need to understand that not all agents are the same. Experience is the most important thing in real estate. Be picky about who you hire because your agent could save or cost you thousands of dollars. When you see 1% listings or flat fee listings, don’t forget that if a buyers agent brings you a buyer, you will still have to pay them, which turns that 1% listing into a 4% listing.
Of course, you can negotiate the commissions with your agent. More often than not, though, you’ll get what you pay for.
If the agent doesn’t see a reimbursement coming for their marketing costs, they are not likely to spend their money marketing your house for sale. Plus, if your agent cannot justify why they are worth their commissions, how do you expect them to negotiate the best price for your home?
The other disadvantage of a retail sale is the time it takes to sell a home conventionally. This means you will have to keep your house for sale in “show-ready” condition during those months on the market.
Plus, you’ll have to continue paying the holding costs that you will incur while you are waiting for the house to be sold. These costs include your:
- Monthly mortgage payments,
- House upkeep, and
- Taxes & insurance.