A retail sale is the most common way to sell your home. Simply being on the Multiple Listing Service (MLS) will help give your home maximum exposure.
Statistics show that 80% of homes are sold using the MLS, and 90% of buyers are using the internet to start their search.
The downside to a retail sale are the real estate commissions. Typically, you will incur a 6% cost to sell your home. 3% goes to your listing agent to market, negotiate and sell your home. 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 your home competitively.
You need to understand that not all agents are NOT created equal. 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 then 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 home. 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 to a retail sale is the time it takes to sell a home conventionally. This means you will have to keep your home 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 home to sell. These costs include your monthly mortgage payments, utilities, home upkeep, and taxes & insurance.