Do you need a real estate agent to sell your house?

By ,
Ask a Lender
January 4, 2018


Key Points

Pros and cons of using an agent to sell your house

  • Forgoing an agent saves you the cost of their commission.
  • New websites make it easy to list a house for sale yourself.
  • Agents may be able to command a higher price for your house, making up for commission cost.
  • Forgoing an agent means you’ll be responsible for the work of selling your home.
  • Even if you don’t hire a listing agent, you may have to pay a commission to the buyer’s agent.

If you’re selling your home, you want as much money for it as possible. One strategy for maximizing the proceeds of a home sale is selling the home yourself instead of using a listing agent to avoid having to pay an agent a commission.

Listing agents typically pocket about 3 percent of the sales price. Consequently, cutting the agent out of the process can save the seller a large amount of money — or so the logic goes.

A home sold directly by the owner is referred to as a home that is “for sale by owner” (FSBO). There’s no law that says you have to use a real estate agent to sell your home, and many sellers do successfully sell their homes FSBO.

Going the FSBO route, however, isn’t for everyone. Listing agents perform a variety of tasks necessary to successfully sell a home, and if you don’t use an agent, all those responsibilities fall on you. Is that extra effort worth avoiding an additional expense — and could forgoing an agent actually end up costing more money in the end?

Flying solo

Although doing without a listing agent will save you the cost of a commission, the benefits afforded by listing agents should be considered before deciding to go it alone.

For starters, if you don’t work with a listing agent, you’ll have to do all the work to sell your home, which could include taking photos of the property, listing and advertising the property, and showing it to potential buyers.

And although forgoing a listing agent could save you money in the short term, a good agent can actually get you more than enough money to make up for their commission. Real estate agents are often skilled negotiators, and there’s a good chance they can negotiate a higher selling price than you would be able to secure.

Since the housing crash and the introduction of new legislation regulating home sales, the process of buying or selling a home also has become more complicated. An agent can help you navigate the maze of paperwork that will result from selling your home, and help you avoid legal hang-ups as well.

On the other hand, it’s never been easier to sell a home yourself, thanks to the advent of new technologies. Numerous websites exist that allow owners to list their homes for sale, and many of these websites even give sellers access to the Multiple Listing Service (MLS), which is normally only available to licensed real estate agents and brokers.

Keep in mind, also, that even though you may be saving yourself a commission fee by selling a home yourself, if a potential buyer is represented by a buyer’s agent, you may still have to pay a fee to that agent. You could choose to work only with buyers who do not have an agent, but then you’re limiting the pool of potential borrowers and may have a tougher time selling your home.

Ultimately, the decision is up to you. Weight the potential savings against the extra work to determine what is best for your particular scenario.

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