Dave,
I’m am going to sell my home by owner this spring and I am willing to cooperate with agents who want to show it to their buyers. One of my friends told me that agents would not show it without offering “agent protection” and I am not exactly sure how that will work or what it means. If I sell my home to a buyer with a realtor, do I still have to pay the typical agent commission? I know I am asking a real estate agent for advice on selling on my own, however I am confident you will shoot me straight. Thanks for your advice.
Jody, Grand Junction
Jody,
There is one thing I can guarantee, I will always shoot you straight! I think it is great that you are going to try to sell your home by owner! Selling by owner is not for everyone, however it is an option for many and some are successful. According to the National Association of Realtors, 8% of all home sales were by owner and the success rate for by owner properties is 20%. So the success rate is not high, however you never know till you give it a whirl. So you have decided to go by owner, how can you incorporate real estate agents to increase your success rate?
I am confident what your friend meant by “agent protection” was simply referring to your willingness or lack thereof to cooperate with real estate agents in paying a commission. Let's face it, real estate agents are in the business of selling houses and they generally try to sell the homes that offer to pay them a commission if their buyer ends up purchasing the property. You need to decide what commission you are willing to pay and then let the agents know what that is and agree to offer them some kind of assurance that if their buyer purchases, you will cooperate with an agreed upon commission. If you are willing to cooperate, then offer to sign a commission agreement or proactively provide them with an agent commission form that identifies what percentage or flat fee you are willing to pay and allow them to sign it for their buyer. This will protect the agent and probably substantially increase your chances of getting Realtor cooperation! One way I have seen this successfully done is to deliver fliers to the real estate offices and have curbside fliers that openly advertise your willingness to cooperate with paying a real estate commission.
As far as the amount of commission to be paid, you can negotiate this with each agent individually or just figure what amount you are willing to pay and advertise that rate. More often than not the real estate commission is at or close to 3%, but there is nothing set in stone and it is completely up to you!
Remember, the more you embrace the Realtors, the more cooperation you will get from them. Trust me, word travels quickly about those for sale by owners that are not cooperative or who are abrasive in their dealings with local agents. Bottom line, remember you generally get back what you give! Best of luck on selling your home by owner and If you are not successful, I know a good agent that would be happy to help you out!
Dave Kimbrough
The Kimbrough Team
