Real estate commissions usually fall between 3%-6% of your home’s sale price, and commercial property can be even higher. With that in mind, it’s tempting to skip the middleman and try to sell your property on your own.
In the United States, you don’t have to be a licensed real estate agent to sell property if:
- you work for a builder as a non-commissioned employee
- you own the property you wish to sell
Private Real Estate Sales
It’s completely legal to sell property that you own. About 8% of homes sold in 2020, in the U.S. were FSBO (For Sale by Owner).
If you are comfortable with contracts, advertising, and a certain level of risk, you may be able to save the 5% or 6% that would normally go to real estate commissions on either side of the transaction. If you already have an interested buyer, a private transaction makes even more sense.
For Sale by Owner
While everyone likes the idea of saving money, not everyone is comfortable with a Do-it-Yourself approach. Property owners may also reach out to FSBO companies to help facilitate their sale.
Businesses like The Property Guys generally charge a flat fee, whether the property sells or not. Depending on the package you choose, the company may offer Multiple Listing Service listings, lockbox services, showing assistance, and paperwork support. Some of these services will come at an additional cost and there could be risks involved.
Using an Agent Has Benefits
The real estate process can be intimidating and confusing, especially if you’ve never been through it before. Many people prefer to have the guidance of a professional who already has the necessary systems in place. There are some big advantages to using a real estate professional to support you when selling a property:
- Higher Sale Price – Many people choose private sales or FSBO companies because they believe they will save money, but this isn’t always the case. According to the National Association of REALTORS®, there can be a significant difference in purchase price between REALTOR®-assisted sales and FSBO sales. In 2020, for example, a typical FSBO home garnered $217,900 compared to $295,000 with a real estate agent. Additionally, FSBO listings typically take longer to sell.
- Knowledge & Experience – A practicing real estate agent understands the industry, knows the community, and studies current market values and trends. They have working knowledge of contracts and legal issues that may occur so they can easily guide clients through paperwork that can otherwise be overwhelming.
- Professional Advice – Additionally, realtors can advise clients on pricing strategies, updates and renovations that will provide the best return on investment, home staging, and preparing a property for sale. They often have large networks so they can put sellers in touch with other professionals related to the sale, such as mortgage agents, real estate lawyers, and local contractors.
- Listing Marketing Strategy – Private sellers can advertise their property in many places online, but only licensed agents and brokers have access to Realtor.com. Most real estate agents also have local and regional advertising and social media marketing strategies in place, so buyers and buyer agents are more likely to view their listings online. Real estate agents are more likely to locate and show properties listed by other agents than FSBO properties.
Becoming a Real Estate Agent
If earning commission as a real estate agent interests you, Agent Real Estate Schools have the courses you need to earn your license. Choose from two different programs to meet your individual learning needs.
Independent learners will love the standard, self-paced, online Fast Track program while those who prefer an interactive, lecture-style format can choose virtual or in-person Group Study sessions. Both options include a 1-Day Prep class to make sure you’re prepared for the California state licensing exam, and we also offer 1:1 Tutoring packages.
More questions? Sign up for an upcoming Career Day event today.