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>I said "good riddance" to the agents and did an MLS self-list for like $400. [...] So back to my original point -- where is that seller value coming from? It
by jasode 3y ago
>I said "good riddance" to the agents and did an MLS self-list for like $400. [...] So back to my original point -- where is that seller value coming from?
It's a puzzle to you because you had the personality & motivation to do the work of marketing+showing+negotiating the house yourself. You have inadvertently projected your DIY savvy onto other homeowners to do the same thing. But, a lot of home sellers don't want to DIY a home listing.
- some homeowners don't want to deal directly with potential buyers (pre-qualify buyer's bank financials, show them around the property, etc). Some homeowners are uncomfortable wearing a "salesmen" hat.
- some homeowners are not savvy about how to present and market their home. Sure there are endless books and youtube videos on jazzing up "curb appeal" but some people simply want a "professional" to advise them.
- some homeowners feel uncomfortable with legal aspects and even hiring an attorney specializing in real estate feels "weird". It's just more "normal and easier" to use a real estate agent.
Analogous situation in people selling things on ebay. What's the value in a service like iSoldIt[1] charging a commission for ebaying on sellers behalf when the seller can save money by DIY by taking own photos, using ebay website to upload the photos and list the item, and then pack & ship the item themselves?!? The value is that some people don't want to DIY certain tasks. I had a friend sell his camera via iSoldIt. I sell stuff myself on ebay all the time and thought he was crazy for paying the iSoldIt commission. He was a young programmer so he's not an old grandfather that would find ebay's website intimidating. He simply didn't want to deal with the whole ebay workflow and wanted some cash as quickly as possible. Consider that ebaying a camera is way simpler than selling a house and yet some still offload it to a service to handle it for them.
EDIT to replies:
>, but I don't think most people would be willing to spend 12k just to be more comfortable,
>Agents provide value. [...] Do agents provide tens of thousands of dollars of value?
To be clear, I wasn't trying to justify their 6% commission rate. I was explaining why most homeowners don't go the DIY route to save money which seemed more "logical" to the gp.
For decades, I saw endless commercials on tv for FSBO (For Sale Buy Owner) services trying to educate viewers on "don't pay seller commissions and pocket the thousands in savings yourself!" And yet, real estate agents persist. People are already aware of "selling by owner"; they just don't want to do it and would rather pay a commission.
[1] https://www.i-soldit.com/how-it-works/ https://www.i-soldit.com/how-it-works/
- Amezarak 3y agoEverything you're saying is true to some degree, but I don't think most people would be willing to spend 12k just to be more comfortable, if they understood that's really all they're paying for and understood clearly upfront that's how much they're paying. It's sort of analogous to the American tax situation - many, many people I've talked to refuse to do their own taxes (even a very simple 100EZ) - or even use software to do it - because they've been convinced culturally that filing taxes is so incredibly complex and if they screw up they're going to be severely punished, so instead they pay an accountant a few hundred bucks to file a 1040EZ and get their tax refund - which they don't really feel because they just take it out of the refund.
- cyanydeez 3y agoI pay an accountant for the insurance of someone who knows what documents I have and can do whatever s necessary is the event of an audit. if you do have complicated forms, that annual service compounds in value. I'm sure if I moved up tax brackets, the accountant would start providing specific feedback on minimizing exposure.
- jacobsimon 3y agoNot OP but I think both perspectives are valid. Real estate agents are not incentivized to increase your house price at the margin as much as the owner, they would rather just keep their fee high and sell your house at an ok price. Maybe real estate agents should structure their commission more like M&A bankers and account executives, which often have tiered or ramped fees that encourage the best prices, e.g. if the selling price is below X you get 5%, everything above X you get 10%, etc
- codedokode 3y agoAgents want to close the deal as soon as possible so I assume they will try every trick to persuade the onwer to set the price below the average. Or am I wrong?
- UncleMeat 3y agoAgents provide value. They do things that many homeowners can't or don't want to do. My electrician also does that. Do agents provide tens of thousands of dollars of value?