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Does it make sense to hire a realtor?

If you hire a realtor to help you sell your house, most of them will charge you a commission between 5% and 6%. So, why do realtors charge so much?

  1. Services Provided: Realtors offer a range of services that can justify their fees, including market analysis to price the property correctly, marketing the property, negotiating with buyers or sellers, and navigating complex paperwork and legal requirements
  2. Expertise and Experience: Experienced realtors bring knowledge of the local market, negotiation skills, and expertise in handling various aspects of the buying and selling process, which can contribute to achieving a better outcome for their
  3. Time and Effort: Selling or buying a home is a time-consuming process. Realtors spend considerable time on tasks such as showing homes, communicating with potential buyers or sellers, and managing transactions. Their fees compensate for this time and effort
  4. Market Conditions: In a highly competitive market, a skilled realtor might help a seller achieve a higher sale price or help a buyer secure a property in a bidding war, potentially offsetting the cost of their fees.
  5. No Sale, No Fee: Typically, realtors only receive their commission if the transaction closes. This contingency-based fee structure means that if a realtor does not successfully complete a sale or purchase, they do not get
  6. Alternatives and Negotiability: There are alternative models to traditional realtor services, including flat-fee MLS listings, discount brokers, or for-sale-by-owner (FSBO) Some sellers negotiate lower commission rates, especially in high-value transactions or with agents who offer limited services.

In the real estate market, several models and companies offer lower-cost alternatives to traditional realtor services, often using technology or reduced-service options to lower costs for

sellers and buyers. Here are some notable types and examples:

Flat-Fee MLS Listing Services

These services charge a fixed fee to list your property on the Multiple Listing Service (MLS), which is the primary database real estate agents use to find properties for their clients. This option significantly reduces costs but requires the seller to handle many aspects of the sale process, including marketing, negotiations, and closing.

  • Redfin: Offers a lower listing fee compared to traditional brokerages, starting at 1% in some cases, with certain conditions.

 

  • Houzeo: Provides a platform for sellers to list their homes directly on the MLS for a flat fee, offering various packages based on service

Discount Brokerages

Discount brokerages offer full-service real estate assistance at a lower commission rate than traditional agents. They may operate with a leaner business model, often leveraging technology to reduce overhead costs.

  • Redfin: Apart from offering low listing fees for sellers, Redfin also provides rebates to buyers in some markets.
  • Clever Real Estate: Connects sellers with local real estate agents who offer full service for a lower commission, typically 1% if the seller also buys with Clever. 

Online Real Estate Companies

These companies use technology to streamline the buying and selling process, often offering savings through lower commissions or buyer rebates.

  • Zillow: a leading real estate and rental marketplace dedicated to empowering consumers with data, inspiration, and knowledge around the place they call home, and connecting them with the best local professionals who can help.
  • Opendoor: Offers to buy homes directly from sellers, aiming to provide a quick and straightforward selling process without the need for traditional listing

For Sale By Owner (FSBO) Platforms

Platforms that facilitate FSBO transactions help sellers market their property without a real estate agent, reducing or eliminating commission fees.

  • ForSaleByOwner.com: A well-known platform that provides resources and listing services for homeowners looking to sell their property without an agent.

If you are considering selling your home, call us at 303.697.3174 or email mallory@investps.com

The IPS team is more than happy to offer financial advice and guidance throughout the sales process to ensure that you get what you deserve.

Disclaimer

The information in this article should not be misconstrued as an offer, nor a solicitation, to buy or sell securities. Any past performance of any investment(s) does not necessarily indicate the future performance of any investment(s). No client, current or prospective, should assume the future performance of their investments will be profitable based on historical performance. Any backtest charts and data presented are purely hypothetical and do not represent the performance of accounts managed by IPS Strategic Capital. The results were obtained by applying a rules-based investment process to historical data. All investments have the potential for profit and the potential risk of loss. Changes in investment strategies, contributions, or withdrawals may cause the performance results of one’s portfolio to differ materially from the reported composite performance. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will either be suitable or profitable for a client’s portfolio. One should always consult an investment advisor before making any investment decisions.

One should always consult an investment advisor before making any investment decisions as well as consider the investment’s objectives, risks, charges, and expenses carefully before investing or sending money. This and other important information about the strategy is available upon request.