Is Ditching the Listing Agent Risky?
Dear Monty: My home is for sale through an agent. It has been over 12 weeks with no offers and few showings. A buyer with no agent has contacted me about selling directly to them. Can I do a private sale?
Monty's Answer: Yes, you can, but there are considerations about how to proceed.
No. 1: The most crucial consideration is the term of your listing agreement with your agent. Most listing agreements give the agent exclusive right to sell, meaning they are entitled to their commission regardless of who finds the buyer. These agreements often prohibit the seller from negotiating directly with buyers.
No. 2: By circumventing your agent, you might be breaching your contractual obligations. This step could lead to legal consequences, so speak with an attorney about canceling the contract.
No. 3: Your former agent may suggest dual agency, which is legal in most states. Do not agree to dual agency. Dual agency creates a conflict of interest for both buyer and seller.
No. 4: Ensure you're clear of any contractual obligations to your former agent.
Reassess your home's value and market position.
Make any necessary improvements or address feedback from previous showings.
Develop a marketing strategy for selling without an agent.
No. 5: Some agreements have an exclusivity clause that prevents you from selling the property yourself or with another agent for a certain period. This is another point to discuss with your attorney.
No. 6: Home sales involve numerous legal and procedural steps. Without an agent, you'll need to navigate these yourself. If you are not comfortable, gain insights from someone you know who recently sold on their own.
No. 7: A buyer approaching you might also be trying to save on agent fees. Don't give the commission to the buyer. Sell at fair market value, which is a range of value. Where you price your home in the range depends on your circumstances.
No. 8: If you are dissatisfied with your agent's performance, consider discussing your concerns with their broker. Some companies have procedures for addressing client concerns, one of which is assigning a different agent.
No. 9: The rules that have complicated home sales are for real estate agents. When a seller and a buyer connect directly without agents, 98% of the industry rules do not apply. This simplification removes most of the confusion, delay and stress in agent-related home sales. When the seller and buyer understand they have a common goal -- a simple home sale -- it is the key to a successful sale.
No. 10: Forbes Advisor states that the median home value in the U.S was $412,000 in 2023. A 6% commission is $24,720. No commission transactions make achieving the common goal far less complex and far easier.
No. 11: The real estate industry has turned a simple transaction into a complicated one. Here are some links to help you learn how to sell direct: a) http://tinyurl.com/ykwrbw56 (Redfin) b) tinyurl.com/yzmnv2em (GIS map) c) https://zillow.com/for-sale-by-owner
You can sell your home on your own after an unsuccessful listing. It's important to understand your contractual obligations and market conditions and to learn that selling without an agent is easy. Take 30-90 days to learn how successful FSBOs sell safely and effectively. Going FSBO is less risky than using the listing and selling agent.
Richard Montgomery is a syndicated columnist, published author, retired real estate executive, serial entrepreneur and the founder of DearMonty.com and PropBox, Inc. He provides consumers with options to real estate issues. Follow him on Twitter (X) @dearmonty or DearMonty.com.
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