- The Difference between a Listing Agent and Selling Agent
- The Benefits of Using a Realtor to Sell Your Home
- Understanding Realtor Rates for Selling a House
- The Qualities of a Good Listing Agent
- Common Home Selling Misconceptions: Debunking the Myths
- Do You Need a Realtor to Sell a House?
- About Walter Ehrhardt
- Other Articles You Might Be Interested In
Greater Houston is a hot housing market this year with an influx of new buyers in search of larger living spaces in suburban developments and a home construction boom to meet the demand. Local Realtors are reporting fewer days on the market with move-in ready homes going under contract in as little as three to five days. Sellers can take advantage of the home buying frenzy to make a tidy profit from the quick sale of their home.
But there are challenges. It takes months or years to get your home ready to sell. To get the best offers, you need to make repairs and improvements that can make your home more appealing to buyers who are constantly comparing their options in the market. There’s also the matter of staging and marketing your home. And when it comes time to vet offers and negotiate the terms of the sale, you’ll need the guidance of a professional who can protect your interests.
Few sellers think of timing the sale of their home with the purchase of a new one. If you’re looking for a new home while selling your current one, you’ll need to use your time and energy wisely.
Here’s why you should consider working with a real estate agent when selling in The Woodlands, TX.
The Difference between a Listing Agent and Selling Agent
But first, what’s the difference between a listing and selling agent? Familiarizing yourself with the services they provide will help you determine how to choose the right agent for your needs.
In simple terms, listing agents help sellers price, market and sell their homes while selling agents help buyers find the right properties, make offers, and negotiate the best terms.
The confusion stems from the fact that listing agents are also called seller’s agents since they go beyond listing the homeowner’s property and putting up a For Sale sign. They also represent homeowners in each step of the selling process, including vetting offers, negotiating terms, closing the deal, processing paperwork, and handing the keys to a buyer.
As real estate professionals, listing agents bring knowledge and experience that helps them determine when to list a home, the best way to market it, and how to set the asking price in order to maximize profits while shortening its time on the market.
In most instances, a seller will sign an exclusive right-to-sell listing agreement with a listing granting them and their brokerage exclusive rights to the sales commission. The listing agent will then take on a fiduciary duty, or the legal responsibility of representing their interests, offering their expertise to ensure the successful sale of their home.
Their roles and responsibilities include:
- Listing the property on the MLS and other listing platforms
- Setting the asking price based on market data
- Staging and advertising the property
- Scheduling home showings
- Negotiating the contingencies, and conditions of the sale
- Processing the closing paperwork
A selling agent, on the other hand, is also referred to as a buyer’s agent, or the agent representing the buyer in a transaction. In strict terms, a buyer’s agent can only be called a selling agent after the sales contract has been signed.
The selling agent’s job is to bring a buyer, or their client, into the transaction. Upon signing a buyer agency contract with the client, the selling agent will have a fiduciary duty to the buyer, disclosing important information and negotiating the best sales price.
Their roles and responsibilities include:
- Finding homes that meet the buyer’s criteria
- Scheduling viewings for the buyer
- Helping buyers secure financing
- Negotiating the price and terms of the sale
- Processing the closing paperwork
In some instances, the listing agent can also be a selling agent, working with both the buyer and seller to close the deal. This is referred to as dual representation or dual agency.
Although this practice is legal and widely accepted in some states, be aware that Texas laws don’t permit dual agency. This means that a broker is not permitted to represent both clients as a dual agent.
The Texas Real Estate Commission also provides that if a dual agency relationship comes about by accident, the broker or agent must resolve the issue and act as an intermediary, or represent only one of the clients.
An intermediary is a broker who negotiates the transaction between the buyer and seller while a dual agent is a broker who represents both parties.
If the broker wishes to act as an intermediary between the buyer and seller in the same transaction, both parties should be made aware of the fact and sign a written agreement. The broker must make a written disclosure or statement defining the different types of agency relationships.
The Benefits of Using a Realtor to Sell Your Home
A Realtor works full-time to sell your home
Selling a home is a 24/7 job. A Realtor will take charge of your listing and manage the sale of your home on a full-time basis, making themselves available to answer queries and entertain potential buyers. In other words, working with a Realtor lets you have a life while you wait for your home to sell.
They have access to a large professional network
Realtors spend years cultivating professional relationships with clients, lenders, vendors, and other agents to help bring the largest pool of potential buyers to your home.
With access to other professionals, Realtors can help you find the best vendors, stagers, cleaners, and contractors to help get your home ready to sell. They can also tap real estate photographers and videographers who can produce high-quality marketing collateral for your listing.
This saves you time and energy assembling a team to help you prepare your home for a sale. You can also be sure that your Realtor’s contacts are accredited and licensed professionals who’ve been in the industry for years.
They can qualify buyers
To streamline the process, a Realtor will take measures to identify qualified buyers while keeping out individuals who don’t have the means or genuine interest in buying your home.
They do this by asking potential buyers qualifying questions to gauge their motivations and financial capacity.
Some of these qualifying questions include:
- How long have they been looking for a home?
- Are they paying cash or have they been prequalified for a mortgage?
- What kind of schools are they looking for?
A trained Realtor can quickly move a qualified and motivated buyer to the point of purchase. For Sale By Owner (FSBO) sellers often lack this kind of skill and training, so they’re more likely to waste time entertaining buyers who aren’t financially capable or serious about closing the sale.
Another benefit of pre qualifying buyers? Safety and privacy. The screening process allows Realtors to weed out sketchy leads who are just trying to get into your home.
They can help you stay out of sight
Ideally, the homeowner shouldn’t be present during the home showing. Buyers might feel uncomfortable about asking direct questions about the property and the sales price in your presence. They might also worry that they’re intruding upon your space and inconveniencing you. As a result, they might rush through their viewing appointment, unable to take a good look at the home.
A Realtor can show your home and answer any questions the buyer might have about the property. When the home is unoccupied, buyers can take their time and enjoy the tour, making it easier for them to appreciate the beauty of the property.
They know how to negotiate a home sale
Experienced Realtors will have negotiated dozens or hundreds of home sales. They’ll know when to push and when to step back during negotiation while being civil with the buyer and their representative. They can also spot nervous or disingenuous buyers and know how to use that to your advantage. But more importantly, they can remain objective and professional during negotiations no matter how heated it gets.
They can sell your home for a higher amount
There’s a reason why fewer sellers go the FSBO route. According to recent data from the National Association of Realtors (NAR), FSBO sales result in a lower median price ($217,900) than agent-assisted home sales ($295,000). Aside from the higher median sales prices, agent-assisted home sales allow sellers to save time and energy on DIY staging and marketing.
They can minimize your exposure to legal risks
Real estate transactions are complex and high-stakes deals that involve plenty of paperwork. These transactions are governed by strict laws and procedures, putting sellers at risk of legal claims and action following the sale.
One of the most important documents is the Seller’s Disclosures, in which the seller must disclose material facts that affect the value or desirability of the property. The smallest oversight can put the seller at risk of being sued for negligence, fraud, or breach of contract.
Realtors and real estate attorneys are knowledgeable on disclosure laws and other legalities that can affect the sale of your home. They can offer professional guidance and reduce your exposure to legal risks.
Moreover, licensed real estate agents typically have professional errors and omissions insurance that protect them from such claims and give buyers recourse so that the buyer may not pursue you for damages in the worst case scenario.
They can help you stay grounded
Selling a home is often an emotional process, especially if you’ve lived on the property for a very long time. You may also be forced to sell your home under stressful and emotionally-charged circumstances, such as a divorce, redundancy, death of a loved one, or retirement.
Working with a Realtor keeps you one step removed from the transaction. This helps you stay detached from the process and focus on what comes after the sale, whether that’s finding a new home, going back to the dating pool, or getting ready for retirement. Your Realtor can offer support during this difficult and stressful time.
Understanding Realtor Rates for Selling a House
One of the main reasons sellers choose FSBO is commission. They want to save on agent’s fees and commission so they can pocket more of the profit from the sale.
But this isn’t always the case – sellers who are unable to sell FSBO end up working with an agent a few weeks or months down the line and end up paying commission. Sellers who lack marketing or negotiation skills can also lose out on profit due to price reductions or poor haggling.
Developing a good understanding of how listing agents get paid can help you decide whether or not professional representation is right for you.
The majority of real estate transactions take place under exclusive representation listing contracts between the seller and their listing agent. When you sign an exclusive right-to-sell listing, only your listing agent or their brokerage is entitled to a sales commission. The commission is shared between the brokerage and agent.
Your listing agent may also charge a small fee for listing your property and performing clerk services related to the transaction.
The exact amount varies per agent or brokerage. Some agents may charge a higher fee commensurate with their experience level. They may also charge more if they work in a high-end market or if they work with a very specific property type or real estate clientele.
The average real estate commission in Texas is 6% of the property’s sales price. For example, if you sell your home for $300,000, your listing agent will take 6% and collect $18,000 at closing.
Experienced agents and luxury real estate experts can earn anywhere from 7% or more for their work.
You’ll also find some low-commission agents in the state who will list your property for as little as 1% commission without compromising service quality. It’s also fair to say that the buyer also contributes to your listing agent’s way in an indirect manner as this is often factored into the price they’re paying for the home during pricing and negotiations.
The Qualities of a Good Listing Agent
Now that you understand the value of working with a listing agent, you need to know how to choose the right representation. Working with top realtors in Woodlands, TX can help you save time while maximizing profitability. Here are some important qualities to look for in a listing agent:
- Qualifications – Only work with a listing agent who is licensed in Texas. To qualify as a real estate agent in the Lone Star State, applicants must meet the minimum requirements and ethical standards set by the Texas Real Estate Commission (TREC). They must also complete 180 hours of training and pass the licensure exam.
- Experience – How long has your listing agent been in business? There’s simply no substitute for experience, especially when it comes to a complex and dynamic industry like real estate. Ask them how many years they’ve been working as a listing agent in Texas and whether they’ve handled similar transactions in your price range and market.
- Pricing – Only a trained and experience listing agent will know how to price a home accurately. You’ll know you’re working with one if they provide realistic price estimates based on relevant market data. Don’t choose a listing agent who gives you highest price estimate as this is a common tactic of enticing clients to sign contracts. Instead, choose someone who can back their claims with supporting data.
- Expertise – Does your listing agent have experience selling homes in your neighborhood and price range? Do they know how to stage and market the type of property you’re selling? To gauge their expertise, take a look at previous transactions and testimonials from past clients.
- Availability – Are they doing this full-time? Is your listing agent available to take calls and respond to messages right away? You might not get the same results with a listing agent who is only working part-time. They need to make themselves available and put in all the hours need to make the sale successful.
- Communicativeness – With so many variables at play, it’s important to work with a listing agent who is proactive when it comes to communicating any issues or developments that arise. They should also have the soft skills needed to deliver news, negotiate terms, and handle conflict with tact and confidence.
- Openness and transparency – Trust is essential to any business relationship, and the same is true for sellers and their agents. Your listing agent should be forthcoming with all information relating to the sale of your property. They should also communicate any setbacks they might encounter with the sale.
- Connections – Choose a listing agent who works with an established brokerage. This gives them the resources needed to promote and sell your home. A well-connected agent can provide access to reputable vendors, stagers, and other professionals who can assist with the sale.
Common Home Selling Misconceptions: Debunking the Myths
Myth#1: FSBO allows sellers to save on commission and make more money from the sale
Not always. Unless you’re highly experienced when it comes to staging, market analysis, advertising, and negotiations, there’s a chance that you will price your home incorrectly, which can cause you to lose money as a result of price reductions or selling your home for less than its market value.
You can also end up wasting precious time and energy facilitating the sale of your home, which takes you away from work, business, and other income generating activities.
A Realtor can save you money by helping avoid costly mistakes and legal action that can arise from a poorly managed home sale. They can also save you time by taking charge of staging, home viewings, paperwork, and negotiations.
Myth#2: Pricing my home higher than market value gives me more elbow room for price negotiations.
Although this is a common tactic, sellers should proceed with caution, especially if they’re doing FSBO. First-time homebuyers might not be aware of this strategy and struggle to understand why your home is more expensive than comparable properties in the area. If the price is inflated and falls outside their budget, they might not even schedule a viewing appointment, much less negotiate.
An incorrectly priced home is also more likely to sit on the market for much longer, which can force you to slash prices later on.
No matter your sales strategy, it’s important to base your asking price on recent housing market data. Keep in mind that most buyers start the home search online, which gives them the opportunity to compare home prices in the area and decide which ones are worth the money.
A Realtor can perform a comparative market analysis (CMA) and discuss the best strategy for selling your home based on market temperature, real estate trends, and other variables.
Myth#3: My home will be ready to show after I clean and declutter.
While general cleaning and decluttering are important steps to getting your home ready to show, you might need to take extra measures to make your property more appealing to buyers. These include basic repairs and improvements to help you attract the best offers for your home.
An agent can go through your home and identify areas that could use some improvements. They can also recommend a professional stager to maximize your home’s potential.
Do You Need a Realtor to Sell a House?
Yes, the services of a Realtor are indispensable when it comes to selling your home. With so many variables affecting the sale of your home, a real estate professional can step in and make the process more predictable. But more importantly, they can protect your best interests by negotiating the terms of the sale and reducing legal risk.
A sales commission is a small price to pay for a smooth and successful transaction. An experienced Realtor can help you turn your focus on what comes after the sale – finding your next home, starting a new career, or meeting new people.
About Walter Ehrhardt
If you’re ready to list your home, get in touch with one of the top Realtors in Woodlands, TX. Contact me, Walter Ehrhardt, at 832.599.5757 or Walter(dotted)Ehrhardt(at)gmail(dotted)com to get started.
With seven years of experience as a Realtor, I’m also a former lawyer and partner of a CPA firm with a background in luxury sales, taxation, and real estate regulations. As a local expert on The Woodlands, TX real estate, I can help you market your property for the best outcome.
I can also offer advice on renovations, additions, and construction as an active board member of the Village Association and Design Review Committee.
If you have any concerns about listing and selling your home in this prestigious community, I’ll be here to answer questions and come up with sound strategies to ensure a successful sale.