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MY MOM JUST SOLD her house. A few months ago, she interviewed three real estate agents. Each offered her a different opinion of how much her home was worth. All three also charged different commissions.
In the end, she selected the agent with the highest fee. I was skeptical when she told me her 1,100-square-foot home would be listed for $500,000. My mom’s house and mine are nearly identical in size, age, location and condition. They would easily be classified as comparable for appraisal purposes. Given that I’d purchased my home three years ago for $375,000, I found it unimaginable that values could have increased so much in such a short period of time.
I was also leery when my mom agreed to have her home professionally cleaned and staged. She spent nearly $3,000 preparing her home for sale before it had even spent a single day on the market. In my mind, I wondered if my mom was being overcharged for services that weren’t necessary and if her home would linger—unsold—for several weeks.
Those doubts were dealt with quickly. Within three days of being listed, my mom had five offers to sort through. They ranged from $500,000 to $580,000. She ultimately settled on an offer of $563,000 that included a stipulation that the buyer would pay for any lender-required repairs. The inspection, appraisal and closing all took place quickly and efficiently. My mom raved about the service she received from her real estate agent.
I’d always assumed that, when it came time for me to sell my home, I’d opt for the agent with the lowest fees. I also planned on staging the house myself, using a few pieces of my own furniture. But I’ve changed my mind. It’s now clear to me that the right agent can easily be worth the cost.
Of course, the unknown is whether there was any incremental financial benefit from using this particular agent vs another. Perhaps that Mom was ecstatic with the sale was benefit enough.
We were also very pleased with the service our professional realtor provided us two years ago. That said, I think commissions have been too high for too long and hope that the ongoing lawsuits and investigations will make real estate fees more open and competitive.
https://www.wsj.com/articles/realtors-face-federal-scrutiny-of-broker-commissions-11632135601
kristinehayes2014,
Great article! This article is exactly why I subscribe to Humble Dollar. It is well written and shares a personal experience. There are thousands of posts on the internet about how to sell a house, but very few that relate a personal experience. I wish you included even more details. Question: What were the commissions for the three agents? Why did they vary? Did your mother negotiate them lower? Any details would be appreciated.
In today’s red-hot real estate market, most anything will sell fairly quickly, even if its presentation is less than optimal. It’s also easy to underestimate a home’s value, when things are changing so rapidly. I’d guess that your mom’s home appeared as a polished jewel to buyers who were accustomed to less-than-ideal presentations, and your mom’s realtor was either very lucky, or very good at what she does (I know which one gets my vote).
Congrats to both of them on a job well-done. And I totally agree, a good realtor is nearly always a great investment.
Went through a home sale a few months back. I had not sold a home in 20 years so I was not sure of the value of professional staging and photography in maximizing value. I was very pleased with the outcome. My Realtor included all these services as part of her fee.
I like the idea of a ‘one fee’ for everything service. I know I underestimated what a difference professional staging and photography would make.
Good to hear. My son is a realtor and he tells me all the time how it makes a difference to use a good realtor.