Technology, as well as business models, is changing how the real estate game is played. Think about all the empowerment that has been transferred to the consumers in a lot of areas. Same goes with selling your real estate property. Working with a trusted, professional real estate broker or agent is no longer the only option for people who wants to sell their homes.
In this article, we will discuss the full accounting of what has changed in the housing industry, particularly in the for-sale-by-owner world that has made commission-free real estate a good option and why you need to think about considering for-sale-by-owner option, thanks to the evolution in today’s technology that has created a full-blown revolution in the real estate industry.
Conventional real estate transactions
If you own, rented or bought a house, you are familiar with the conventional real estate transaction: in exchange for the agent or the broker’s services (they will show your home and market them to potential buyers, negotiate the best price possible and do all the paperwork for you) you will pay a certain amount or a commission.
The commission of these agents and brokers depends on whether you are selling, renting or buying. But usually, the commission fee is more or less 5% of every real estate sale. When the owner of the house is trying to get the best possible price for their property so that they will have enough money to pay for another home equity, watching 5% to 6% of the total selling price disappear out of your pocket is pretty hard to take.Even if the agent or the broker did an excellent job marketing your house and you realize that they need to make a living too, it is still very hard to accept the news that someone is getting 5% or 6% of your money. A lot of homeowners who hired a broker or a real estate agent concluded after their house was sold that they could have done what the broker or the agent did, probably much better. That is why for people who are planning to hire one, you need to ask yourself if you really need a broker or agent to sell your property.
FSBA or for-sale-by-owner issues
There are reasons why the market for for-sale-by-owner or FSBO is starting to gain popularity in today’s housing industry. But before the technology changed, homeowners are struggling to sell their properties quickly. The reason was the lack of access to the tools that most brokers and agents are using like the listing services. Instead, a lot of owners had to rely on traditional ads like the newspapers, television, radio, flyers and trusted sign in the yard.
Those forms of traditional advertising are usually good-if-you-are-lucky kind of approach. It might or might not work depending on the price of your home, the design, or if the ads will catch the potential buyer’s eye. Another problem with FSBA was how to gain people’s trust.
Most buyers usually ask the help of a real estate agent or brokers because they know these people had all the experience needed when it comes to the market and could help them with the paperwork. Not only that, agents and brokers can help buyers solve any housing-related problems including closing the deal.
Even if the buyer’s do not like giving big commissions, they are sure and confident that the transaction will go as smoothly as possible, compared to dealing with the seller directly. It is the same as the rental property market. It is difficult for the landlords to look for a new tenant and establish the needed trust for a successful tenant-landlord relationship.
That is why they ask the help of brokers and agents to look for a possible tenant for their properties. Because of these reasons, the rental market has been dominated by brokers and real estate agents for a long time. These agents and brokers worked as a property manager and continued to take a commission even if the deal is already completed months or years ago.
That is why it is essential to know all the important processes involved in buying, selling or renting a property. Not because you want to be an agent or a broker yourself, but to be prepared in case you plan to buy a property, sell or rent out your real estate you know what to do and avoid giving commissions to other people. You can save a lot of money that you can use in paying the equity of your new home.