Whether you’re selling an investment property you’ve held for a while or recently completed a house flip and are looking to find a buyer, now’s a really good time to put a home on the market. Home values have risen at their fastest rate in two years, reports CoreLogic (NYSE: CLGX), with home prices climbing 5.9% in August compared to a year prior.
Why the jump? Much of it has to do with low supply and high demand. For August, Zillow (NASDAQ: Z) (NASDAQ: ZG) reported housing inventory was 29.4% lower than it was a year ago.
Clearly, all this gives sellers an upper hand, which begs the question: At a time when the housing market is so hot, does it pay to hire a real estate agent to help you sell a home? Or are you better off saving money on fees and going through the process alone?
The upside of forgoing a real estate agent
Real estate agents typically charge a 5% to 6% commission for the homes they sell. As an investor or house flipper, saving that money could benefit you in many ways — namely, freeing up money for your next investment or project or buying you more financial breathing room. And that’s a good reason to skip the real estate agent right now.
Furthermore, virtual home tours are growing in popularity during the pandemic. If you’re able to hire a professional photographer or videographer to put together a detailed tour of your property (which you may need to do even if you hire a real estate agent), you may find it virtually sells itself and you don’t really need an agent’s help to market it.
The downside of forgoing a real estate agent
While saving money on a real estate agent’s fee may be nice, don’t forget these agents put a lot of work into selling homes. Not only do they list and market them, but they’ll often get involved in the staging process to attract buyers.
A real estate agent could also help you score a higher price for your home. For example, someone who knows the local market really well could help come up with just the right asking price to inspire a bidding war. Bidding wars are a nightmare for buyers, but as a seller, having a property that’s subject to one could work out quite well financially.
Also, remember that real estate agents take care of all the logistics involved in selling your home, like scheduling showings and dealing with prospective buyers. If you’re managing a lot of projects and don’t have time for this, you may find you need a real estate agent to handle those details.
What’s the right call for you?
If you choose not to hire a real estate agent right now, you’ll probably still snag a price for your property you’re happy with. The reality is that inventory is so low that buyers are making major concessions to snag properties and capitalize on today’s enticing mortgage rates. You probably don’t need a real estate agent to help you find a buyer, and if you know the local market well, you may not need help pricing your property accordingly.
On the other hand, if you don’t have the time or patience to oversee the sale of your home, then hiring a real estate agent could be more than worthwhile. And you may be in a position to negotiate a better fee than what you’d normally pay, thereby minimizing the financial hit involved.
The bottom line
Ultimately, there’s no right or wrong answer, and your choice of whether to hire a real estate agent to sell your home should depend on your local market, how familiar you are with it, and how confident you feel about the idea of selling a home without professional support.