We often work with brokers and agents, but sometimes it is works out best to work with a buyer direct to avoid having to pay a middle person.
And if you do work with an agent, you’ll often pay as much as 6% of the closing sale price in commissions and this is a pretty hefty amount of money. In some situations, these MI brokers and real estate agents can be very helpful and earn their commission. But this is not always the case.
There are a number of ways to not pay high commissions in a MI sale.
The first thing that you’ll be interested to know is that there is little caveat to these commissions that you’ll be paying if you use a real estate agent.
In the majority of sales in Detroit that use an agent, around half of all of the real estate commissions that you would pay when you close on the transaction as the seller, is going to be used to pay for the agent’s broker on the buyer’s side.
Does it really make a whole lot of sense?
So the buyer’s agent does all the work for the buyer but you are the one that has to pay for it.
Truthfully, it really doesn’t make much sense – but it is just typically what is done.
But now that you know this, you can take some things into consideration no matter if you’re trying to use a real estate agent or not.
- The best thing to do is to factor in the commissions that are going to have to be paid when you are looking at other sales in the area. If the sale price of the houses that are similar to yours included the commissions (and most do), you should really try to take that into consideration and factor that in to your price.
- Be sure not to underprice your home – some buyers might just expect a discounted price. And if you are doing the work of one of the typical agents in a real estate transaction, you should expect to be able to put that portion of the money in your pocket.
Often times in Detroit there are buyers who are not being represented by an agent. These buyers may not remember to try to reduce the price by the typical 2-3% that the buyer’s agent commission, so a tip is to not remind them. Not to say that it won’t come up but it may not and you might be able to save that from the negotiation and purchase price.
One option you could choose to do is consider offering 2.5% to the buyer’s agent who bring their clients to see the house. Sure, it’s not an insignificant amount of money and depending on the purchase price, it can be a lot. But you could price your property to include that commission, so you can always try to negotiate a better price for a purchaser who isn’t using an agent creating a win-win for both of you.
But, if you do not add in any price for the commission of the buyer’s agent, you may be cutting out most of the buyers in your particular market in Detroit like Warren, Sterling Heights, Roseville, Madison Heights, Hazel Park, and other surrounding cities.
Over 90% of transactions happen through the Multiple Listing Service (or MLS). If you don’t know what the MLS is, it’s the main database that all the brokers in Detroit use to access information for their clients on the houses, condos, land and investment properties for sale, along with data on the sold prices.
In the past you had to pay a full commission to get your property on the MLS. Now in Detroit, there are a few brokers who will charge you a fee just to list your property on the MLS. Often, you spend a few hundred bucks and you only pay commission if the sale closes.
Compared to the cost of a newspaper ad, the MLS is a cheap way to market your property to a very wide audience.
All the major real estate search sites like Realtor.com, Zillow, Yahoo Homes, Redfin, etc. get data from the MLS. Chances are good that when you submit your listing in Detroit to the MLS, information on your property will end up on most of the major sites within a few days.
Each of those sites sells ads. They’ve got packages that let you pay to enhance your listing, feature it at the top of the search, and a lot of other bells and whistles that might or might not get an interested buyer to buy your property.
Advertising is a gamble. Sometimes open houses in Detroit MI or other surrounding Metro Detroit cities can be a great way to sell property, and sometimes they’re a waste of time and money. Same with newspaper ads, craigslist postings, fancy signs – sometimes they work, and sometimes they don’t.
To effectively sell your property on your own, you have to market it very well.
Putting up fliers and signs around your neighborhood can generate some calls, and there’s a lot of free websites where you can post information. But often just putting up flyers and an open house isn’t enough if your house doesn’t appeal to the average home buyer. The curb appeal is a large portion of that marketing, which can cost hundreds of dollars or more to get it professionally done.
In theory, real estate agents charge big commissions because they have to spend a lot of money up front to advertise your property. By advertising lots of properties at once, they expect to get more phone calls – and obviously, they’ll make good profits by selling lots of houses.
Certain properties might require thousands of dollars in advertising expenses before the right buyer happens to see the ad and call.
If you want to avoid paying any commissions, you can also sell your house to investors like us for CASH
So if you’re asking “How do I sell my house without an agent?” Well we can help with that. We pay fair prices for properties – and we can close fast (in as little as 3-5 days if you need to).
Sometimes we’ll purchase Detroit houses, fix them up, then rent them out… sometimes we’ll fix them up and sell them to other people looking for great homes in the area, and a lot of other reasons, too – but we love to hear from people like you who are thinking of selling anywhere in MI.
We’re investors who care a lot about Detroit.
We close fast and pay cash in as little as just 3-5 days. Give us a call now at (586) 991-3363 or fill out the short form over here.