Retail Sale

This is the most common way to sell your home and simply being on the Multiple Listing Service (MLS) will help give your home maximum exposure.   The most recent statistics show that over 80% of homes are sold using the MLS and with over 90% of buyers using the internet to start their search, this is a very valuable tool.

The downside to a retail sale is the real estate commissions.  Typically you will incur a 6% cost to sell your home. 3% goes to your listing agent to market, negotiate and sell your home and the other 3% goes to pay the agent who brings the buyer.   For homeowners who have little to no equity, this cost makes it difficult to price your home competitively and the home ends up being over-priced and doesn’t get traffic or offers.

Another thing to consider is that not all agents are created equal and the most important thing in real estate is experience.  Be picky about who you hire because your agent could save or cost you thousands of dollars.

When you see 1% listings or Flat fee listings, don’t forget that if a buyers agent brings you a buyer, you will still have to pay them, which turns that 1% listing into a 4% listing.

Of course, you can negotiate the commissions with your agent, but more often then not, you’ll get what you pay for.   If the agent doesn’t see a reimbursement coming for their marketing costs, they are not likely to spend their money marketing your home.  Plus, if your agent cannot justify why they are worth their commissions…how do you expect them to negotiate the best price for your home?

Other disadvantages to a retail sale is the time it takes to sell a home conventionally and having to keep your home in “show” condition during those months on the market.   Plus, you’ll have to factor in the holding costs that you will incur while you are waiting for the home to sell which include your monthly mortgage payments, utilities and home upkeep.