A couple of months ago, I was asked if it was worth getting a real estate license to sell your own house. The short answer? NO!
This person's theory was they had a $500k house and commissions would be upwards of $30,000. What this person wasn't thinking about was that fee is, in some way, split with a buyer's agent who brings a buyer to her, so say that number goes to $15,000.
Now, to get licensed, you have to spend about $1000 to take the courses for the licensing exam. You have to spend a couple more just to register to take the exam. Many people fail the first time (I didn't), and you have to repay those fees to take the exam again.
Then, once you join a brokerage, you have to join the National Association of Realtors, the Texas Association of Realtors, and the Austin Board of Realtors. All these memberships will cost about another $1000. Oh, don't forget there might be brokerage fees with whatever office you join.
Then, once you're a member of all these associations, you need to obtain MLS access in order to list your property. You'll need to obtain a Supra Key in addition to a Supra Lockbox. Our dues are about $450k a quarter. Each lockbox is $96 and some change.
Did you want a yard sign for your house? Did you want to hand out a business card to anyone so you could try to sell the house to a buyer also, and maybe save the additional $15k we talked about? Did you want to pay for any marketing or advertising for your listing?
So, you sell your house and you don't represent the buyer, so you couldn't save the extra $15,000. The commission is paid to your broker. Let's say it took 3 months to get a buyer and then close. You are either with a broker who charges a desk fee of about $1000 a month with a 95% take home OR you're with a broker who charges minimal monthly dues, but takes 30% of your money. (Yes, there are many models, but I'm just using 2 as an example.)
$15,000- $1000 for 3 months - 5% split out - errors and ommisions insurance= roughly $11,000 take home
$15,000- minimal monthly charges - 30% split out - errors and ommisions insurance= roughly $10,000 take home
Now, subtract all the fees I mentioned above... they equal about $3500 (not including your marketing and advertising because who knows how much you'll spend on all that)
In the end, this person might save $6500-7500. This is no where near the $30,000 she thought she would save. But also, what if the house doesn't close in the 90 days I calculated for? Each month, it's more and more fees and marketing expenses.
In the end, what is the time with your family valued at? If you spent weeks preparing to get your real estate license and not spending that time with your family, how much is that time worth?
The short answer is NO, and the long answer is also NO. If you're looking to save money with selling your house, hire a professional who has the experience to get it sold quickly and for the highest dollar. That's the only place you'll save money. Hiring someone who is medeocre, but charging less, is also going to net you less in the end.
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Copyright© 2013 By Donna Harris, All Rights Reserved. You may re-blog with links back to this post.
*Should I get Licensed Just to Sell my Own House and Save Money?* was first published on donnahomesblog.com.