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Should I Use a Broker to Sell My Home?

Realtor showing the contract to the clients.

Podcast Version

Selling your home can be a triumphant or a sad time. It could mean kicking off an exciting new chapter in your life and departing with the fruits of your equity, or perhaps you’re moving under more painful circumstances like divorce, job loss, or your state institutes a law that basically gives the middle finger to independent labor who want to stay independent and well-paid (looking at you, California! New York better not get an AB5 type bill passed, I swear to Toad.)

Maybe both, sometimes people are dismayed to find that while they love certain things about where they live, being a homeowner really isn’t for them. Or you put down roots but then the leaves never grow, so you decide it’s time for a new start. With a new year and decade about to start, you decide to get off your keister and get serious about selling your home.

So do you call up a broker, perhaps the one who helped sell you your home, or do you dare venture into the wild yonder of selling your home with one of these newfangled broker-free options the interwebs has so graciously bestowed upon us?

Related: What is a Villa | Types of Lots | What is a Mansion | Types of Real Estate Job | What If You Just Bought a Plot and Built a Home | You Want to Sell But Still Need a Place to Stay

Trulia, Redfin, StreetEasy, and Just Going on Craigslist, Oh My

Browsing the net on a laptop.

We got more options than previous generations did when it comes to buying and selling real estate. The number of listings that you can see refined to a certain neighborhood, zip code, or even specific block in a number of seconds is dizzying. And if you want to make an offer, or in this case see what kind of offers you can get, you don’t have to work with a broker nowadays. There are tons of apps and websites such as Redfin where the big draw is an FSBO, or for sale by owner, transaction which offers lower closing costs than working with a broker.

Then, of course, you’ve still got the sketchy alley of the Internet, replete with men in trenchcoats offering fake Rolexes and $400/month apartments in Chelsea where the keys are suspiciously located in Nigeria, Craigslist. If you want to sell there, you actually CAN get one or two discerning buyers there from time to time. There are some gems offered by people who aren’t too Internet-savvy, though it’s a more viable option for renters and landlords than buyers and sellers.

Interestingly, though?

According to the National Association of Realtors, of the 5.34 million home sales in the US in 2018, a whopping 91% of sellers were assisted by a real estate broker. In comparison, 87% of home buyers used a broker, whereas it was 69% in 2001! Given that the digital age had intentionally or inadvertently made some jobs and professions obsolete while it created millions of new ones (hi, most online content creators love their work and want to kill bills like California’s AB5 with fire!), it’s truly a fascinating observation that real estate brokers are alive and well.

As Home Stratosphere’s expert on all things related to the beautifully hot mess that is NYC real estate, I can truly state that they’re never going to go away here. Despite all the trash that continually rains upon this place in the form of literally crumbling subways, rampant corruption, and foreign investors basically trying to use this place like a bank, the big rotten apple is always and forever going to be a hot commodity. Real estate brokers can steadily make a killing here, even if those godawful co-op boards could inevitably screw you out of commission. There’s always another high-value sale around the corner or a new renter willing to drop some bucks to get into a new place quicker than the awning at the Brooklyn Bridge J stop will collapse.

Despite all these new options we have, both buyers and sellers are using brokers more than ever. Real estate professionals got a whole new slew of tools to work with to position themselves as experts in their region, county, or if in a city as large as New York, specific neighborhoods and developments.

So, should you join the majority and look for a broker, or go off the beaten path and try keeping more money for yourself?

Commissions and Other Selling Expenses

Woman wearing red glasses and holding some dollar bills.

Typically, a seller’s agent will get 5-6% of the total sale price and the buyer’s agent 2.5-3%, but this varies depending on where you live. So let’s say that you go under contract with an eager buyer who has the cash or financing to pay the agreed-upon price of $250,000 for your home that has $100,000 left to go on the mortgage. After staging expenses, closing costs and other legal fees, then repaying the mortgage balance, you have $125,000 left. But with a 5% broker fee, you’ve also got a $12,500 commission, so you have $112,500 after the smoke clears completely.

Doesn’t sound like too shabby a deal, but $12,500 isn’t exactly pocket change unless you’re Jeff Bezos or some shit.

Some people are so hellbent on saving this $12,500, or possibly more if the sale price winds up being higher than expected, that they want to find a way out of it. And depending on where you live, that might work. New York real estate is a whole other microcosm that has entire websites, brokerages, and libraries dedicated to it, and that’s just one market in one corner of America. Even within the city itself, the intricacies of selling a home are incredibly different for Manhattan in comparison to The Bronx and Staten Island.

But if you go across the river to New Jersey, selling a home has a wildly different dynamic. Selling a small condo five minutes from the turnpike is a whole other animal from selling a converted farmhouse in Jersey Devil territory where you’re at least twenty miles from the nearest strip mall.

The former could easily get several buyers interested immediately if they’re commuters looking for a no-fuss place to live, but the latter could actually have a small and tight-knit community where the entire transaction could be broker-less because each side just retains their own attorney and that’s that. The former may actually require a broker just to vet the buyers alone.

So ultimately, this really comes down to:

  1. Do you know anyone personally who wants to buy your property?
  2. Can they feasibly buy it sometime soon, and sign a legal contract sealing their intent to do so?

If you answered “no” to both of the above, you’ll probably want to get a broker to save yourself a million headaches.

Pulling up that National Association of Realtors’ page once more, they said that 49% of FSBO sellers did not actively market the property. While it’s not quite the majority and we can’t further extrapolate how many of both the 49% and 51% successfully closed, it can be inferred that most of the successful sales come from smaller markets and/or sellers who had more personal relationships with their buyers and thus did not need to market. Not actively marketing the property could also indicate simply not having the time and headspace for this task. Because oh yeah, buying and selling real estate is a HUGE drain on both of those things!

Selling a Home is a Time-Consuming Process

Mortgage financing concept.

One of the biggest annoyances in both buying or selling a home is that it takes a LOT of legwork. It’s not as simple as clicking an ad, being taken to the product page, then it shows up on your doorstep courtesy of Shopify or Amazon.

No, you’re buying this hulking piece of wood, stonework, Sheetrock, and god knows what else and it’s meant to provide sustenance and shelter. It can also catch on fire or get flooded! Some buyers may fall in love at first sight, but many will look at easily 10-50 properties before making a decision. When you’re in a notoriously tight market like New York, you often have to look at least 20 properties because someone else’s offer could’ve been accepted before you even get to see the place.

Buying and selling real estate is by and far the largest financial transactions that a vast majority of Americans will ever engage in their entire lives. So when you go to sell, it’s not as simple as listing an old pair of jeans on eBay. Where you can just let the listing do its thing after you take pictures, measurements, and talk a little about the brand and fit then just throw it out into the ether and hope someone eventually bids or pays the fixed price.

No, you’re going to get lots of questions about the home, far more than what the inseam is on that pair of jeans. Imagine what you went through as a buyer, but magnify it until it can set the paper on fire. Are you going to be able to constantly field those questions, and schedule showings when you could be at work or traveling where you must constantly play Jenga with scheduling?

Some of the major real estate sites include Redfin, Trulia, Zillow, and NYC-specific StreetEasy. There’s got to be a few hundred more dedicated to specific markets and niches of buyers and sellers. Will you have the time and patience to stay on top of all those listings and be able to manage their pages, or potentially limit your buyer pool by only sticking to one or two?

Man's head exploded.


The vast majority of home sellers use a broker because they don’t have the time to personally be there to deal with potential buyers. Not to mention that when you have to properly stage your home and get it in move-in condition unless you’re selling it as-is– the last thing you want to do is orchestrate someone getting all this shit out of your house, and making it look all pretty like an HGTV special and wondering how come it didn’t look like this when you actually lived there.

While you’re likely to have to pay for cleanup and staging out of pocket before a contract even gets initiated, a broker can help orchestrate all of the things involved in getting your home looking its best for those glossy pictures and open houses. It’s going to be on you personally get things into storage or your new residence if you’ve already moved, but a broker is practically mandatory if you’re doing a long-distance move and can’t be in the area at all unless you’re selling to someone you personally know and don’t need to worry about staging or anything.

Check the Fine Print of Your Broker Agreement!

Magnifying glass resting on a document.

In a vast majority of cases, the broker doesn’t get paid for their time until the sale successfully closes. When you’re listing with a broker, or looking for a home with one, you need to sign an agreement that outlines their services and what they offer, and if they are entitled to any compensation from you as permissible by state laws. The broker agreement is valid for a brief timeframe, usually a month or two. Sometimes less than a month depending on state law and the nuances of the real estate market where you currently live or are looking to buy or sell.

In most cases, you won’t have to pay them if you list your home and it doesn’t sell. But if you change your mind and decide not to sell, it could be a different story if you’re still within the timeline of that contract compared to the property sitting on the market for months with nary a bite.

If you decide to go against the grain and not work with a broker, you don’t have to worry about this. But if you ultimately want more money out of the transaction, in the end, you should definitely do your research on real estate norms for your area. It’s easy enough to find nowadays by going on sites like Trulia, Redfin, and so forth as well as finding out from state or municipal data what recent home sale prices are where you were. Not listing prices: what properties that actually sold went for. New Yorkers have it easy with this part with StreetEasy’s ACRIS integration so you can find old closing docs in seconds.

Deciding how to sell your home is a major undertaking. Ultimately, it depends on how you want to reach potential buyers if you don’t know anyone willing and able to buy your place. But saving the commission alone shouldn’t be the only factor if you’re going to go the FSBO route. Think about the buyer pool as well as the time suck involved in showing buyers around and if you’ll be up for it.