Mary plans to sell her home. She consults with a Real Estate agent who advises h
ID: 2777669 • Letter: M
Question
Mary plans to sell her home. She consults with a Real Estate agent who advises her that at this time comparable homes in the area have an average time on market (time from listing to sale) of 150 days, with the shortest being 30 days and the longest being 270 days. The Real Estate agent advises Mary that he charges the seller a commission of 6% of the selling price for his services. Mary is deciding whether or not to use a real estate agent to sell her home. Beth advises Mary that when Beth sold her home one (1) year prior, that Beth did not use a realtor but did a "For Sale by Owner" (sold it herself); and sold her home in 175 days, saving $12,000 in real estate commissions. Based upon her friend, Beth's, experience selling her home "by owner", should Mary hire a real estate agent or do a "for sale by owner". Explain.Explanation / Answer
Marry needs to do a cost benefit analysis before taking any decision. If she hires the real estate agent she will not have to worry about documentation, showing the property to the buyer and other worries. This way she can save a lot of time and use those hours on her work or any other job to earn money. If for marry, the value of those opportunities and leisure is higher than she should definitely go for hiring the real estate agent. If she gets a lot of free time and is not doing a regular job, she can go for sale by owner and can save the brokerage expenses.