How Selling a House Works

Do I Need a Real Estate Agent?

A full service real estate agent can make the home selling process easier by conducting tours for potential buyers.
A full service real estate agent can make the home selling process easier by conducting tours for potential buyers.
Photo courtesy stock.xpert

Though the Internet has made it easier to sell your home without an agent, about 93 percent of home sales are still done with some type of real estate agent [ref]. An agent can work independently or for a company that acts as the broker. The broker signs the agreement with the seller. Top agents receive 100 percent of the commission and pay a fee to the broker while less experienced agents get 30 percent to 40 percent of the commission.

There are many reasons why hiring an agent can be helpful:

  • Education and experience - A good realtor understands the complex procedure and paperwork involved in selling a home. He or she has hopefully also gone through a licensing program.
  • Saves time and energy - You won’t have to spend time scheduling and conducting tours of your home, which cut into your work and weekends.
  • Gauging offers - An agent can help discern serious buyers from those who are simply looking.
  • The market - A good realtor knows the market and understand trends, which can help your bottom line.
  • Negotiation - An agent has the negotiating skills to help you get a good price.
  • Professional contacts - Your agent’s contacts with other realtors and with contractors, inspectors, landscapers and the like can help you find a solution for any problem you may encounter.
  • Sale price - In some cases, buyers will offer less money to someone who’s not using an agent, believing the seller is trying to save money by not paying commission.
  • "Caravans" - Agents sometimes conduct open houses just for buyer agents where buyer agents arrive in groups ("caravans") and check out the house. This is usually a quick process, is more convenient than a traditional open house and allows buyer agents in the area to tell their clients about your home.

A key tool for real estate agents is the Multiple Listing Service (MLS), a massive online database, which 900,000 agents subscribe to, that contains listings of 90 percent of properties for sale across the United States [ref]. Buyers can access the service for free at Usually, only subscribing agents can list properties, though in some cases home sellers can pay a fee to list their property.

With all of the benefits that come with using an agent, there are some drawbacks. Most importantly, it’s very expensive. Commissions can run up to 6 percent of the house’s sale price, though many agents are willing to negotiate commission, especially in a good housing market. Working with an agent also requires a certain degree of trust, a willingness to place your most valuable possession in a stranger’s hands and say, “Please help me.” But that, along with letting go of any sentimental attachments you may have to your house, is part of the sale process.

If you’re considering hiring a real estate agent to help you sell your house, you have a choice between a full service agent and a discount service. A full service agent does it all -- prepares your home, conducts open houses, uses the MLS, produces slick marketing materials and a nice sign for your yard and in some cases, hires a professional photographer to take pictures of your house.

A discount service provides less, though what you get depends on the company. Certainly you will pay less: discount brokers usually charge 2 percent to 4.5 percent commission. Some discount services pre-screen for qualified buyers, and they should list your house on the MLS. You will have to conduct tours, however, and buyers agents may be more reluctant to show your house because of the lower commission involved (buyer and seller agents generally split commission on a sale). But the service may be worth it if you think you can save money and still get a good price on your house. For examples of discount brokers, try ZipRealty and House Rebate.

Now that we’ve gone over what the benefits and drawbacks are, let’s learn how to find an agent.