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Wednesday, March 18, 2015

What Should You Do When You Get an Offer on Your Unlisted Home?

[Published Mar. 19, 2015, in the Jeffco editions of the Denver Post's YourHub section. An abbreviated version also appeared in four Jefferson County weekly newspapers.]

More and more, we see homes going under contract and selling without ever going on the MLS.  I can understand the attraction of accepting some agent’s offer to sell your home to his or her buyer and pay only a 2.8% commission instead of paying another 3% or more to list it with a Realtor and put it on the MLS.

You’ve no doubt heard of listed homes getting bid up and selling well above their listing prices. For example, my recent listing for $250,000 went under contract for more than $300,000 before I could hold the scheduled open house.

You may have received postcards or letters from agents claiming to have a buyer, as well as from buyers directly. The agent or buyer may be offering a price that seems too attractive to pass up. But what should you do?

My advice is to thank them but call an experienced Realtor of your choice and put your home on the MLS at their offered price.  You will quite possibly get competing offers that are much higher.  If not, that buyer, if real, will still be there.

Whatever you do, don’t list your home with an agent who claims to have a buyer for your home. Rather, let the agent show your home and treat you as a for-sale-by-owner, paying only 2.8%. Otherwise, you may find that after you have listed, that “buyer” found another house and it was only a ruse to get your listing.
I have heard estimates that 20% or more of the homes being sold today were never active on the MLS. If that is true, it is a disservice to the other buyers out there, but it is also a disservice to the sellers.
Don’t fall for the line that you’ll be saving 3% or more to sell your home without listing it.  First of all, there is no such thing as a “standard” 6% commission. They’re negotiable, and the average is more like 5.5%. And it is common practice to reduce the commission if (1) the listing agent doesn’t have to split his commission with a buyer’s agent and (2) you allow your listing agent to earn a commission on the purchase of your next home.  It pays to be represented!

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