Do I have to use a Real Estate Agent
to Sell My house In Santa Rosa or Windsor?

The Answer is; “No, You do Not Have to Use an Agent”.

There is no law in California requiring people to use the services of a real estate agent to sell a home. Furthermore, anybody with a reasonably good understanding of real estate and the California real estate laws can probably get themselves through a simple transaction and do OK. There are countless resources available for learning about real estate on the internet, books for sale and in the library. And of course, there is the "school of hard knocks" which you may have attended in previously buying or selling a home.

But just “getting through” a real estate transaction is not the same thing as getting maximum value. Some people like to change their own motor-oil or act as their own lawyer in a law suit. If you are a “do-it-yourself” kind of person, you will find invaluable information on this website to help you with your real estate transaction. If you are not sure if you want to use a real estate agent to sell your house, you will find lots of information on this website that will help with that decision as well.

So the question really is not "Must I use a real estate agent to sell my house in Santa Rosa or Windsor?" so much as "Do I want to use a real estate agent to sell my house?” Read-on and see if this helps;

Can I Save Money if I Don’t Use a Real Estate Agent to Sell my Home?

The main reason people consider not using an agent to sell their house in Sonoma County is cost. While all realtor fees are negotiable, the typical cost to use a full-service listing agent in Sonoma County runs between 4% and 6% of the sales price of the home. I’ll use a 5% listing agent fee for this illustration. Sometimes sellers hope they will be able to sell the house on their own, thereby saving the 5%. While they probably can sell their house on their own, statistically speaking they will not save the 5%. There are several reasons why;

First of all, the vast majority of buyers in the Santa Rosa and Windsor area are looking for their home with the help of an agent. This is because most people considering the purchase of real estate know that most sellers will pay the real estate agents commission. From the buyer’s perspective, they might as well use an agent because the agent is free to them. Are these Buyers correct in this belief? The National Association of Realtors (NAR) statistics show that 93% of all open-market real estate transactions use an agent. So the first fact a seller has to face is the very high probability that their potential buyers have a real estate agent.

The second fact a seller has to deal with is that because the potential buyer has an agent, if you want the agent to bring that buyer to YOUR house, you have to offer to pay the buyers-agent fee. This is because most buyer-agent agreements used in the Santa Rosa and Windsor area are written such that the buyers-agent will only get paid the commission amount that the seller is offering. If this amount is ZERO, the agent is not going to show your house. They don’t like ZERO. Honestly, in a Buyer’s market, trying to sell your house without at least offering to pay the buyer’s agent is an absolute waste of time. In a strong sellers market, you might have a better chance, and it might even work because available properties are scarce.

Typically in Santa Rosa, Windsor and the surrounding area, a real estate listing agent (the Seller’s agent) will use at least half (sometimes more than half) of their commission to attract buyer-agents to the property. This is done by listing the property in the Bay Area MLS (Multiple Listing Service) and offering to pay the buyer’s agent fee. In our example using a 5% listing fee, the buyer’s-agent fee would be 2.5%.

SO, if you wanted to sell your Santa Rosa or Windsor home without using a listing agent, you could do so and simply offer to pay the buyer’s-agent fee on your own. In this example, you would offer a 2.5% buyer’s-agent fee. This is half of the 5% you wanted to save by not using a real estate listing agent. Your original theoretical savings for not using an agent is now only 2.5%. Unfortunately, with the buyers market we have in the Santa Rosa area today, a 2.5% buyer’s agent fee may not bring very much traffic to your house. Lately, I am seeing in the MLS (Multiple Listing Service) quite a few “Bonus Commissions” offered by sellers these days, often as much as 4%. This means that the folks down the street are offering a more competitive fee than you are. Guess who gets more buyer traffic? If you too decide to offer 4%, you would lower your theoretical non-agent savings to only 1%. However, I will keep using 2.5% for this illustration.

Statistics show that properties sold through the use of an agent sell faster and sell for more money that those sold without the use of an agent. The NAR (National Association of Realtors) research statistics show that homes sold without an agent sell for 33% LESS than homes sold with an agent. Holy-Cow!, personally I find that hard to believe because 33% is crazy big, but I am not going to duke-it-out with the NAR. I bet that if you want to sell your house in Santa Rosa, Windsor or the surrounding area for 33% lower than everybody else, you should have a line of buyers at your door with cash in hand. My estimate for the Santa Rosa Windsor area is that the real loss is somewhere closer to 10%. Even so, loosing 10% to save 2.5% is Homer-Simpson-style math.

The reason that real estate agents can sell a home for more is simple. Ask yourself this question; “Without experience, could the average real estate agent do YOUR job as well as you perform your job today? Pretty much any job I can imagine can de done better by someone with experience, even the most simple of jobs. Perhaps with simple jobs the person with experience can only do the job 10% better than the person without experience. Maybe they can only do the job 2.5% better. Do you get my drift here? The fact is that a real estate transaction is far from simple and statistically speaking; the experienced real estate agent really can do THEIR job better than you can by a hefty margin. It sure doesn’t take much to kill that 2.5% theoretical savings, but it would take a lot of work just to try.

Ok, so what if the NAR and David Harts are both full of baloney and maybe you could save 2.5% by selling your home on you own? Well, even the hope of saving 2.5% fades very quickly each time you make a mistake like incorrect pricing, poor marketing, or watch your home sit on the market with no buyer-traffic. This gets worse when you think of all the work a good real estate agent would have done for you, but all that work is now YOUR responsibility. Honestly, for most people selling real estate, a good agent will save more than 2.5% AND they will do all the work. Here is how they do it…

Real Estate Listing Agents Perform a CMA to Help You Determine a Price for Your Home

One of the first things a good real estate listing agent will do is perform a competent CMA for your Santa Rosa Ca, or Windsor property. The Comparative Market Analysis (CMA) is one tool that an agent will use to determine the proper listing price for a home. A proper CMA is much more than simply lining-up homes with the same number of baths and bedrooms side-by side and taking an average. This is because the data used for any market analysis comes from SOLD homes. In essence, what we are looking at is "what has happened in the past". What we are REALLY looking for, of course, is some kind of a predictor for what might happen in the future. This requires knowledge of the local market and understanding of each area quirks. It is the interpretation of the market data available to the agent that makes the Comparative Market Analysis an art as much as it is a science. It takes skill and experience. For information on how important correct pricing on a home is, read my article “How to Price Your Home

A good Real Estate Listing Agent Can NEGOTIATE a Santa Rosa or Windsor deal

A good listing agent has been through many different real estate transactions and has been involved in more negotiations in just one year than most sellers will in a lifetime. Their understanding of real estate laws, Santa Rosa real estate processes, and the local market provides powerful tools to leverage in a negotiation. I personally have been negotiating agreements for over 20 years and I can always find another tool or another perspective to improve my client’s position. Negotiating an agreement with maximum value for my clients, while at the same time meeting the needs of the other party, is an artful skill that I'm quite proud of. For more information on negotiations, read my article “the art of Negotiation”.

Many sellers do not realize that there are several stages to the negotiation of a sale. It does not end when they accept the purchase agreement. Because they don’t recognize these different stages, they may make concessions that really should be saved for the next round. Because a good listing agent has been down this road many times, they know what to look for and what to avoid. It’s like Kenny Rogers in the Gambler; “You got to know when to hold ‘em, you got to know when to fold…”.

A Good Real Estate Listing Agent Knows the Legal Paperwork Required for a Transaction

California law requires all real estate transactions to be a written agreement between the parties. The California Association of Realtors (CAR) has developed over 100 different legal forms to be used in a real estate transaction. A good listing agent is familiar with these forms, knows which form to use, and understands the language of the forms. California has more paperwork involving the transfer of real estate than almost any other state.

We have a seller-disclosure for practically everything you can imagine, and many you can’t. Many of these disclosures are legally required from the Seller and it doesn’t mater if you did not know. There is a mountain of paperwork involved in the transfer of real estate and the proper use of the correct legal documents can dramatically help to protect the seller’s interests, and lower their exposure to additional costs. The very last thing you want to happen is to sell your home and then get a lawsuit five-years later.

A Good Real Estate Listing Agent Helps Coordinate Inspections and Paper-flow

In the Santa Rosa area the paperwork transfer between buyer, seller, escrow and lender can be overwhelming for many Sellers and there are many deadlines which are critical to be aware of. A good listing agent is familiar with the flow of paperwork and inspections required to sell real estate, and can counsel the Seller on how to proceed. Failure of a Seller to meet certain deadlines or disclosures can be costly.

A Good Real Estate Listing Agent Knows the Santa Rosa/ Windsor Escrow Process

Sellers frequently find the escrow process in Sonoma County to be confusing and overwhelming. A good real estate listing agent is familiar with the escrow process and will guide their client along every step of the way with knowledgeable explanations and recommendations on how to proceed. Helping a seller to determine which fees and costs they have to pay, and which ones are negotiable, can dramatically help reduce the cost to sell. For more detailed information on the Escrow process, read my article “The Escrow Process in Santa Rosa” .

A Good Real Estate Listing Agent Can Help You Evaluate Buyers and Offers

In a strong buyer's market, all sellers are fighting for the few Buyers that are actually buying and often forget they still have to evaluate the offer AND the buyer. In a Buyer’s market many offers are simply low-ball offers used to test a seller’s desperation. How do you separate serious buyers from “players”? An experienced agent can make a huge difference in helping qualify a potential buyer and identifying possible problems with the offer. These steps help avoid the expense and lost time from taking your house off the market, only to put it back on because the buyer couldn’t perform, or wasn’t serious.

A Good Real Estate Listing Agent Solves Problems !!

In every real estate transaction there are the inevitable glitches and problems that occur. Sometimes these are minor, sometimes they are major, but in most cases a good real estate listing agent has been there before and is ready with a solution. A good listing agent will work to create a long-term relationship with the customer because 80% of most successful real estate agents business comes from referrals and repeat clients. That's 80%. Honestly, the commission involved in a single transaction is truly secondary to a successful outcome of the transaction FOR THE CLIENT. Good Santa Rosa and Windsor listing agents know that the client's satisfaction will mean future business for the agent.

A Listing Agent is a Barrier Between You and a Lawsuit with E&O Insurance

Most real estate listing agents in Santa Rosa, Windsor and the surrounding area carry errors and omissions insurance (E&O). This can provide a layer of protection against a lawsuit from an unhappy buyer, even years after the transaction has closed. In our lawsuit-crazy society, it's nice to have somebody standing between you and the attorneys. More importantly however, with the help of a good real estate listing agent, the chances of even getting into a lawsuit are much lower because you have an expert guiding you through the entire process. Both of these can help avoid heavy costs in selling a home.

Conclusion

Sometimes you can save money by changing your own motor-oil or acting as your own lawyer in a legal problem. In real estate it usually doesn’t work this way. Most people who sell a home without an agent find that the home sells slower and they leave money on the table many times greater than what they might have saved. And it was a heck of a lot of work.
When using a good listing agent, the money saved and problems avoided far outweigh the cost of using the agent. The Talents a good listing-agent brings to the table are substantial; Market knowledge, Negotiation skills, Understanding of the process, Market analysis techniques, Business relationships, Impartial opinion, all combined into a professional relationship that works hard to get maximum value and satisfaction for the client. The old saying "you don't know what you don't know" becomes very clear the first time you work with a great agent. For more information about selling a home on your own, read my article “For Sale By Owner”.

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