Introduction
Over the last several years, the rise in property values has significantly increased the cost of realtor commissions and has home sellers looking for alternatives to traditional real estate agents. The default option for many sellers has always been to employ a real estate agent to manage the entire process and in exchange pay 5-6% in commissions. That was fine back in the early 2000s when the median home price was $119,600. That meant you were only paying about $6,000 in total commissions. Today, however, the median home price has skyrocketed to over $436,800 costing the seller well over $20,000 in commissions alone. In identifying this problem there has been a recent explosion of entrepreneurial activity aimed at providing homeowners with fresh innovative approaches that give them more autonomy, control, and (of course) cost savings in various different ways. Among these are, flat fee MLS listings, For Sale By Owner (FSBO), iBuyers, and other discounted real estate brokers. All of these options promise to make home selling “easier” or “better”, but which one is the right choice for you?
In this comprehensive guide, we’re taking a deep dive into each of these home selling options and talk about what each one entails, the advantages and disadvantages they present, and most importantly, how they stack up against Falaya. After you read this blog you should feel armed with knowledge and insight, enabling you to make the best decision for your home selling needs. This is a long article so feel free to skip to the sections that are relevant to your decision by clicking on the links in the table of contents. Let’s dive in!
Falaya VS Traditional Real Estate Agents: Pros, Cons, and Comparisons
For several decades, traditional real estate agents were the standard go-to option for selling a home. Selling a home was considered an intricate task requiring specialized knowledge that was only accessible in the form of hiring a licensed real estate professional. The real estate agent was in fact the gatekeeper of all the critical information needed to sell your home. Given the relatively lower home values of the past, paying these agents 5-6% of your homes value was well worth the couple thousand dollars you’d pay in commissions. Sellers across the board agreed that this cost was one they were willing to bear for the convenience and assurance of a successful sale.
Fast forward to the present day, and the landscape has dramatically changed. Home values have soared to heights that make most peoples heads spin, meaning that the same 5-6% now amounts to tens of thousands of dollars taken out of the sellers proceeds from the sale. At the same time, technology advancements have democratized access to all the information that was once only available to agents. As a result, the cost to benefit analysis of the traditional real estate model has increasingly come under scrutiny, with homeowners seeking alternatives that offer a better balance of cost, control, and support to sell their home.
Pros of Traditional Real Estate Agents
Convenience: Traditional real estate agents take care of everything for you. This includes scheduling professional photography, communicating with the various parties to the deal, marketing the property, negotiating with potential buyers, and managing all the paperwork to ensure a smooth closing experience.
Expertise: Experienced real estate agents not only bring their knowledge of the local market, pricing strategies, and negotiation skills to the table. They also bring with them established connections to lenders, title companies, contractors, etc. This can be particularly valuable for first-time sellers or those who are not confident in their ability to handle these aspects themselves.
Cons of Traditional Real Estate Agents
Increasingly High Cost: The biggest drawback of using a traditional real estate agent is the cost. A commission of 5-6% might not sound like much, but unless your selling a home well below the average home price, you can expect to pay tens of thousands of dollars in realtor commissions. In fact, if the average seller at the time this article is being written is paying nearly $23,000 in commissions to realtors.
Less Control: When you hand over the selling process to a traditional agent, you have less control and involvement in how your home is marketed and priced, and you may not agree with every decision your agent makes.
Traditional Real Estate Agents Compared to Falaya
Falaya offers an innovative alternatives to traditional real estate agents, providing a perfect combination of technology, personal support, and value. Here’s how Falaya compares:
Variable Cost: With Falaya, you can pay as little as a flat fee of $399 all the way up to the traditional agent cost. You get to decide how much agent involvement you want and only pay for what the agent actually does for you. This represents enormous flexibility and cost savings when compared to the thousands (or tens of thousands) you’d pay a traditional agent whether they did a lot of work or none at all.
More Control: Falaya gives you full control over the selling process, allowing you to have full autonomy in deciding things like your listing price, how to approach negotiating offers, and managing all viewings on your terms. With falaya you get to take charge and sell the way you want to.
Comprehensive Support: Despite the increased control, you will never feel like you’re alone. Falaya provides each seller with a dedicated transaction coordinator and a host of technology tools that are all specifically designed to support you, the seller, and simplify the entire selling process from listed to sold. Whether you are a seasoned home selling pro like a real estate investor or a first time home seller, you’ll have everything you need to get to the closing table efficiently and effectively.
Broad Exposure: Just like a traditional real estate agent, Falaya lists your home on the MLS (Multiple Listing Service), ensuring it reaches a wide audience of potential buyers. On top of that all sellers can get increased exposure by having Falaya run advertisements outside the MLS to reach even more buyers.
While traditional real estate agents provide a comprehensive, hands-off experience that many sellers still do find valuable, its getting harder and harder to justify the associated costs as home values continue to rise. Falaya, on the other hand, combines the best of both worlds – cost savings and control for the seller, with the support, tools, and broad exposure that has historically been provided exclusively by the traditional real estate agent.
Falaya VS Traditional For Sale By Owner: Pros, Cons, and Comparisons
When searching for alternatives to traditional real estate agents, homeowners who see the value in having control over the sale of their property and saving on those high real estate agent commissions many turn to traditional For Sale By Owner (FSBO). This is the do-it-yourself approach to selling your home, where you forego hiring a real estate agent and take on all the responsibilities of selling your home on your own. Homeowners have to market their property, set the price, handle negotiations and closing the sale. While the prospect of saving a significant chunk of money is appealing, the reality of FSBO is often challenging as the deck stacked against traditional FSBO sellers is high. According to Zillow only “11% of sellers who sold in the last 12 months complete the sale of their home without ever engaging an agent”. The success rate for FSBO sellers is alarmingly low. Often, FSBO sellers who cannot successfully sell their home independently wind up hiring a real estate agent or deciding not to sell their home at all.
The two big reasons for this are (1) lack of exposure and (2) lack of experience. Traditional FSBO homes don’t have the same market reach as agent-listed properties, putting them at a significant disadvantage. Additionally, without a real estate professional’s guidance, sellers are left to navigate the intricacies of pricing, marketing, legal paperwork, and negotiation on their own. This drives even the most determined FSBO sellers to reach out to a real estate professional for help.
Now, let’s analyze the pros and cons of the traditional FSBO approach and compare it to the modern, tech-enabled solutions offered by Falaya.
Pros of Traditional FSBO
Cost Savings: The biggest reason why homeowners choose to go the route of traditional FSBO selling is the potential for massive cost savings. By eliminating the seller’s agent commission (and potentially buyers agent commission), you can save tens of thousands of dollars in realtor commissions.
Total Control: FSBO sellers benefit from total control over the entire sales process. you get to decide the listing price, handle all negotiations, and schedule open houses or viewings according to your convenience. With increased control comes increased responsibility so keep that in mind!
Cons of Traditional FSBO
Time and Effort: The FSBO method requires a significant investment of time and effort. From preparing the home for sale and marketing it, to handling the complex paperwork and legal requirements, you’ll need to manage every aspect of the sale process on your own.
Limited Exposure: FSBO homes can never compete with agents when it comes to online exposure for listings. The MLS is the ONLY way to get your listing on every home search site. Without that traditional FSBO sellers spend hours to get their listing on a couple sites like Zillow and Facebook Marketplace.
Negotiation Challenges: Negotiating a home sale can be difficult, particularly for first-time sellers. Without the guidance of an experienced professional, you might struggle to negotiate effectively or might accept an offer that is lower than what you could have achieved.
Traditional FSBO Compared To Falaya
Falaya offers an enhanced FSBO experience by addressing many of the traditional method’s drawbacks and providing custom technology solutions combined with a top notch seller support team. Here’s how Falaya compares:
Cost Savings with Seller Support: Like traditional FSBO, Falaya also offers significant cost savings compared to using a traditional real estate agent. However, unlike FSBO, you still get support in the form of a dedicated transaction coordinator and access to technology tools that are designed to ensure you have a smooth, seamless, experience all the way through closing.
Control with Exposure: While you retain control over your sale process like a traditional FSBO, your home still gets listed on the MLS with Falaya. This ensures it gets seen by a broad audience of potential buyers no matter what site they are using to find their next property.
Time Savings: Falaya’s platform and support significantly reduce the time and effort required to manage the sale process, compared to traditional FSBO. Your transaction team works in the background to route communications, prepare legal documents, and communicate to all parties involved.
In conclusion, while the traditional FSBO approach does offers cost savings and control, it demands a lot of time and effort and makes it difficult to compete in the market. Falaya enhances the FSBO experience, offering similar cost savings and control, but with greater exposure and much-needed support, making it a more balanced choice for many sellers.
