Let me cut the chase and go straight to pros and cons.
For hiring a property agent
1. These guys/gals are doing it for a living, hence they are much more specialized and knowledgeable. They are also supposedly to be a good negotiator. Though this is not a rocket science or required by law that you must sell through an agent, having an expert around to handle a large sum of money will help us to avoid silly mistakes.
2. When money is involved, especially for a large sum, we tend to be emotional. They will be able to advise us in much more objectively(I hope) to come up with a more accurate valuation of the property that we wish to sell. Like investing in share, we tend to anchor or make reference to something that is familiar to us. In this case, we tend to make reference to new launches. But often times, unless you are sitting on hot area, second hand house will tend to be valuated at transacted price. There are owners will not want to let go simply that they perceive that they have lost too much on realizable value. 20% discount to a new house is common.
3. They can access to a larger pool of legal resources and also financial institutions. This will help the buyer a lot in getting legal advice or a loan. This certainly makes the transaction can go through much faster.
4. They help us to screen through the genuine buyers or information seekers. The will make all the arrangement to view our house. If we were to sell it ourselves, then we will have to attend to every potential buyer.
5. If you don’t have time, it’s better to forgo 2% of commission expense and they will do all the works like advertising, taking phone calls, distributing flyers and etc for us.
Against hiring a property agent
1. Why don’t we save the money ourselves? 2% commission on 200 k is 4k, 300 k = 6k, 500 k = 10 k and 1 million = 20 k?
2. A potential buyer will perceive that they paid for the commission. A potential buyer will also suspect the property agent will mark up the price from the minimum value a seller is willing to let go. Some of them will want agent to be eliminated.
3. A property agent may not be familiar with the house and unable to sell the strength of your “product” especially if your house is heavily renovated. Unless the agent is familiar with your area, they may not know where the school, market, mini market, hardware shop, banks, etc……
4. They may want to push the easy sell – good location, high $$$ value, etc. If your house is in the disadvantage situation, it’s the last one they will recommend. This is especially true if you let some of more established property agents to handle them. I contacted one of the very reputable agents and they don’t even return my call after I briefed them my property.
5. In some extreme case of they are motivated by greed (maximum commission), they may push the price to the highest and may reach to a level of not saleable.
6. Online advertising is getting more and more common nowadays. It can reach wider audiences. You can also start to communicate with them via e-mail or cellphone and exchange a few photographs to screen through the potential buyers. If you feel they are genuinely interested in your house, then you can arrange a physical viewing.
7. You are in-charge of the negotiation. You can see all body language and can decide how hard you want to push your selling price. In other words, you are getting all the first hand information.