Let's say you are downsizing and plan to put your house on the market soon. Houses around you might be selling like crazy, with everyone receiving multiple offers and selling for more than they were asking. If you aren’t in any rush and are willing to put in some extra time and effort, would it be worth selling "for sale by owner" and not hiring a real estate agent at all? After all, why should you pay a commission if all you need to do is slap a “For Sale” sign on the front yard?
It's true that many sellers in a hot market will consider selling for sale by owner (FSBO). The impression is that buyers are ready to jump at the first home that comes up for sale, and no marketing is needed. Still, there are many reasons not to forego the expertise of a professional just yet.
When there is low housing inventory, prospective buyers--the people whom you're hoping will flood in to look at your home--are more likely to use an agent to locate homes for sale, either before they come on the market or immediately upon listing. Most of the time, agents are looking on the Multiple Listing Service (a realtor-created and owned database widely referred to as the MLS) or talking with other agents in order to find new listings for their buyers.
Some ambitious agents who are representing buyers might search the want ads or Craigslist, which will be your primary marketing outlets. They, however, are typically the exception rather than the rule. For the most exposure for your sale, you would need to hire an agent to advertise it, in order to take advantage of the multiple buyers who are out looking.
Receiving multiple offers on a property is both a blessing and a challenge. For example, you could receive two or more offers for the exact amount of the asking price. Which one should you choose? Just because the offers are for the same amount does NOT necessarily mean they are equal. One of the buyers, for instance, may have much more tenuous finances, despite what their offer puts forth. You want a sale that not only comes with high dollar signs, but that will successfully close.
Or maybe one of the offerors' agents is notoriously difficult to work with, and will nickel and dime sellers over issues like home repair needs that turn up during the inspection.
If you don’t know how to evaluate the nonmonetary pros and cons of offers, hire an agent. An agent will also be able to advise you on whether or not you should counter any offer (with new or changed terms) when you receive multiple offers.
Beyond the initial receipt of the offers, an agent can be extremely valuable in a hot market, where everyone is anxiously trying to bid and close on deals. You may, for example, be likely to lose a buyer after the home inspection report comes in, since many buyers in fast-moving markets simply put in an offer to see whether they can get it accepted, then worry about the details later. The inspection leaves the impulsive buyer an easy way out. If the buyer flakes, you need to know how to handle that situation. An agent can advise on whether you should make improvements before relisting or just get the house on the market again ASAP.
There are other obstacles that you should consider as a seller in a hot market. Appraisals can present unique challenges, as can tight deadlines and fast sales. Take a minute and also review Selling Your Home in a Hot Market for other pointers you might find helpful. Best of luck with your sale!