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When you decide to sell your home, getting the best possible price for your property is crucial. And when you’re counting every shekel you certainly don’t want to incur the extra expense of a real estate agent, do you?

Actually, yes you do.

But before we go further, how much will an agent’s services cost you?

The standard commission charged by agents in Israel is 2% of the selling price. In other words, if you sell your property for NIS 2,000,000 you pay the agent who helped you find a buyer and close the deal NIS 40,000 (+VAT). That may sound like a lot, but if the agent ends up closing your sale for NIS 50,000 more than you would have got without him, it’s actually a great deal – and this is a very real possibility. Is it possible to negotiate for less than 2%? Yes, it certainly is, but buyer beware: an agent who has succeeded in getting you to sign on the dotted line by cutting his fee may well be hard-pressed to invest the required resources for the broad-based marketing plan your property deserves. Six months later, you may find that you regret taking the cheaper option.

In fact, for the majority of sellers, listing your property with a licensed agent will actually save you money in the long run.

Let’s look at why that’s true:

To start with, if you want to sell your home for the best price, you need to advertise it to the greatest number of people. You have two options: 1) Advertise by yourself on one of the free internet sites such as Yad2, or 2) Enlist the services of a professional realtor who takes responsibility for all aspects of the sale.

Let’s say you want to save the agent’s commission; here’s how option 1 usually plays out:

Your first decision (more significant than you realize) is how to price your property. The average seller searches the internet for similar advertised properties in their geographical area to see what other people are asking. The thought process goes something like this: “Hmm, I see that 4-room apartments in central Raanana are going for NIS 1.7 – 1.8 million, so I’ll price mine the same; maybe I’ll even add fifty thousand just in case – after all, I don’t want to be a freier (sucker) who sells too low! Why not add on a whole hundred thousand, to be on the safe side! There, now we’re asking 1.9 million – lots of room for negotiation. Let’s see if any fish will bite! (We can always say we’re flexible and lower the price later.)”

Or maybe you heard about the guy downstairs or across the street who sold his apartment for 1.7 million. But! You figure that you invested 200 thousand in renovations six years ago … so you decide your apartment must be worth 1.9 million.

In fact, neither the price other people are asking for their apartments nor the amount you invested in renovation are reliable indicators of market value, i.e. what buyers are actually paying for similar apartments. Get comfortable with the crowd on Yad2 – you’ll be with them for a long time.

Either way, you’ve started out on the wrong foot and may already have critically sabotaged your sale.

That’s because when searching the property ads, buyers’ first filter is price. If your advertised price is even 5% higher than other similar properties in your area, buyers will simply not find your property attractive enough to put it on their “must-see” list. Instead, they will leave yours until they have seen everything else, possibly falling in love with a different property and never bothering to see yours at all. Remember, you only get one chance to make a good first impression, and the first impression buyers get doesn’t come from either the location or your beautiful photos – it comes from whether or not they consider something to be a “good buy”.

Thus, with the number of your potential buyers immediately reduced due to overpricing, your selling process has started out with a handicap from which it may never recover. Moreover, the longer you continue to stick to a price that’s too high, the more you lose. Seasoned buyers as well as local agents who see your exposed property advertised week after week (and month after month) know it’s not a good buy, and it gets “burnt” from over-exposure – becomes less attractive simply by virtue of looking unwanted. As a result, even if the market doesn’t change, the property’s value drops. Ultimately, an asking price that’s too high translates to buyers reluctant to make offers even if they do see your property, and the resultant disinterest from the market inevitably leaves you pressured to close lower.

The bottom line: Unprofessional pricing at the outset of a sales cycle causes a downward spiral that can easily end up costing you as much as 10% of the starting value of the property – that is, the price you could have closed at if you had taken advantage of the knowledge and experience of a licensed realtor.

And what about the professional property appraiser (“shamai” in Hebrew)?

Maybe you can just call them to get an accurate idea of what your property is worth? While appraisers’ services are required by banks, courts and mortgage companies looking for an official valuation of a property, they often have little idea of local current market values. Appraisers have general knowledge of the whole country, but for specifics they tend to turn to local realtors for a reality check.

Licensed real estate agents can not only save you money, they also eliminate all your selling headaches.

So now we come to the second option: listing your property with a professional realtor who takes responsibility for all aspects of the sale. Smart sellers use this option. They know it saves them not only endless annoyance dealing with nuisance phone calls and visits from buyers who aren’t serious, but also a great deal of money.

Experienced sellers think of professional realtors when selling their property in the same way as they do lawyers when they need to go to court, or accountants when they have to manage their finances: they want a professional to make sure that a potentially unpleasant task gets done properly with minimal fuss and at the lowest possible cost.

So what do agents do differently?

Most critically, agents know how to price a property to sell. An effective, professional agent will build a market comparison for your property and explain how he arrived at the recommended price. Their full-time experience along with thorough research means that they know exactly what properties like yours are selling at now. When it comes to selling at the best price as quickly as possible, your agent understands that pricing a property too high is just as bad as pricing it too low.

A well-priced property should take two to three months to sell. If yours is taking longer, you’ve already lost more money on the deal than a licensed agent would have cost you.

Beyond the crucial initial pricing, professional agents offer (and are obligated by law to use) a well-tested marketing program, from multi-channel advertising to cooperation with other agents, ensuring your property the exposure it needs to find the right buyer at the right price. Your agent manages all the time-consuming administrative matters of your sales process, making appointments with the most serious buyers, finding out what the buyers will never tell you about your property, and guiding you through the shark-infested negotiation waters until the deal is finally closed.

Find an agent you can trust – he or she will make your life easier and your sale more profitable!