Weekly financial Q&A, with advice on selling your home and buying a new car.
What are the advantages of using a real estate agent versus going the for-sale-by-owner route when it comes to selling a home?
I’ve had a real estate license for 30 years. If I were to put my personal residence on the market today, I’d use an active real estate agent who really knows his or her stuff in the marketplace. I’d gladly pay them their commission, too.
Now, why would I do that if I could just sell it myself and save the commission cost? For starters, if I do a for-sale-by-owner, or FSBO, I’m only getting my place in front of buyers I can attract from seeing a newspaper ad, Craigslist and anyone who happens to drive by the house. If you go with a high-octane real estate agent, you’ll have the advantage of being exposed to their entire pool of buyers. More importantly, you’ll be in the MLS, or Multiple Listing Service, database. There, you’ll immediately have thousands of potential buyers. So who do you think will have the best chance of selling your house? Market exposure is everything in the real estate game!
And think about this: Even if you went the FSBO route every time you moved, you might do three or four of these transactions in a lifetime. A good agent closed three or four deals last week! They’ll know all the ins and outs of buying and selling a home, and they’ll walk you through every step of the process. Research has shown that between basic mistakes, pricing errors and lack of negotiation skills, you’ll cost yourself more than the agent’s commission by trying to sell it yourself.
Trust me, you’ll get a much better deal — with a lot less hassle — by using a top-flight real estate agent!
The cost of new car can’t be justified
How much do you put into your old car for maintenance and repairs before it makes sense to buy a new vehicle?
I know a lot of people don’t believe this, but it’s almost never mathematically justifiable to go out and buy a new car, or even a newer one. Let’s say you’re driving a $1,000 car and you keep having problems and putting $250 worth of repairs or maintenance into it each month. Do you realize how long you can keep putting that $250 into the car before you reach the point of it making sense to buy a new $10,000 car? I mean, we’re literally talking about years!
Really, it all boils down to a couple of things. One, do you have the money sitting around to pay cashfor a new car? If you’ve worked hard and can go to the dealership and write a check for a new car, then go for it.
The second thing is the hassle factor. Is the car absolutely unsafe, or is it driving you nuts in terms of inconvenience and repair costs? If so, then you might need to look into getting a newer vehicle. You’ll notice I didn’t say a new car, right? And you still pay cash. You don’t want five or six years’ worth of car paymentshanging around your neck.
I’m not against you having a nice car, Christy. What I’m against is your nice car having you!
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