Real estate agent, iBuyer or FSBO: What’s the best way to buy or sell a home?

The homebuying/selling experience is a deeply personal one. After all, this could be the biggest transaction you ever make. A real estate agent can help simplify confusing paperwork, connect you with the right buyers or sellers, work out deals, and reduce your anxiety about the entire process.

But even though working with an agent is the norm for most, you technically don’t need a real estate agent to buy (or sell) a home. Any homeowner can list their property for sale or sell to an iBuyer. So, is hiring a real estate agent the right move for you? Read on to learn more.

If you decide to use an agent, it’s essential to work with the right person. Many buyers use someone referred to them by a friend, neighbor or relative or one they have worked with in the past. It’s always a good idea to interview several candidates before picking one that best suits you.

The best fit is completely up to you. One candidate might have more experience but charge a higher commission. Another might have less experience but truly understands what you’re looking for in a home.

If you’re a first-time buyer or seller, an agent’s knowledge, experience and professional network could help you better navigate the process .

First-time home buyers make up about 31% of all house shoppers. Millennials, the largest group of first-time buyers, say paperwork and understanding the process are the two most complicated parts of buying a new home. And across all generations, 53% say finding the right home is the toughest part.

Lucky for you, these are all parts of the process that real estate agents are trained to handle.

For buyers, agents search through listings to find the homes that meet your criteria and help you weigh the pros and cons of each residence you consider.

A good agent will also have a large network (which might include professionals in home-related fields like construction, interior design and home financing) and know of homes that haven’t hit the market. The best homes in hot markets tend to go fast, so having a leg up on your competition could make all the difference. With a strong agent by your side and a pre-approval letter from a mortgage lender like Ally Home in hand, you’ll be ready to take on any bidding war .

Speaking of … found a home you love but a competitive market has pushed its price higher than what you’re willing to spend? Agents also help negotiate the price for you. Your agent can work with the seller’s agent (or the sellers themselves) to get you a house for a fair price.

Sellers can use real estate agents, too. Whether you’re upgrading your digs or downsizing to something that’s more manageable, your agent will work to bring serious buyers through your doors, potentially minimizing the amount of time your home is on the market (and the number of days you have to keep your home completely spotless).

A seller’s agent also helps with both open houses and private showings and will negotiate on your behalf with potential buyers.

Real estate agents put in a lot of time and effort so you don’t have to.

For their work, they typically charge sellers about  6% of a home’s sale price . So on the sale of an agent-assisted $265,000 home, they’d receive a commission of about $16,000.

This commission is usually split between the buyer’s and seller’s agents. And while the sellers typically “pay”  both agents , oftentimes that fee is worked into the listing price of the home, meaning the buyer essentially pays the bill.

iBuyers are a relatively new and fast-growing option for buyers and sellers in the real estate market. An iBuyer is a real estate company that uses technology and algorithms to quickly buy homes using cash offers.

As a seller, you might consider selling your home to an iBuyer if you are looking to close ASAP — possibly 24 hours or less. Even in the hottest market with a great agent and plenty of interested buyers, you’re unlikely to experience such a quick turnaround time when selling the traditional way. If you want to sell to an iBuyer, you don’t have to list your home. Just submit some basic info about your property and the iBuyer will give it an estimate and potentially make an offer.

Selling to an iBuyer can save you time and stress, but it isn’t free of fees. Sellers typically pay the costs of getting the home move-in ready, as well as potential agent fees (depending on the iBuyer company). All in all, fees usually add up to about 7.5% — about 1.5% more than a typical agent commission.

As a home shopper, you can work with an agent to purchase a home from an iBuyer, similarly to how they help you if you were shopping from traditional sellers. Or, if you’d prefer, you can go through the process yourself.

If you’re looking to save on commission fees or sell your home quickly (maybe to someone you know?), then going the for-sale-by-owner (FSBO) route could be a good strategy.

FSBO is less common, but it could help you put that “sold” sign in the yard faster than if you use a realtor.

The home buying/selling process can be unpredictable. It takes buyers about eight weeks and viewing a median of nine homes to find the right abode. But FSBO homes tend to sell faster than agent-assisted homes — largely because sellers know the buyer.

If you don’t already know a potential buyer, you’ll need to be a smart marketer to get the word out about your house to the right people. That means signage, web listings, flyers, open house setups and more. Be prepared to pay out of pocket for most of those expenses, too.

You’ll also need to price your house, a task that FSBO sellers say is the most difficult part of the process (followed by understanding all the paperwork). Our home valuation resource gives FSBO sellers a detailed report of their home’s estimated value based on market trends and comparable homes in their area.

“Is this a safe neighborhood?” might be one of the first questions that pops into your mind when house hunting. However, your agent can’t exactly answer that.

The Fair Housing Act of 1968 aims to prohibit housing discrimination based on race, color, national origin, religion, sex, disability, or family status.

Seemingly innocuous questions like “Is this a good place to raise a family?” or “How good are the schools here?” could be seen as discriminatory, and legally, your agent can’t answer them.

Instead, you’ll need to do some research on your own.

You can find demographic information, school rankings, and crime statistics (by zip code) by conducting a search online.

Whether you’re sold on working with an agent or not, your home buying and selling dreams can be a reality. Depending on your needs and how much effort you want to put into the buying or selling process, a real estate agent could provide the assistance you’re looking for. But for others, an agent might not be worth the cost or the time involved.

Just like you know your dream home when you see it, once you understand the work of a real estate agent, you’ll know whether or not you need one by your side.