I have been told over and over, the number one reason a FSBO doesn't want to use an agent is to save the commission,
I've decided to offer an alternative to the normal scenario.
First, however, lets reflect on the reasons why owner selling is not ideal. Often times an owner, if not a professional in the real estate industry, will overprice their home. They come up with a sales price which most often is calculated with the normal real estate commission added to the top. Since potential buyers know this, they will argue the price should be less the brokerage fees. There goes your SAVINGS. The buyer wants to partake in the deal you are getting.
Selling your home by yourself comes with added potential legal exposure. Are you aware of how or how to protect yourself? FSBO's often think "I am the best person to sell my house." Yes, you know the house as a home, the ins and outs of it. In addition, this is where all your memories were made which gives an added emotional value to the house (which a buyer cannot appreciate). You know all the little improvements made over the years. Buyers are looking at the bottom line. Often buyers see FSBOs as a place to take advantage. They know the seller is not represented by a professional agent, and they are looking to take advantage of that fact, hoping to pick up equity at the sellers inexperience and expense Hopefully, the punch will be as obvious as the offer price, if not, be careful to look for the how or where. It's open season on FSBO and haggling sellers is where some investors pose as everyday Joe's fishing for a whale of a deal.
Yes, maybe you are the kind of person that likes to paint your own house to save money or run down to the local Home Depot and hire someone for 10 bucks an hour. It is understandable that you see these aspects as ways to save money, but thequality of a licensed, bonded, and experienced painter will always prove to be a safer, cleaner, better finish product.
Just to touch on another legal issues in case you don't know nit is illegal to hire anyone but a licensed contractor. Hiring indiscriminately can come with a hefty fine. Also don't overlook liability, if someone gets hurt on your property it's highly likely your insurance won't cover you.
Many things in life are this interwoven and selling your home is even more complex than it may seem. Even if you hold a license in another state, or have been out of the business for 4-6 months. It is best to use a professional that has a pulse on the Market, connected to the area, and up to date with all the State legalities of selling a home.
Here are a few of the caveats. Lets begin with advertising your home. A professional brokerage has many more avenues when listing your home for sale. Besides numerous websites designed to do just this we pay to place your home on the MLS and other professionally established hubs. This has the indispensable benefit of reaching agents who have been working with buyers for 4-6 months or longer and they are just waiting for the right property to become available. The MLS is where the industry turns, Actually many agents have set their clients to be notified with up to the minute new listings that enter the market. The MLS is the backbone of the industry!!! You simply cannot get the market exposure nor the speed of broadcast for your listing that even an average professional real estate agent can get for you. Its a simple mathematical truth that the more exposure your home has the more potential qualified buyers it brings. yOU SIMPLY CANNOT COMPETE. Most close social networks; friends, neighbors, or work associates wont generate enough traffic to get your home seen. Less exposure means less interest in your home, and lack of interest, wont help bring market value.
It is unlikely you will be able to value your property properly, as the tools online are not set for a in depth valuation. Many of my clients say "well I found a property on Zullu and a little more research shows that these properties are not up to date. Many listed this site and sites like these have been sold already, it is not uncommon to see a property that has been sold months earlier. So the data is out of date here as well as the valuation data. It is not the selling price that determines valuation, but the SOLD price, which is not the data available on these sites. It is unlikely, unless you use an agent with current comps available, that you will be able to garner a realistic price for your home, let alone know its true market value.
Qualifying potential buyers is another major obstacle for FSBO. Perhaps much of your traffic is coming from "afirstname" +list.com. And if that is the case your turnout is likely to be gutter kickers, lookie loos, and on a rare occasion, a qualified buyer. But, how are you going tell who is qualified and who is not? . How will you go about determining that? Is a pre-qualification letter from a bank worth the paper it is written on? What if you put your home in contract and the buyer can not secure the necessary financing? What are your options? While a selling broker normally arranges qualifying the buyer's mortgage beforehand, how is a FSBO going to accomplish this? The hard truthi is you are left to the integrity of the buyer, which is commonly inaccurate. Without a third party verification, a FSBO doesn't have much security to the legitimacy of an offer. Nor does a FSBO have clear legal grounds to fall back on if the potential buyer just walks away.
If you have time to test this out, TRY to sell your house yourself. Not only will you likely wait longer to see an offer, but dread it every time the doorbell rings at an inappropriate hour. If an offer finally comes, you may experience the FSBO "punch" and it will be aimed at the bottom line.
Well putting a "for sale by owner" sign in your yard hasn't cost much money up to this point, right?
Say a qualified potential buyer brings you a major objection. Are you confident you can bring them back to the table? If you haven't done this successfully more times you can count, you will most likely loose the buyer or have to resort to a price reduction to bring them back to the table.
Do you have any time limitations? Can you afford to leave your house empty until it sells? Are you moving out of the area? Many of these issues have lengthy caveats as you may see from just a few I have touched on. I am going to leave many simple issues as just questions. These should quickly be sorted out with just a little common sense.
How are you at negotiations? Inexperience can cost you plenty! Think about how many times have you have negotiated closing costs, sales price, or repairs to a property. If you can count this on one hand, I would strongly advise you consult a professional real estate agent. Having a professional team that deals with these matters on a daily basis is experience worth having on YOUR side. Agents with under 5 years full time experience are not considered seasoned, but they can run circles around 99% of FSBO buyers and sellers. Your inexperience will shine like a beacon should you come up against even a newbie agent.
Agents can and WILL take advantage of your inexperience as it is their job, their contractual duty, to work for the benefit of their client. This will most assuredly translate into financial losses for you.
Real estate agents are constantly meeting mandatory continuing education requirements, and there is no substitute for experience. as an agency with more then 30 years experience, we assuredly know how to professionally handle a wide range of contractual and legally binding issues.
Another potential scenario may be, your potential buyer has another property and buying your home is contingent on them selling theirs. How would you handle this situation? Do you know how to setup protection if this is your only or best offer? Will you use legal documents for this offer and if so, do you know how to fill them out properly? Be careful here a small mistake can cost big.
Before taking the leap to sell by owner, to save yourself the 5-6% commission, consider these things. Do a quick calculation on advertising, legal fees, inconvenience, and stress. What about your time? How many hours you estimate you will need to put in to sell your home? What if you fail to make the sale at all? How much time, energy and money did it cost you?
*Studies have shown sellers net more money with agents than going it alone.
With us if your home does not sell... you pay nothing. No advertisement, no legal fees, no cost for showings, gas, signs, printed material, or even cookies.
There is a significant amount of paperwork and completing it all correctly takes a tremendous amount of education. This should be definitely be left up to a competent seasoned professional. Most brokers don't even trust 5 year agents to go it alone with this task. Many aents have transaction coordinators to oversee this FSBO could leave you open for litigation for years to come. I have only covered a few aspects here and there is much more I should bring to light. But be sure to do your research on the legal issues when doing a FSBO.
Sure, itís possible to sell a house without using a professional real estate agent, but at what cost and what risk? Keep in mind if you don't sell, how much time and money out of pocket it can cost you.