Selling your home by owner can be an exciting and extremely rewarding process. If done properly, you can save thousands of dollars in commissions by doing it yourself. Keep in mind, selling by owner is not ideal for anyone and everyone. Unexpected things can and will occur, leading to stressful situations and more than your fair share of headaches. It is a good idea to evaluate your current situation before sticking that FSBO sign in the ground and welcoming people into your home to look around. We have provided some of the positive and negative aspects of selling FSBO. Take the following into consideration.
Money in your pocket -
The primary reason people list FSBO is to save on the high commissions brokers charge to sell a home. Your average $250,000 home listed with a broker at 6% commission is going to take $15,000 out of your pocket at closing. That is on top of the other costs involved with selling your home like: real estate taxes, title insurance, recording fees, home warranty, and attorney’s fees. If you do not have much equity in your home, you may end up shelling out thousands at closing to cover all the costs. It may seem that agents are overcharging for their services, but most of the time they are working extremely hard for the commission they earn. When you take into consideration the typical real estate transaction involving a buyer's agent and a seller's agent, the commission is generally split four ways. An example for the distribution of a 6% commission may look like this: ( 1.5% to seller's agent, 1.5% seller's broker, 1.5% buyer's agent, 1.5% buyer's broker ). As you can see, many times your agent may not be making as much as it seems. In a slow market like the one we are currently experiencing, it may take many months of marketing and showing your home for them to complete the sale and earn a commission. Remember, commissions are negotiable and there are many real estate companies to choose from. Weigh your options and take all variables into consideration when choosing your agent or deciding to sell by owner.
Ability to show your home -
Your work/life schedule may leave little room for showing your home to prospective buyers. In a buyers market, if your home isn’t ready to be shown at a time that is convenient, there is a good chance you will be passed up. Having an agent available to show your home when you are unavailable is what makes hiring one very appealing. They may also be available on weekends to conduct an open house. We offer a high quality video tour with our marketing packages that can supplement the need to show your home. Our high quality online video tours will allow you to show your home to potential buyers 24 hours a day. Its like hiring an agent to hit the high points of your home and encourage buyers to seek more information about the property if it fits what they are looking for. This will cut down on the number of people you show your home to who were not really that interested in the first place. Keep in mind, you will most likely have to show your home countless times before you sell it. So if you have a job with flexible hours or a spouse with an open schedule then selling by owner may be just the thing for you.
Timeframe to sell -
Good agents have the resources and connections to find buyers faster than a homeowner could on their own. If you are under strict time constraints to sell and looking to move your home quickly by offering it at a discount, hiring a seasoned agent will likely work well for you. Statistically speaking, homes listed with an agent do sell faster than FSBO’s. Although selling faster sounds better, it may not always work out that you get the best deal. In today's slowing market homes are taking much longer to sell. Our marketing packages expire after one year but are renewable at a minimal charge. Regardless, having your home priced right and in good showing condition is the key to getting it sold. If you have your seller's documents in order and do some quality advertising, there is no reason your home won’t sell in a reasonable amount of time.
Knowledge of real estate -
The world of real estate is filled with rules and required paperwork that is necessary to successfully complete a transaction. Real estate agents know the ropes when it comes to selling homes and can help simplify the legal jargon. They can put together an effective timeline and make sure everything is being taken care of according to plan. If problems do occur, they will know who to contact in order to get everything resolved. Getting a good agent who specializes in your area will also bring prior knowledge of the neighborhood and community on your side.This may be helpful if you have not lived in the area for very long. If you choose not to use a realtor to sell your home, it is a good idea to obtain the services of a real estate attorney to help you in the process. The attorney present at closing will most likely be representing the mortgage company the buyer is using. Any questions or uncertainties you have would best be handled by a qualified real estate attorney you hire.
A market outcast -
Some buyers may be weary of dealing with FSBO’s due to the possibility of potential problems during the closing process. You will be wise to have all your disclosures filled out and readily available before listing your home. Showing that you are serious and prepared may help to put buyers minds at ease when dealing with your FSBO listing. Agents representing buyers may very likely pass on showing your home too since they would receive no commission from the deal. You may advertise a buyer's agent commission if you want to increase the potential pool of buyers for your home.
Criticism of your home -
Everyone has their own tastes and opinions when it comes to their home. The way you have decorated your home may be completely opposite of the way potential buyers would. Being able to take their criticisms in a constructive manner is essential in the selling process. If you are unable to handle people criticizing your home on a daily basis then it may be good to hire an agent. You may decide to paint the home with neutral colors and take the professional advice of a home stager to broaden the appeal to buyers. Another thing you may have to deal with when selling by owner is lowball offers from buyers. Many people see FSBO’s as sellers who may not know what they are doing. Buyers may throw out lowball offers to see if they may get lucky and catch a deal. If you have longtime ties and memories with your home, it may be best to hire an agent to keep emotions aside.
Advertising and marketing -
Creating maximum exposure for your home can be a difficult task. You will want to use various advertising outlets to promote the sale of your home. Today, more and more people are turning to the internet in search of a their dream home. There are thousands of web sites out there where you can list your home for sale. Some of these sites get no exposure, while others like the major MLS sites get tons. Make sure your home's presence on the internet can be found and the proper information is available. Ads with multiple pictures and especially those with virtual tours get much more attention than those without.
Video Tour Pros can help reduce your costs and streamline the marketing and advertising process. We have the proper tools and knowledge to get your marketing campaign up and running quickly. In no time you will have yard signs up, professional looking flyers printed, and a web site reaching buyers nationwide. Your ad will be placed on over ten of the top real estate web sites for all to see. Your yard sign will attract the eye of those passing by and allow them to obtain additional information about your home. Now you can sit back and relax, just let us take care of the sometimes confusing and time consuming details.
Your Home, your expertise -
If you have lived in your home for any amount of time, you are going to know it much better than a real estate agent who has done a walk through a time or two. You will know the time of day when you home looks its best, when your neighborhood is alive and flowing, information about schools and community events, and what rooms bring out the best in your home. You can tell buyers stories about all the great times you've had with family and friends in the home. You can use the defining features of your home to encourage buyers to imagine the possibilities once they buy the home and move in. Your expert feel for the home will enable you to ignite that extra spark of emotion in buyers that can persuade them that this is the one.
Dealing with agents -
Real estate agents are people too, people have issues. Signing a deal with an agent to sell your house will most likely be an exclusive agreement for a given amount of time. Make sure you choose the right person to represent your property. With the recent boom in real estate, tons of people have gotten licensed as agents hoping to ride the wave of success. This makes finding a true real estate professional much more difficult. Make sure you are hiring someone who really is knowledgeable about your neighborhood. Look out for someone who is going to do nothing more than list your home and wait for buyers to come in.
Negotiating with buyers-
If you leave it up to an agent to negotiate with buyers for you, you may end up selling for less than you could have. While the primary objective of an agent is to get you a premium price for your home, this may not always occur. If your listing agreement is almost up and your house hasn’t sold, your agent may be a little more desperate to push the deal through. They may tell you the buyer has made their top offer and will go no higher when in reality there is still some bargaining room. Negotiating even tens of thousands of dollars out of a deal only means an extra couple hundred dollars in their pocket at most. It is in their best interest to close the deal and collect their money. If you sell by owner, price negotiations can be conducted much more efficiently because buyer and seller are speaking directly. Terms can be worked out and pricing differences settled on the spot. Keep in mind that knowing the minimum price you will accept for your home ahead of time is essential when heading into negotiations.
An outside perspective-
When selling by owner, you may sometimes miss the small things that can set your house apart from others and ultimately get it sold. Having an agent to bring an outside perspective on your home from someone who knows what buyers look for is very helpful. You may invite friends and family over to critique your home and give pointers, but don’t always expect them to give you an honest answer because they may not want to offend you. Staging services are a great idea in lieu of an agent because they specialize in making your home more sellable. These services may cost a couple hundred dollars but can ultimately lead to a much quicker sale at a higher price.
The clout of the MLS-
Access to the MLS is the major advantage of hiring a real estate agent to sell your home. The MLS listings can only be posted by licensed real estate agents who are a member of that MLS system. You may hire a discount broker to list your home on the MLS for you, but this still means you are subject to a commission for the buyer’s agent (usually 2-3%). If you are looking to avoid paying any commission fees whatsoever, listing on the MLS is not the way for you to go. |
