This page is for those DIYers who, for reasons that are usually financial, decide that they're going to try For Sale By Owner. It's just to give you something to think about. And if for some reason this doesn't interest you, at least scroll down to the final notes at the end....
The #1 reason why using a Realtor® may actually be a better choice :
“What is your family worth?”
Are you really going to let strangers into your house, especially at a moment’s notice? Would you let the cable guy or the phone guy in without an appointment? What about the dozen or more people who want to see your house? When they drive up, aren’t you going to let them in hoping they’ll like it enough to buy it?
When I don’t come back from a showing, my wife and/or company knows where I was heading and with whom, and can call the police. Who will know every time you are showing your home to a stranger?
When I don’t come back from a showing, my wife and/or company knows where I was heading and with whom, and can call the police. Who will know every time you are showing your home to a stranger?
Who’s going to call the police for you?
What are the chances...?
‘Hi. My name is ______ and I'm calling because I saw your (yard sign/ad in the paper/listing on a FSBO website) this morning and was wondering if my wife and I can stop by tomorrow about 12:30?’
‘No, that won't work. My wife and I will be at work.’
‘Ok, well I have to do some overtime and won't get out until about 6. Is 7:00 too late to come see it?’
‘No, that’s fine. That would actually work much better.’
‘Great! Well, thank you for your time. My wife Janet and I will see you tomorrow evening.’
The next day around 1:30, your house is broken into, vandalized, and robbed.
A Few More Reasons
Granted, some people are able to sell their own homes without a real estate agent. For most though, a for-sale-by-owner (FSBO) can be difficult. Here are some reasons why:
- Many agents won't show FSBO homes. That means the pool of potential buyers for FSBO homes is limited primarily to unrepresented and quite possibly unqualified prospects.
- Is the financial difference worth the amount of time? Consider this: generally, a Realtor can sell your house for more money than a FSBO. If you try it yourself you may still need to pay out at least 3% to the buyer's Realtor. So now you may save 3% ($4,500 to sell a $150,000 house). Ask yourself, for that small a percentage, can you effectively market your home? Can you list it on multiple websites? Are you willing and able to stay home weekends for showings? How much will it cost you to have an attorney draw up the necessary contracts properly? Will you know if the title company is doing a good job?
- Who is Coming to your house? Can you pre-qualify everyone who comes to see your home BEFORE letting them in? Are they really potential buyers? Nosy neighbors? A thief casing the place?
- FSBOs can't list their home in the MLS. Yes, you CAN use websites that will charge a “don’t pay commission, just pay a flat rate” fee to list it for you, but they won’t be escorting potential prospects, or screening them to make sure they can afford your house.... AND you’ll have to pay it up front. What if it doesn't sell? Commissions aren't paid until the closing. It never comes 'out of pocket'.
- FSBOs may stumble into legal trouble. A FSBO who overlooks even one required form or legally mandated disclosure could face an expensive lawsuit, even after the transaction closes. You can, of course, pay an attorney to ensure all the required paperwork is done.
- Buyers will feel intimidated. Potential buyers will spend less time in a property when the owner is present during the showing (even if they have an agent), or will be shy about discussing its pluses and minuses.
- Many FSBOs wrongly price their home. Overpricing a for-sale home is a sure way to deter potential buyers. And believe it or not, pricing it too LOW can also be detrimental and can be costly.
If you choose to move forward with selling your home by owner, not only do I wish you all the best, I hope you will let me give you these few tips:
- Price your home correctly for the market from the start. Look at your home as a buyer, not as the owner.
- Advertise!
- Make yourself available to have your home shown at ANYTIME within reason, of course. There are a lot of homes for sale, and buyers will typically just move on to the house that can be shown when they want to see it - whether that's at 5:30pm when they finish with work, during family time on Saturday or just before your Sunday after-dinner nap.
- Pre-qualify your potential buyers. Before you schedule an appointment, make sure they can really afford it.
- Complete the required paperwork for buyers (not every prospect) to review.
- Contact a local title agency and/or real estate attorney to draw up the proper paperwork and complete the transaction.
- REMEMBER: If you're selling it on your own because you think using a Realtor is too expensive, making a paperwork error can be very costly!
Let me close by saying that even if you decide to sell your home by owner, give me a call and let’s set up a meeting to talk things over.
- First, it'll give you the chance to see whether the commission fee will pay for your time and expense (marketing, forms, attorney fees, title company, etc.) needed to sell it yourself. By the time you pay for that MLS service "flat fee", the title company, the attorney, what the buyer "negotiates" you down to, and possibly a buyer's agent commission, you may actually save money with an agent, not to mention time and headaches.
- Second, you may be surprised to find we may be flexible on the commission, or even a way to get the buyer to help with those costs.
- Third, you may find a potential agent to list your home in the future, if your For-Sale-By-Owner efforts don't turn out as you hoped.
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ForSalebyOwner.com Founder Uses Agent to Sell Home The founder of a popular for-sale by owner Web site used a real estate broker to help sell his 2,000-square-foot, two-bedroom New York apartment after it lingered on the market for six months. Colby Sambrotto, the founder and former chief operating officer of ForSalebyOwner.com, tried to sell the property himself by listing it online and through classified ads, but after six months of it sitting on the market, he sought the help of a real estate broker. The broker told Sambrotto the condo was priced too low and wasn’t attracting the right buyer for the condo. "At first he wouldn't let me increase the price," the agent said. "I told him I know what I am doing—the market is picking up." The condo soon attracted multiple offers and ended up closing recently for $150,000 more than the original asking price. (italics added) Source: “DIY Guru Gets Broker Help,” The Wall Street Journal (Aug. 3, 2011) |