The Risks of Selling Your Property Yourself
1. When you sell your home yourself, you have limited exposure to qualified buyers, who are working with real estate professionals to find their dream home, which theoretically means your home will take longer to sell on the market.
2. The longer a home is on the market the lower the selling price is. Why? Because most buyers think that if the home has not sold after a while…there must be something wrong with the home, so the seller reduces the asking price of the home.
3. Most buyers find it extremely awkward to negotiate or even to talk directly with sellers and therefore avoid FSBO properties. The real estate professional has been trained to overcome objections and negotiate a successful home sale transaction.
4. You have no way to screen the home buyers who call and want to see your home. You may be compromising the safety of your family.
5. If you use a Lawyer to help you negotiate the real estate offer, then your Lawyer’s fees will be considerably higher.
6. You only pay the commission to the real estate broker if they successfully sell your house at the price acceptable to you. During the marketing time, the real estate broker absorbs the marketing costs, not the seller.
7. Accepting an offer for your home is one thing, ensuring a safe and successful closing of a real estate transaction is quite another. Real estate transactions sometimes have problems to be resolved near the closing. This is the time that your experienced real estate professional can be the most helpful by acting as a great mediator. Lawyers MUST act only on their client’s instructions, they can negotiate for the seller, but, the seller will be billed for all time spent on the negotiation process. Where if a listing agent is used the negotiation process is covered in the commission that is paid.
If you decide to sell your home yourself, without the assistance of a real estate agent, you can save the commission maybe. However, make sure you know what you’re getting into first. Learn about what the process entails, whether it’s a good idea for your situation, and where to get help if you do decide to go it alone. Above all, get to know the market well enough that you don’t end up selling the home for less than it’s worth, or not selling at all because it was overpriced.
What Are Some Of The Tasks Involved in Selling a Home?
The closer you look, the more little tasks are revealed as crucial in preparing, marketing, and successfully selling your home. The most important tasks that a real estate agent will normally perform for you include but are not limited to those listed below, but you will now need to do all these, including those not listed.
1) Evaluating the local market and finding comparable home values.
2) Suggesting an appropriate listing price.
3) Finding someone to advising you on how best to present your home, including providing referrals to painters, repair persons, and more.
4) Helping coordinate preparation of disclosure’s and other needed and required forms and documents.
5) Creating advertising materials and arranging for photographs (interior and exterior, hopefully done by a professional) and a floor plan.
6) Placing ads on the Multiple Listing Service (MLS if the MLS allows a non-member to do this) and in other media, like Facebook, Twitter, and syndication to other media to potentially interest buyers in your home.
7) Arranging for individual visits to the property — if you’re no longer living there, most likely by providing a lockbox for use by other realtors, and making arrangements to meet with individuals who don’t yet have their own agent, and deciding how you will handle agents that want to show and possibly sell your home. How you will handle compensation of the selling agent(agents have the ability to find FSBO homes).
8) Answering questions and providing documents such as disclosure packets to potentially interested buyers and their agents.
9) Holding one or more open houses, possibly including weekday open houses for other real estate brokers to visit and weekend open houses for the public (which itself involves many tasks, such as arranging for and putting out signs in advance, and providing food for the broker’s open houses, as is traditional in some areas).
10) Receiving offers to buy your house, whether via email/mail or in person if other agents wish to formally present their offer.
11) Helping you evaluate the strength of each offer and strategize on issues like whether to accept or reject an offer outright or make a counteroffer, and whether to also look for or arrange a backup offer.
12) Negotiate with the buyer’s agent until the purchase contract is complete (although this task may fall more to an attorney in states where legal help is required).
13) Select a title company/attorney to handle receipt of the escrow money deposit and the closing
14) Coordinate with the buyer’s agent throughout the escrow period, helping to make the house available for inspections and appraisals and make sure you’re doing your part to close the deal.
15) Help you strategize over requests made while in escrow, such as for a reduction in purchase price due to repair issues revealed in the inspection, or worse yet finding out the home did not appraise, and negotiating such issues with the buyer’s agent (unless any attorneys are still involved).
16) Attend the closing.
17) Before all of this needs to be completed you will need to determine the process in determining that the buyer is qualified. Because if they are not qualified your home will have been off the market for a period of time, and in that time a qualified buyer was missed.
Sound Like A Lot?
Indeed, it can be a full-time, nights and weekends job in the days and weeks while your house is on the market. And, as any agent will tell you, it’s not all glamorous. Some have been known to get out a mop and give a house a last scrubbing before the open house (but don’t count on this!) or drag their own furniture over if it will make the house look better, will not happen.
For Sale By Owner
Selling a house without an agent is called a FSBO (pronounced “fizzbo”) — For Sale By Owner. As you might have already guessed, people who try it usually develop some appreciation for how agents earn their commission and why they will never do it again. If you want to go it alone, be sure you have the time, energy, and ability to handle all the details.
Disadvantages’ Of Selling A House On Your Own
1) You must rely on your own instincts
2) All marketing and advertising costs are on your own, which can be an expensive proposition
3) Unless you pay to have your listing included,(Not All MLS’s will allow it as you are not a member of the MLS) you will not have access to the MLS – the Multiple Listing Service as well as access to the international multiple listing service which will give access to international buyers to view your property and syndication services.
4) Without all the tools in your hand, you may under price or over price the house. Knowing how much your home can be worth in today’s market is one of the first steps in beginning to market your house properly.
5) If you are not skilled in negotiation, you may leave money on the table.
6) All of the paperwork, legal forms, etc are your responsibility and must be handled by you.
7) If you want maximum benefit to your efforts, your free time will be somewhat or severely limited.
8) Many buyers believe that if you are selling on your own and not paying a commission, it is they (the buyers) who should get the savings – not you.
9) As you approach negotiations, you must sever emotional ties with your property or you will be at a distinct disadvantage.
10) The most important consideration is if you DO NOT know the laws with respect to the “Civil Rights Act of 1964” or “Federal Fair Housing Act” you could end up with more trouble and costs then what you want.