Many people are currently in the process of deciding whether to put their home for sale on the market. With the growing number of people making this huge decision, there are an equal number of reasons for selling. Living rurally with the price of gas at it's peak, possible foreclosure, growing family/small house, looking to downsize, the list goes on an on. The big question looms for many sellers: Do I put the home on the market with a Realtor or do I try to sell it on my own? The decision should be thought through very carefully. Some sellers opt to be a "FSBO", short for "For Sale By Owner". Reasons for doing seem very obvious- If I sell the home on my own, I do not have to pay a real estate commission. In itself, this sounds like a very valid and reasonable solution. Can it be done effectively? Yes. Is it typically a quick and effective way to sell your home? No. Here are some facts that may help prepare you to make those decisions.
For Sale by Owner status will probably consist of you putting a sign in your yard with a home or cellular phone number. Some FSBOs will advertise on one of many websites, which usually lists For Sale by Owner homes, for a fee. Many FSBO's I know who got frustrated with the process and eventually ended up listing and selling their homes with an agent expressed to me that they expected people to beat their door down trying to buy the home as soon as the sign hit the front yard or that ad got out there, but in reality, were extremely dissappointed with the number of responses from prospective buyers. This is the main reason why approximately 80% of FSBO sellers eventually enlist the help of a professional Realtor to assist them in selling their home. I also hear from dismayed private home sellers that selling their home was like having a second full time job. Sellers would run home and take time off work to excitedly show their home to a buyer, only to find that they wasted to their time with a buyer who was not really serious about buying, couldn't be approved for a loan, was looking for a "steal" of a deal and wanted to offer really low, or simply was not interested in the home for whatever reason. For a working home owner or busy parent, it is not always especially convenient to show your home, answer phone calls or gather/distribute information pertaining to it. FSBO sellers have also complained to me that people sometimes just stop by and knock on the door unexpectedly, wanting to see the home in it's current condition, with no advanced warning. Often times, the cost of selling the home on your own is overshadowed by the commissions you would pay out. Before going "For Sale By Owner", ask yourself these questions:
1) Am I aware of all of the legal documentation and proper verbiage to sell my house on my own? How do I get and how do I know if I have all of the proper paperwork to make the sale legal?
2) How do I go about picking the right title company to ensure clear and marketable title for my home and what are the costs associated with that?
3) Do I have the time to answer calls, show my home on (hopefully) a regular basis to prospective buyers at often inconvenient times?
4) Should I have a home inspection and an appraisal done on my property before putting it on the market and if so, what are the costs associated with that?
5) What happens if the buyer backs out and does not consummate the sale? Will I have any legal protection if the buyer sues me in court after the sale?
6) How do I know I am listing my home at the right price- Not overpricing it and not selling it for less than market value?
7) Will I truly be saving the commission on the home by selling it myself?
Selling your home with a Realtor truly simplifies the process for you. Most buyers out there, when seeking a home, go to a Realtor first, because they know they can get a professional to "go to bat" for them for free, as the buyers know they do not pay the commissions, the sellers do. I know very few buyers who feel comfortable approaching a FSBO seller, as they want professional representation. Often the buyers feel that they may know less about a homes value than the seller does and do not want to pay too much or negotiate with someone who may know more about the process than they do. As a Realtor, when I obtain a new buyer, I listen to their wants and needs in a home, then do a thorough search of the MLS to find homes that match their criteria, as they described to me. I present the MLS sheets of available homes to the buyers and they choose the ones to look at to potentially buy. If your home is a FSBO and not for sale on the MLS, it is not even in the buyers list of options and for all practical purposes, is "off the market" to them. Remember, most buyers are not "pros" at this and feel much better having a professional represent them when it comes to their big investment.
Realtors are trained in negotiating skills. They know the market, property values and can give you their best professional opinion on pricing your home, tips on preparing your home to sell (see my blog next week about this!) and taking care of all of the details for you. Your home will be available to all of the buyers on the MLS, a highly visible sign will go in your yard and all of the showings, phone calls and paperwork will be done for you. A quality Realtor will have, host and advertise open house events, regular showings (freeing up your schedule), advertise your home in various media, and hopefully have a good, established website that will entice buyers to your home. Your Realtor can be counted on to provide a full sellers net sheet to show you exactly what your "bottom line" dollar amount will be at the closing table before you agree on a price with a buyer. Real Estate brokerages also carry generally at least $1,000,000 in Errors and Omissions insurance for the occasional legal glitch. As a FSBO, you could be left "hanging in the wind". Your Realtor can recommend a variety of home inspectors, appraisers, title companies and even a good plumber or roofing expert, if needed.
In conclusion, Realtors are trained professionals who do this for a living. Sellers agents are committed to selling your home for the greatest amount of money in the shortest time possible, minimizing the stress and making the whole process as easy and enjoyable as possible. Hopefully this will assist you in making a more informed decision about selling your home, whichever route you choose. Feel free to give me a call and I will be willing to consult with you at no obligation on how to prepare your home to sell and some insight on your homes value. Really! No pressure. I promise! I'll see you at the closing table! :)
The author, Randy A. Vredenburg, is a Realtor with Century 21 McCoy in Traverse City, MI. He can be reached by phone at 231.313.0658, by email at REORandy@gmail.com or on his website, www.realestatetraversecitymichigan.com |