For Sale By Owner – Is this Right for Me?
Without a doubt, you can save considerable dollars in commission by selling without an agent, and for a select few, this approach does makes total sense. However, the commission is only one part of the equation.
To help you make an informed decision evaluating whether being a “For Sale By Owner” is right for you, consider the following.
While you may save on the commission, you can also lose tens of thousands of dollars on your NET bottom line.
You may lose money by
- accepting too low a price,
- missing an opportunity for multiple offers and negotiating an even higher price and more favorable terms,
- suboptimal terms,
- avoidable, unnecessary or overpaying for contractual repairs,
- low appraisal and subsequent ramifications,
- paying more in fees than needed,
- failing to mitigate risk at multiple points during the sale
The only real reason to sell privately is to save losing money with the wrong agent.
If you can’t find a professional real estate agent who can net the same or more than you would be able to, and you have the time and skills, then selling yourself makes sense. For most people however, the end result is netting less money, frustration, lost time and in over 89% of For Sale By Owners, hiring a professional real estate agent.
Buyers are also trying to save on the commission / price
Buyers know that when you are representing yourself that you aren’t paying a commission and as a result, they want to pay less for the home. Most buyers also know that appraisers include commission in fair market value and assume that they can deduct that amount from the amount they appraise the house to be worth. The buyer feels justified in doing so, because they went through all the trouble of finding the seller’s property the hard way – that is by studying classified ads, surfing the Internet, making appointments, driving around, and so on.
Your bottom line
Based on a National Association of REALTORS Profile of Home Buyers and Sellers, the typical For Sale By Owner sold their home for 8.37% less when compared with a skilled real estate professional. The questions is, will you really be saving yourself money, or costing yourself money?
Selling a home in California can be a complex legal process, and there is a lot of paperwork that needs to be completed, signed, and filed properly. While showing the home and hosting an open house by yourself are relatively easy to do, legal aspects of the home selling process can be complicated for the inexperienced.
Inexperience may not be the best way to keep you out of harms way in a very litigious state.
Tricks Of The Trade
Do you have the experience and knowledge to know the right thing to say to prospective buyers, how to get more qualified buyers to view your home, and then to maximize your position once an offer is received while ensuring you have a qualified buyer. It’s the practical knowledge and expertise that makes it possible for skilled agents such as ourselves to sell a house for more money and with a lot less stress for the owner.
A Matter Of Time
Selling a home is time consuming. Here are some questions to consider:
- Are you confident about setting the price?
- Do you understand the paperwork requirements?
- Do you have a solid plan for attracting potential buyers?
- Can you leave work to show the home during the day?
- Can you accommodate people who want to see the house on weekends or other odd hours?
- Can you spend the good part of a day preparing for and hosting an open house?
- Are you confident about ensuring the eventual buyer is qualified to purchase your home or if need be, helping the buyer obtain financing?
- Are you confident and knowledeable about negotiating the terms of a contract?
- Do you know who pays for what so that you’re not taken advantage of?
- Do you know what to do if the home doesn’t appraise?
- Do you know how to minimize the risk of any potential post sale litigation?
Lastly, give thought to the time commitment that is involved in being your own agent, and be realistic about your abilities. The old adage of “You don’t know what you don’t know” couldn’t be more true when it comes to the ever changing field of real estate.
If you have questions at anytime, you’re welcome to call us.