For Sale By Owner – Gee What Could Go Wrong?
The Challenges of Selling Your Home By Yourself
For Sale By Owner (FSBO)
Selling your home by yourself, also known as For Sale By Owner (FSBO), might seem like a great way to save money. However, the process is not as simple as it may seem. It requires a significant amount of time, knowledge, and effort. Here are some of the challenges you might face when selling your home without the help of a real estate agent.
Understanding the Market
The real estate market is complex and constantly changing. Understanding the current market conditions, including the prices of similar homes in your area, is crucial to setting a competitive price for your home. Overpricing your home can lead to it sitting on the market for a long time, while underpricing it can result in a loss of potential profit. Real estate agents have the experience and tools to accurately price your home based on current market conditions.
Marketing Your Home
Marketing is a crucial aspect of selling a home. It involves more than just putting a sign in your yard and listing your home in the newspaper. In today’s digital age, online marketing is essential. According to various sources, 90% of all buyers start their search online. Therefore, having your home listed on multiple online platforms increases its visibility and the chances of finding a buyer. Real estate agents have access to multiple listing services and other marketing tools that you might not have as an individual seller.
Handling Negotiations and Contracts
Once you receive an offer, negotiating the terms and handling the contracts can be challenging. Real estate contracts are complex and require a thorough understanding to ensure your interests are protected. Furthermore, negotiations can be emotionally charged, especially when you are personally attached to the home you are selling. Real estate agents are skilled negotiators and are familiar with the intricacies of real estate contracts.
Screening Potential Buyers
When you list your home for sale, you will likely receive inquiries from a variety of potential buyers. Screening these buyers to determine their seriousness and financial capability is important. Inviting strangers into your home can also pose safety risks. Real estate agents typically screen potential buyers before showing your home.
Dealing with Inspections and Appraisals
Once your home is under contract, it will need to go through inspections and an appraisal. Understanding these processes and dealing with any issues that arise can be stressful and time-consuming. Real estate agents are familiar with these processes and can guide you through them.
For Sale By Owner
While selling your home by yourself can save you the cost of a real estate commission, it also comes with its own set of challenges. Before deciding to go the FSBO route, consider the time, effort, and knowledge required to sell a home. If you decide to work with a real estate agent, they can guide you through the process, making it smoother and less stressful.
So since writing this article just two weeks ago I came across a Raleigh NC Realtor’s blog with a post similar to mine. They had a very interesting statistic. One that I can not prove but found very interesting. They stated that 89% of all FSBO’s end up listing with Realtors. Again this is not a statistic i can confirm but it sounds pretty accurate. Most people do not understand the complexities of their property until they are faced with the complexities of a buyer that wants the facts. (end of update)
There are so many reasons (not just because i’m a Realtor) that you really don’t want to be a real estate broker on top of your full time job. So many people look at Realtors as if they are over paid and just not worth what they make. “I could be a Realtor” says everyone on the planet until they actually try it. Unfortunately too many people are realize way too late into the contract that they need help. I do this all day long 360 days a year. I attend classes more now than I did in college. I am multiple broker meetings every week talking about properties, the market and other challenges brokers are facing so when that unique challenge comes up on a property I know how to handle it.
One of problems a FSBO needs to face is that there is no buffer between them and there “baby” that they have spent weekends fixing up and making it their own. So when that buyer comes in and low balls the seller, the seller takes it personally. That makes for very bad business and makes it hard to negotiate with someone who insults your “baby”. As a broker I am very skilled in the art of negotiations. I also have the data and the tools to support whatever offer or price that is being discussed.
The other issue is exposure. If people can’t find your house you aren’t going to sell it. You also won’t get the best price (usually) if you don’t have a proper sampling of the market. In other words if you put a sign in your yard and put your home in the paper you will not get nearly as much traffic as if you listed it with a Realtor. This site you are reading this post on gets an amazing amount of traffic. I also put your listing on hundreds of other sites in our network that the normal consumer doesn’t have access to.
That brings us to the marketing cost and time. Again I push your property across the entire planet. I can promise you with 99.9% certainty that if I am your listing broker that anyone that searches the internet for a home with your parameters will find it on my site or one of my network sites. Then you have the issues of other forms of marketing. I know what works. I have spent and wasted enough money on different marketing tactics to know exactly what works and what doesn’t.
You can always list your house on Craigslist or other unregulated websites but when someone contacts you, how do you screen them? You just inviting some random you met through craigslist come and case…i’m sorry…view your home? I might be paranoid but that isn’t a risk I would want to take. Most Realtors and brokers screen buyers in one way or another. Also usually you aren’t personally home when we show your home. If safety is a factor for you at all then it is worth it for you to hire a real estate broker.
You would be shocked if you knew how important setting the right listing price is. Even in a sellers market you can’t over price your home. So you will need to go through price reductions. At that point you will need to change your price on all your marketing material and everywhere you posted your home. Turns into more time and more money and now you are lowering your price and getting less cash in the end. Worst yet what if you under priced your home and left money on the table? A Realtor such as myself spends a lot of time looking at houses, on line and in person. We price homes in our sleep. We can figure out the value of your home much easier and precise than you can. I AM TYPING THIS LOUD SO EVERYONE CAN HEAR. ZESTIMATES ARE NOT ACCURATE AT ALL. DO NOT USE THEM TO VALUE YOUR HOME (OR TO MAKE AN OFFER) .
Chances are you are going For Sale By Owner to save a little cash. Well let’s just say at the end of the day you might actually be out more than you think. Especially if you messed up on one of the many contracts and extensions through the life of your buy sell contract. You also are absolutely crazy to not offer a co op (commission to a buyer broker). And so you know that broker is not your friend. They are advocates for their buyers and not you. It is also most likely they know real estate a little better than you.
OK now that you got your house listed and marketed the hard part is over, right? Nope! The party is just getting started. Let’s say you are lucky enough to find the “sweet spot” pricing that the market is ready to make an offer. And someone does. Now what?
Are you familiar enough with real estate to know what the dates and deadlines mean? Do you know how word inclusions to insure you get the exact things you want to stay? Do you know exactly how long the buyer should have for title and lender deadlines? Do you know enough about contracts to be 100% sure that it won’t cost you 10’s or 100’s of thousands of dollars? Do you know what you need to do about the septic pumping and permitting?
There are too many reasons to write about FSBO’s VS Realtors that I can’t list them all. So in conclusion if you are planning on selling your house to save a few bucks, give me a call at 303-503-8793 so I can let you know the rest of the challenges you are going to face while selling your own home.