Some homeowners consider trying to sell their home on their own, known in the industry as a For Sale by Owner (FSBO). We think there are several reasons this might not be a good idea for the vast majority of sellers.
Here are five of our reasons:
1. There Are Too Many People to Negotiate With
Here is a list of some of the people with whom you must be prepared to negotiate if you decide to FSBO.
§ The buyer who wants the best deal possible
§ The buyer’s agent who solely represents the best interest of the buyer
§ The buyer’s attorney (in some parts of the country)
§ The home inspection companies which work for the buyer and will almost always find some problems with the house
§ The appraiser if there is a question of value
§ Your bank in the case of a short sale
2. Exposure to Perspective Purchasers
Recent studies have shown that 92% of buyers search online for a home. That is in comparison to only 28% looking at print newspaper ads. Most real estate agents have an internet strategy to promote the sale of your home. Do you?
3. Results Come from the Internet
Where do buyers find the home they actually purchased?
§ 43% on the internet
§ 9% from a yard sign
§ 1% from newspapers
The days of selling your house by just putting up a sign and putting it in the paper are long gone. Having a strong internet strategy is crucial.
4. FSBOing has Become More and More Difficult
The paperwork involved in selling and buying a home has increased dramatically as industry disclosures and regulations have become mandatory. This is one of the reasons that the percentage of people FSBOing has dropped from 19% to 9% over the last 20+ years.
5. You Net More Money when Using an Agent
Many homeowners believe that they will save the real estate commission by selling on their own. Realize that the main reason buyers look at FSBOs is because they also believe they can save the real commission. The seller and buyer can’t both save the commission.
Studies have shown that the typical house sold by the homeowner sells for $184,000 while the typical house sold by an agent sells for $230,000. This doesn’t mean that an agent can get $46,000 more for your home as studies have shown that people are more likely to FSBO in markets with lower price points. However, it does show that selling on your own might not make sense.
Before you decide to take on the challenges of selling your house on your own, sit with a real estate professional in your marketplace and see what they have to offer.
We are often asked if it makes sense to hire a real estate professional when buying or selling a home. We always emphatically answer – YES!
Here are five reasons why:
An agent will help with all disclosures and paperwork necessary in today’s heavily regulated environment. This helps remove much of the liability a buyer or seller could face.
Navigating today’s real estate and mortgage processes can be like walking through a minefield of challenges. Real estate professionals are well educated in and experienced with the entire sales process.
Negotiating such a large financial transaction can get tricky. Agents act as a ‘buffer’ in negotiations with all parties throughout the entire transaction.
Real estate professionals help buyers and sellers understand the true real estate value of a property in today’s market. This is crucial when setting the price on a listing or on an offer to purchase.
UNDERSTANDING OF CURRENT MARKET CONDITIONS
There is a plethora of housing information available today. The challenge is that some information appears to be in direct conflict with other pieces of information. A true real estate professional can simply and effectively explain today’s real estate headlines and decipher what they mean to you.
You have decided to sell your house. You begin to interview potential real estate agents to help you through the process. You need someone you trust enough to:
1. Set the market value on possibly the largest asset your family owns (your home)
2. Set the time schedule for the successful liquidation of that asset
3. Set the fee for the services required to liquidate that asset
An agent must be concerned first and foremost about you and your family in order to garner that degree of trust. Make sure this is the case.
Be careful if the agent you are interviewing begins the interview by:
- Bragging about their success
- Bragging about their company’s success
An agent’s success and the success of their company can be important considerations when deciding on the right real estate professional to represent you in the sale of the house. However, you first need to know they care about what you need and what you expect from the sale. If the agent is not interested in first establishing your needs, how successful they may seem is much less important.
Look for someone with the ‘heart of a teacher’ who comes in prepared well enough to explain the current real estate market and patient enough to take the time to show how it may impact the sale of your home. Not someone only interested in trying to sell you on how great they are.
You have many agents from which to choose. Pick someone who truly cares.
Now that the housing market has stabilized, more and more homeowners are considering moving up to the home they have always dreamed of. Prices are still below those of a few years ago and interest rates are still below 5%.
However, sellers should realize that waiting to make the move while mortgage rates are increasing probably doesn’t make sense. As rates increase, the price of the house you can buy will decrease. Look at the chart above detailing this point.
Remax DFW Only Has 358 Active Listings
Four years ago our company averaged 1,400 active listings, and that monthly number would drop to 1,100 during each year’s holidays. As the market has changed from a buyer’s market to a seller’s market, the number of active listings has plunged. Our current listing count is 35% less than one year ago for the start of the new year. Listings sell within hours of activation. Will this change in 2014? Call me to discuss. If you would like to register to receive up-to-date market information for your neighborhood, log into www.YourHomesValueFREE.com and you will automatically receive the information.