It's a natural question to ask Everyone has seen the sign "For Sale By Owner," so it's clear that some homeowners do try to sell their own property. It's also clear they don't have to pay the real estate agent's commission on such sales.
How much work and risk are involved in these sales by homeowners often isn't so clear. And whether the price received is high enough to make the savings on commission a real savings is also open to doubt.
It's just because real estate marketing and the negotiation of real estate sales are so complex that real estate agents exist in large numbers and must undertake rigorous training and qualification before they can be awarded their licenses.
So, if you're a homeowner who is wondering whether it's worthwhile for you to put up your own "For Sale By Owner" sign, we believe it would be helpful to you to consider the following questions before coming to a final decision.
What's the Right Price?
It's the price that's "in line" with equivalent property in the same and comparable neighborhoods. If you don't have a great deal of up-to date statistics on current actual sales, you may sell for less than market. Or, sometimes worse in the end, you may overprice your home, resulting in no buyer interest for many months. Eventually, you might be forced to cut the price severely to attract potential buyers.
If you have lived in your house for many years, it's natural that you might tend to undervalue, because the last price paid was in a time of much lower prices. Conversely, some longtime owners, understandably fond of the house that has served them so well, will tend to build sentiment into the value, leading to overpricing.
A competent real estate agent will provide accurate and up-to-date price comparisons, helping the owner to establish a realistic asking price that enhances the chance of sale at the true market value of the property.
How Do You Attract and Screen Buyers?
Most homeowners can afford only a fraction of the advertising that real estate agencies can place. Nor will a small advertisement attract the attention that professionally placed larger display advertisements can. Fewer prospects mean that the average wait for a sale is much longer for the owner who handles the sale himself. Fewer prospects can also mean a lower price.
Another disadvantage to the homeowner is that multiple listing and referral services frequently used by agents are not easily accessible to the "do it yourself" seller.
"For Sale By Owner" signs and advertisements are open invitations to the world at large to come through your home You will probably find it difficult to screen prospective buyers, or to regulate the hours when strangers will call or drop in from the street.
For every home, there is a buyer, if it's priced right. But for every "For Sale By Owner" sign, there is a multitude of people who have made selling a home a nightmare for owners.
How Are You Going to Make the Sale?
There is a certain moment in the sale process that demands a special kind of sensitivity. That's the moment when the buyer is pretty sure that he or she wants to buy your home, and needs just the right encouragement to make a positive decision.
There are many signs that you should be able to recognize. Strange as it may seem, this is the time when the buyer starts voicing objections that would lead you to think he or she is not interested at all. The inexperienced seller often makes the mistake of taking this at face value and ending the discussion. The experienced real estate professional realizes that the time is right to come to an agreement and has the skills necessary to close the sale on an amicable basis.
After You've Made the Sale, What Then?
Your job isn't over yet. Appropriate deposits must be made. Financing must be arranged. Certain third parties must be brought in. And a vast amount of paperwork must be completed. The potential for costly errors at this stage of the transaction is considerable.
Make It Easy on Yourself.
You wouldn't be your own doctor. You wouldn't be your own lawyer. We hope we have given you enough good reasons not to be your own real estate agent.
Selling your home? For every good reason, it makes sense to list with a real estate professional. We should know. We in the First American network have been working closely with real estate brokers and agents for a long time. We know how invaluable they are in any real estate transaction. They can save you time, money and disappointment.
To assist you in your decision, we've provided a homeowner's checklist If you can answer most of the questions "yes," it means that you may be capable of acting as your own professional real estate broker/agent. If not, we urge you to call your local real estate professional.
Homeowner's Checklist For Home Sale Capability
Am I capable of:
1 Setting the right selling price?
2 Creating and placing sufficient, effective advertising?
3 Grooming or improving my property so it will sell for more net money to me?
4 Screening potential buyers?
5 Protecting against undesirable callers?
6 Extracting an offer to purchase?
7 Negotiating objectively?
8 Making a "hard close?'
9 Negotiating financing alternatives?
10. Protecting myself in escrow?
11. Arranging sale terms for best tax effect?
12. Avoiding guarantees to buyer that will obligate me later?
13. Remaining in the house if it should not sell for a long time?