You may be thinking about selling a home yourself to avoid paying a real estate agent. Saving a commission is in fact, the biggest reason why homeowners attempt to sell for sale by owner. However, before you take that leap make sure you know the drawbacks and the benefits to the for sale by owner process.
There are some benefits to selling for sale by owner. When you sell your home yourself, you do not have to pay for the help of a real estate agent and since real estate agents can charge a percentage fee based on the sale price, you could save thousands of dollars by doing it yourself. Done deal, right? The trick is making the sale without a real estate agent a reality. One study has found that over 90% of sellers fail to sell their home on their own and end up hiring a real estate professional.
The Benefits
When you sell your home for sale by owner you will have complete control over the whole process. When you sell for sale by owner you are able to invest all your time and energy into marketing and showcasing the best of your home, because let’s face it, who knows your home better than you? This includes marketing on the web, showing your house to potential buyers early in the morning or late into the night, and answering any questions anyone might have. However, as great as this seems, the time and energy only goes as far as you. If you are at work, you are not able to answer questions or show your home during that time and might miss out on that one interested buyer who is ready to buy.
While there are many benefits to selling for sale by owner there are even more drawbacks.
The Drawbacks
Overpricing
While it may seem at the beginning that selling your home will be easy, most sellers soon realize how complex a real estate transaction can be starting from what the right asking price should be. To the average seller knowing the fair market value of a house would not be something they would know easily. Most sellers grow to have a deep attachment to their home and when looking at the price they end up over inflating due to perceived value. As a result, most FSBO homeowners end up overpricing their homes leading to more time on the market and less interested buyers.
When you hire a real estate professional they will already have a number for your house at their first initial visit because they have done their homework of doing a comparative market analysis, where they go through hundreds of listings and come up with a number that fairly represents your home.
Legalities & Complexities of the Real Estate Transaction
The real estate transaction is often filled with complex paperwork and legalities. A real estate agent is required by law to maintain a certain level of knowledge each year through continuing education that covers certain real estate matters like real estate laws and FINTRAC (Financial Transactions and Reports Analysis Centre of Canada).
It takes an agent years of education and in the field experience to understand how to work through complex real estate transactions, often working closely with real estate lawyers and other real estate professionals. The legalities of a large monetary transaction are usually something that you would not want to put in the hands of a novice. Using the incorrect form can not only slow down the transaction process but could ultimately lead to a lawsuit as most FSBO homeowners don’t know what type of information must be disclosed, correct paperwork and real estate terminology to be use and the correct timing and deadlines for submitting paperwork.
Lack of Networking & Proper Marketing
Real estate agents are constantly networking and exchanging information on properties. They have a large database of clients to which they can market and spread the word to regarding properties that match what they are looking for resulting in homes selling faster at a more competitive price. In addition they have the MLS which is a great tool to expose thousands of people to your home in a short amount of time.
Time vs. Money
You know what they say: Time is money.
While the one of the biggest benefits of selling your home FSBO is that you get to call the shots and do things at your own pace it can also be a drawback of your not consistent. You should also be realistic about how many hours will be absorbed by everything that goes along with selling your home yourself and if at the end the money received is worth the time spent.
When you hire a realtor here are some of the things that they take care of for you and if they cant they will find someone who will, taking the burden completely off the sellers:
- Marketing
- Setting up photographers, stagers, cleaners, etc.
- Researching your market
- Setting up showings
- Giving tours to prospective buyers
- Qualifying potential buyers
- Planning & hosting open houses
- Handling phone calls and answering questions from potential buyers and realtors
- Interviewing inspectors and lawyers
- Negotiating
If your still on the fence on whether sell your home for sale by own is a good idea, CALL US TODAY to discuss!
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