Kitchen Table Real Estate:
Should I use an agent to sell my house or do it myself?
For Sale By Owner (FSBO): Trying to sell your home yourself may look like a great way to save thousands of dollars, but is it worth it? Let’s have a closer look to help you decide.
You might be tempted to want to sell your home yourself and save the real estate agent commission, which is, for a $250,000 house, around $15,000. While tempting to do it alone, you should know the risk may outweigh the benefits. And ultimately, not having the experience to navigate the legal part, you may end up in a lawsuit costing you more than the commission you wanted to save. I would never blame an owner for trying to save money by selling his house alone. Just be sure you realize that selling a home by yourself is a lot harder than you think. With no experience with such a complex and emotional transaction, it's easy for first-time home sellers to make mistakes that could cost them tens of thousands of dollars.
For some homeowners, however, the process may be more straightforward. Perhaps they have experience and have sold a home in the past, they know what to expect and are prepared.
If you have the time and are willing to take the risk, you will find here some valuable information to help you with your FSBO transaction.
Know your market: Asking the right price is critical for a successful transaction. Knowing what similar homes have sold for and what is for sale is vital to price your home. Don't add an emotional value in the price of your house, be as neutral as possible. I’ve seen FSBOs sell for considerably less then what they could have gotten if represented by a Realtor. Most often due to pricing their home too high initially and then not understanding the contract and closing process.
Qualify your buyers: Almost everyone wants to buy a home. Do you know how to accept an offer from someone you don’t know? You could easily find yourself spending a lot of time showing your home to unqualified buyers. Before even showing your home, a Realtor will qualify the prospective buyer by finding out how much they can afford to spend, whether they are pre-approved for financing, and how fast they can move. According to the National Association of Realtors, 87 per cent of buyers purchased their home through a real estate agent.
Prepare your home: The physical condition and appearance of your home are the factors you have most control over and they can make a big difference in how fast or how much you sell your home for. If it needs repairs, fix it. Don’t give the buyer a reason to ask for a lower price. Make sure your house is sparkle clean, especially the bathroom. Make your home attractive to the broadest potential buyers. Neutrality is the key.
Take a good picture: If you can, hire a professional real estate photographer to showcase your home's best assets. Believe me, this is one of the most important investments when selling your home and you will recuperate every dollar and more.
Do not hide major problems: Having your home inspected before listing it is a good idea if you want to avoid costly surprises once the home is under contract. It will permit you to fix any significant problem ahead of time. Or at least disclose it in your Seller Property Information Statement. Otherwise, if it is uncovered during the buyer's inspection, the transaction may be delayed until you fix it, or you might have to lower your price or even lose the buyer altogether. If the problem is uncovered after the transaction is done, you may end up being sued.
The bottom line: It is best to be prepare mentally and financially for less than your ideal scenario. It might not be as easy as you think, and the risk might be more significant than you think. Remember, as an FSBO, you don't have to pay a commission to an agent. So, the potential buyer is looking to pay less for your home than a comparable home for sale by an agent.
This is a simplified explanation of the important points to give you an idea of what it is to sell your home yourself. There is much more to it and you should be fully prepared before attempting a financial transaction of such importance. If you have questions or would like to have advice, ask a professional. Your Realtor can help you find out how much your home would actually sell for in today’s market. Remember, there are no ''dumb questions'' in real estate.