Deciding to Sell By Owner
As a home owner, the decision to sell your home by owner or to hire an agent should be weighed carefully. Many home owners across the country have successfully sold their home, proving that it does not take a real estate a= gent to handle the job. Many other home owners have decided that the responsibilities and work involved are better left to a real estate agent. = As a home owner, you should consider the advantages and disadvantages to selling your own home before you invest any amount of time, money and energy into t= he process. Ultimately, though, the decision lies in answering this one questi= on: Am I willing and able to put in the time, energy, and money necessary to se= ll my home, or will I be better served by having a real estate agent handle it= for me?
One misconception that many home owners have about selling "by owner" is that they can simply stick up a sign, run a few ads and buye= rs will show up by the thousands. Worse yet, and I hear this from every other = FSBO (for sale by owner), are the sellers whose friends and neighbors planted a = sign and sold their home in six hours. Many sellers do not realize the amount of work, time and energy involved in saving a six percent commission. Remember this: Until you have sold the home, transferred ownership, and received a c= heck from the title company, you are a slave to buyers. This includes continual marketing to attract buyers, accommodating buyers to view the home, and wor= king with your buyer to close the transaction after you have a contract.
In the following sections, look at the advantages and disadvantages to selling your home. After reviewing those sections, take the FSBO Quiz to se= e if you are ready to sell your home "by owner".
FSBO Advantages
Not having to pay a six to seven percent real estate commission
Does not require a license = to sell your own home
Many professionals (real estate, mortgage, title, etc.) are willing to help out for free
FSBO Disadvantages
Do not have the ability to include home in the Multiple Listing Service (MLS)
Must buy your own yard sign=
Must create and print your = own sales flyers
Must pay for your own newsp= aper advertising
Must perform your own market analysis to properly price home
Must qualify your own buyer= s to make sure that they are financially capable of purchasing your home
Must be available for appointments during the week, evenings and weekends (which may conflict with your work schedule)
May have to give up weekend= s to hold open houses
Must make sure that the purchase contract is written to protect your best interests
Must make sure that the clo= sing process goes smoothly...coordinating everything from appraisals, termite inspections, making sure that the buyer is fully qualified, etc.
This is only a partial list of most of the advantages and disadvantag= es. The intention is not to convince you that you cannot sell your own home...y= ou can. However, you must be willing to accept certain liabilities and responsibilities that most real estate agents assume when selling a home. M= ost importantly, remember that even though you may not be paying a six percent = real estate commission, you are still working for it yourself.
Most real estate agents, on the other hand, will handle many of the f= iner details of the process. These details include the marketing, negotiating and closing of the sale. Agents will make sure that the termite report is order= ed or that the buyer is pre-qualified for a mortgage before an offer is presen= ted. An agent will be available to show your home on a moments notice or while y= ou are at work. He or she will continuously market your home, be there to answ= er the phone if someone calls with questions, and is often more flexible to accommodate a potential buyer. More importantly, your real estate agent will work on your behalf with your interests in mind.
In addition, many buyers prefer to work with agents rather than proceeding on their own. Buyers recognize the benefits of having a real est= ate agent represent their best interests, especially when it will not cost them= a dime. By not considering to pay a partial commission to a buyer's agent, you may be excluding a large portion of potential buyers from purchasing your h= ome.
Before making the decision, ask yourself the following questions:
FSBO Quiz
Do I have a clear understan= ding of the home selling process from start to finish?
Do I have a clearly underst= and the paperwork involved in the transaction?
Do I feel I can price my ho= me effectively for my area?
Do I have the time and mone= y to prepare my home for sale (including any renovations or costly fixes that I = may have to do)?
Do I know what needs to be = done to prepare my home for the market? Do I really need to fix this or repair t= hat? And if I don't, will it hurt my chances of selling my home?
Am I ready to spend the necessary money to buy signs and pay for advertising to sell?
Do I know where and how to advertise my home?
Am I able to create and pri= nt sales flyers for my home?
Am I able to effectively sh= ow my home when I receive phone calls for appointments, even during the week, evenings and weekends?
Will I be out of town a lot; and if so, will I have to take my home off the market while I am gone?
Am I willing and able to gi= ve up my weekends for open houses?
Am I comfortable in showing= my home to strangers?
Do I know what I need to disclose to potential buyers?
Do I know what to do if I receive an offer?
Do I know if a buyer is ser= ious or trying take advantage of me?
Do I know how to overcome a= ny objections when negotiating the sale?
Am I able to screen potenti= al buyers? Do I know where to send them for a loan?
Do I know when I have to gi= ve back earnest money deposits?
Do I understand the loan process?
What do I do if the buyer w= ants me to pick up closing costs and the lender says I have to?
What if the appraisal comes= in below the sales price?
Do I need title insurance? =
Do I need a lawyer?
Do I need to order a termite inspection? Roof inspection? Home inspection? Do I have time available duri= ng the week to be home for these inspections?
Am I financially able or willing to fix any repairs noted by the buyer or the buyer's home inspector= ?
What if the buyer refuses to close or sign the final paperwork?
What if the buyer does not qualify after a month into the closing process?
Am I willing to commit a mo= nth, three months, six months, etc. to selling my home or is this something that= I want to try for a weekend or two to see if it sells?
Would someone else hire me = to sell their home?
Obviously there are questions here that you may agree with and questi= ons that you hope you won't have to answer. The key to deciding if you should s= ell your home by owner or not is this: Am I willing to make the commitment to s= ell my home and expect the same from myself that I would from a real estate age= nt?
It is probably better to hire a real estate agent when you are not willing to pursue the process 100%. When your schedule does not allow you t= he flexibility to market your home, when you travel frequently, and when you f= ear the fact that you will have to allow complete strangers into your home, the entirety of the ordeal can become very cumbersome and counterproductive. Why spend the money and waste your time when you have so many factors working a= gainst you? It will only cost you more money and time in the long run.
If you are dead set against hiring an agent to sell your home, consid= er offering to pay a buyer's agent to bring you a buyer for your home. The standard fee, also known as a co-brokerage fee or co-broke for short, is th= ree percent of the sales price of your home. Anything less than this will not attract the attention of a buyer's agent and even if the agent agrees to a smaller fee, it is likely that he or she will be more difficult to work wit= h, especially if a problem arises.
As you decide whether or not to sell your home yourself, the best adv= ice is this: Hire the person who is willing to put in the time and the energy t= hat you expect and want from someone who is selling your home--whether it is yourself or a real estate agent.