Monday, April 4, 2016 / by Kimo Quance
Are real estate agents going the route of the milkman?
With the housing market shaping up and the arrival of spring (a popular time for buying and selling homes), you'd think realtors would be over the moon.
But it just isn't so.
More sellers are going the For Sale By Owner route; an estimated 20% of home sales are handled by the homeowners themselves, with no help from a realtor. Thanks to a multitude of apps and online listing portals, it seems like it's easier (and cheaper) to list a home yourself.
But is it really the best option to try and sell your property without a real estate agent? If you're thinking of going the FSBO route, here are a few things you MUST do:
- Properly research the current housing market,
- Figure out the best ways to market the property to the ideal buyer,
- Writing up the listing and taking photographs,
- Thoroughly prepare the home, for showing,
- Learn basic real estate regulations and contracts (you may find you have to retain a lawyer to review the contract)
plus a hundred and one other things. Get any of them wrong and you'll find these mistakes will cost you the money you're trying to save.
Pros of Selling Your House Yourself
It's not all gloom and doom, it is possible to sell your own home. You “only” have to make sure you learn the process.
If you choose to go that route, here are some of the benefits of doing so:
- The most obvious benefit of selling without an agent is the percentage you save on agents fees (between 2.5% and 6%). Depending on your circumstances, the extra cash can go a long way.
- You maintain control over the entire process, from the type of pictures you use in listings to the negotiations with prospective buyers, the whole show. After all, who knows the house better than anyone & can sell all its positives best? You, that's who.
- You also avoid the time investment that goes into interviewing agents, and avoid the nightmare of potentially working with a pushy agent.
While these are nice benefits to be had, the truth remains that the average selling price of a home sold by an owner is up to 15% less than that sold by a realtor. When a private sale is made, the homeowner always walks away with less money than they could have made. Is cutting out the middleman really that profitable now?
Cons of Choosing the FSBO Route
The downsides of selling your home yourself outweigh any benefits you may imagine. Here are a few of them:
- First off, selling your home on your own is a lot of work! Professional realtors make it look so easy but getting from an idea to getting a signed contract involves a ton of effort.
- You still have to negotiate with a buyer's agent, and seeing that you are unrepresented, some will try to take advantage of that and lower the price further.
- The truth is 95% of FSBO hunters are out looking for a bargain. Do you notice how they always seem to offer just below your asking price? Between them and the buyer's agent looking to reduce the price further, can you even get your asking price?
- Do you really know how much your home is worth in the current market? While you may have a general idea, do you have access to industry data such as MLS sales data? Pricing your home just right is key to making any profit on the sale. As a homeowner, can you detach yourself from perceived value and put a real price on your home?
A good agent can.
Maybe if the stars aligned just right and you found yourself in a market that was just right and the home is in a desirable area; maybe, just maybe you can get the price you wanted. But that's such a rare occurrence, that it's almost not worth considering.
If you choose to save on commission and don't appreciate being at the mercy of someone else's timeline, you may go ahead and sell your home. But note that you risk selling at a lower price.
Do you really want to spend your time talking to buyers, running open homes, handling complex paperwork, legal fees?
If the stars align just right, maybe you can get the price you want, but is saving on the commission really worth the steep learning curve? From scheduling, to showings. From open houses to negotiations. From offers (and counter offers) to inspections and appraisal, the list of things you must know goes on and on.
The demand on your time, coupled with the possible legal and financial risks, makes private sales a very risky endeavor.
If you value your time, and want to get the best price for the home, it's time to list it with an agent. Sure, they'll take their commission, but they are saving you time and effort. Real estate agents are the specialists and know where (and how) to list your home, set it up to appeal to prospective buyers; plus they have access to industry resources, contacts etc. An estimated 93% of home sales involve an agent to some degree. Let's face selling your home for the price you want isn't as cut and dried as reality shows make it seem.
Ready to work with a team that is as motivated as you are? Contact the Quance Group today and let's discuss how we can help you get the best price for your property, while making the process as hassle free as possible.
Contact us on 619.324.5397 today.