In this DIY (Do It Yourself) age, it is no surprise that many consider selling their home on their own when they are ready for a move. There can be some great benefits – lower cost; more control; a chance to “test the waters” – but there are many pitfalls too. In the US, For Sale By Owner (“FSBO”) transactions accounted for 10% of home sales in 2011 but sold for considerably less (up to 25%) on average than agent-assisted home sales. Other than the possibility of a lower selling price, consider the following if you are thinking about listing your home on your own:
Time and effort involved
Roll up your sleeves and prepare to spend significant time preparing your home, researching the market, developing sales strategies and marketing materials, answering calls, showing your home, and eventually managing negotiations and paperwork. Realtors have well developed tools at hand and typically have a team of resources to count on, including front office staff that may be available 24 hours a day. It all looks easy, but the work is surprisingly detailed and complex and mistakes can be expensive.
Pricing it right
Pricing correctly can be a challenge for anyone, but when you are emotionally attached to a property, it can be even more so. Too low and buyers may be suspicious; too high and your property will sit while others around you sell. Realtors rely on current and historic market data along with industry and marketing experience to help establish the right price for a motivated seller. The right price for a well-staged home can have a significant effect on attracting a high number of qualified buyers; and that leads to a sale.
Legal and financial implications
How much should you disclose about that leak or buried wiring? What about the well and septic system? The insight and paperwork involved in putting together a secure and binding sale agreement that protects both parties is considerable. Professional Realtors, their Associations, and their Brokers have the training and experience required to identify potential issues along with developed contract language to help ensure your interests are secure. Major problems that are not visible and remain undisclosed can lead to litigation and other costly consequences. Missing clauses in a contract can have the same costly effect.
Needless to say, there are many FSBO success stories, however, we have all seen FSBO signs that linger on a front yard for what seems like months before being replaced by a Realtor’s sign. If you have time on your hands and want to “test” the market, a FSBO strategy may work for you. But if you are a motivated seller with a deadline and top dollar in mind, then perhaps a Realtor is your best bet. I have worked with more than one FSBO client who was exasperated with the process – “… never again!”
Written by Thom Gallagher