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You may be tempted to try and sell your home yourself. The basic reason that motivates owners is "saving" the cost of the real estate commission. A few might deem it a personal challenge or learning experience, but generally the desire to save money is the main motivator. Unfortunately, this may turn into an expensive illusion.
The following remarks are not intended to dissuade you from attempting to sell your own home, but to place the process in realistic perspective. In the end, you will have to balance the benefits and disadvantages, and decide what is best for you.
Full Asking-price Offers Highly Unlikely
It is common on For Sale By Owner properties for the prospective purchaser to automatically reduce their asking price by the amount of the real estate commission the seller avoided paying. The main reason why prospective buyers are attracted to FSBOs is the prospect of getting a better deal than if the property is listed with a Realtor.
When working with a Realtor, the seller normally pays the commission, and most buyers will already be working with a real estate agent. If you are planning to sell your own home to avoid paying a commission, you are greatly reducing any incentive for buyers' agents to show your home to their clients. This further reduces the number of prospective buyers for your property.
Difficulty Setting the Right Price
You may not have a clear or objective idea of what similar properties in your area are selling for, or the status of the real estate market at that point in time. This can place you at a distinct disadvantage. For example, if you are being unrealistic in your pricing, along with limited advertising exposure, you could literally price yourself out of the market. Prospective purchasers may not even look, let alone make an offer. You may eventually sell your property, but only after several price reductions and after a long period of time. Naturally, this depends on the market and the nature of your property. Conversely, you could have a property with unique features or investment potential that could justify a higher sale price than you might be asking.
You may be inexperienced in applying real estate negotiating skills; or you may be up against a buyer who is an experienced closer. If you have ever been to a time-share presentation while on vacation, you have experienced talented closers. Unfortunately, they are looking to get the best deal for themselves. Who will look after your interests?
Lack of Professional Guidance
If you do not know all the steps involved, from the pre-sale procedures and strategies to completing the deal and receiving the money, you could and probably would make mistakes that could be very costly. You may also lack any negotiation or sales skills, and feel very uncomfortable or anxious. As a consequence, the price and terms you eventually settle for may not be as attractive as they could be when a professional handles the transaction.
Significant Time Commitment
You have to have open houses as well as show your property at times that may not be convenient for you. You may lose a sale because you are not at home. Additionally, you will be spending time writing ads, printing expensive brochures, and responding to e-mails and letters. If you don't answer the e-mails in a timely manner or in the right way, you may lose the prospective buyer's interest. Your social life will be limited because you'll be staying at home to respond to telephone calls or to people knocking on the door.
Advertising Issues
You have to pay for newspaper/Internet advertising, and for a yard sign. In addition, you may not know what type of advertising would be appropriate for your property. I know how to write ads that will emphasize the key selling features of your property, and attract and hold the attention of a prospective buyer.
There are considerable differences in market exposure in terms of doing your advertising yourself and the advertising and promotion I will do for you. Limited market exposure means limited prospective buyers. This often results in a lower final price. Contact me for a custom-made marketing plan for your home.
Legal problems
The prospective purchaser may supply you with his own agreement of purchase and sale. This contract may have clauses and other terms in it that could be legally risky, unenforceable, unfair, or otherwise detrimental to you. In addition, you can end up agreeing to terms when it is not necessary or wise, or to accept a legal arrangement that could be risky. I have the experience to recognize these potential problems or risks for you.
No Pre-screening of Potential Buyers
Sellers in For Sale By Owner situations often do not know how to pre-screen prospects. The end result is that you could waste your time talking to people on the phone or showing them through the house, and they are not and never will be serious buyers. You could also end up accepting an offer from someone who does not realistically have a chance of paying for the house, or a buyer who asks for unrealistic time periods to conclude the transaction. Accepting an offer from an unqualified buyer would tie up your property during that time, and you would have to start over if the deal falls through.
Emotional Roller Coaster
Many people tend to get emotionally involved in the sale process of their home due to direct interaction with prospective buyers. Sellers can experience anger and frustration due to rejection of the house, negative comments or fault-finding. You may find people whose personality you don't like, or people who negotiate unreasonably on the price. Negative criticisms can sometimes be taken personally, and be a cause of considerable stress.
Conclusion
Buyers in this type of market are very price sensitive, negotiate toughly because they want the best deal, and have the time to be selective after comparing what is available in the market. You are at a disadvantage if you don't receive all the exposure possible and use all the negotiating and selling skills available.
As you see, there are distinct advantages to utilizing the services and skills of a professionally trained Realtor. I hope that you will choose me, but if you don't, and decide to sell your house yourself, read a book, take a course, be smart, and be safe!
