Planning to Sell Your Home Alone?
Read This First!
The maga-hit movie "Home Alone" featured some hilarious traps for unsuspecting bad guys. Selling a home alone has just as many pitfalls for unprepared good guys - and there's nothing funny about them.
That's why most of us use a professional real estate agent from the start. Yet experts say about 15 percent of potential sellers first try to save the agent's commission by doing a For Sale By Owner, commonly called a FSBO (pronounced fizzbow).
Some succeed. Carolyn and J. C. Jones, for example, have sold several homes on their own. But Carolyn, who heads her own advertising agency, concedes that a lot of time and energy is involved long before they put their house up for sale.
"We study the market before we buy, get a choice location, do the remodeling that will give us a return on our investment and strive to have the most attractive yard and home in the community," she says. They also analyze home sales methodically, set their price carefully, hire a lawyer who specializes in real estate and apply all the professional marketing and negotiating skills they've developed over the years.
Could your FSBO be successful? Perhaps, but keep in mind that many of the 15 percent of would-be FSBO sellers invest time and money in the process, then turn to an agent when the sales prospects dwindle. Moreover, agent-assisted sales typically put more money in a seller's pocket than a FSBO, according to studies cited by real estate specialists.
How much more? On the average, a seller nets 2-3 percent more - after paying the commission - by using an agent. The Realtor earns the commission and the seller comes out ahead.
One major reason is the way shoppers approach FSBOs. Most buyers are looking for a steal when they approach FSBOs. They automatically deduct at least a sales commission before they start negotiating. The old real estate saying is true: both sides cannot save the same fee.
There are other major financial and even emotional factors to consider before selling your own home. For example, an agent can give you competitive pricing and marketing edges that would require time, money or both to achieve on your own.
You can't just talk to the neighbors for real estate pricing information. They may say that the Smiths got the price they liked, but it may not have been their asking price. Realtors have updated, comprehensive data on actual sales prices of homes in the area. They can also give your house broader exposure to the market than you can alone, especially with their membership in the Multiple Listing Service. Note also that less than 5 percent of houses actually sell from an ad in a newspaper. And never forget that you're competing against savvy pros, so you should at least offer some of the many services provided by agents. For instance:
Yet even all that may not be the hardest part. The toughest thing for most sellers on their own is their inability to screen prospective buyers. It usually starts as an annoyance over time-consuming tours by curious neighbors or financially unqualified prospects. It may include concerns about strangers parading through your home. It can escalate into anger as you hear unflattering comments about your home. And sometimes, it can get downright ugly as negotiations become heated.
The most experienced Realtors agree that they wouldn't sell their own homes because of sentimental values that can cloud one's judgement. This is an opinion shared by most veteran real estate salespeople. They believe that professional expertise and efforts in pricing, marketing and negotiating are well worth the commission. Which brings up the simple question: If most pros won't sell their own homes alone, are you sure you really want to?