Selling your own home may sound appealing, and it can save you
thousands of dollars if you are up for it. It can also cost you
thousands if you go about it the wrong way. FSBO stands for “For
Sale by Owner”. Many homeowners choose to sell their home without
the aid of a real estate broker. Of course, real estate brokers
and Agents are experts in their field and charge a corollary fee.
If a homeowner decides to take on the job of selling his or her own
home, they are taking on a lot of work and responsibility. What follows is an outline of the potential advantages and
disadvantages of attempting to sell your home without the help of a
real estate professional.
The most obvious reason to sell your home yourself is to save
money. Real estate brokers usually ask 2%-4% of the total sale
price as their fee. If your house is worth $500,000 then this fee
is $10,000 to $20,000! This is money that you may save by selling
your home yourself. Of course, if you underestimate the worth of
your home, leave it on the market for too long or file your paperwork
incorrectly, you could lose even more.
If selling your home yourself, figure out how much money you can save
and decide how much of your time and effort it’s worth. You will
have to put in seemingly endless amounts of time researching
legalities, technicalities of contracts and the real estate market
itself; something a real estate broker got paid to do years ago.
If you do not have the time for this, you may be better off with a
professional.
Marketing your home can be done quite simply without the aid of a real
estate professional. Posters, signs, fliers and newspaper ads may
be your most effective marketing tools and these are available to
everyone.
On the other hand, real estate agents have access to MLS, the Multiple
Listing Service. This is a computer database service that spreads
the word of available property to agents around the State and even the
country. Only real estate professionals have access to MLS.
You may choose to pay a fee in order to have your home listed on MLS,
this is entirely your decision. Remember, if your home does sell
through MLS, you will have to pay a fee to the buyer’s broker as well.
When selling your own home, you are solely responsible for putting up
the money for any sale-related costs you incur. These types of
costs include the appraisal of your home, any experts needed to help to
determine the value of your home, title insurance and a title
investigation. When using a real estate professional, the agency
will often absorb the costs of marketing and legal fees.
When taking on the responsibilities of selling your home, you are
responsible not only for the costs of the various professionals, but
finding them as well. In addition to having access to money to
pay for these legal fees, real estate professionals have access to
databases of agencies that can help you through the process. As a
homeowner you are working from scratch.
Real estate professionals are expert negotiators. Selling a
property is a business transaction, there will be low-balling, offers
made that are never meant to be accepted, etc. Remember that the
buying party may be a better negotiator than you, or they may be
working with a negotiating real estate professional themselves.
Real estate contracts can be complicated. Even if you are
determined to sell your home without a real estate professional, have a
lawyer look over any contracts involved. This is an area in which
even one misplaced word can undo all of your hard work. Once
again, real estate agents are contract experts and may take the fall if
something goes wrong.
When selling your own home you have sole control over the price.
You do all of the negotiating and, if you want to, you can take your
time. Often, when selling through a realtor, you will be
pressured to lower the price of your home in order to speed up the
process or because of lowered market values.
Without a third party involved in the sale, you can be surer of your
transactions. You choose the buyer based on their proposals, not
other factors. You can be sure that the third party has no
ulterior motives for choosing a certain buyer and you can keep all
information completely confidential.
Another drawback of being your own salesperson is your emotional
interest in your home. You risk attaching too much sentimental
value to your home and over-estimating its actual value, thus making it
more difficult to sell.
If you have the time, patience, money and desire to sell your home by
yourself, then do it! But be aware of what you are getting
yourself into first. There is a reason real estate agents exist;
buying and selling property is not easy. In the end, you may
decide that your time and happiness is worth more than the money you
could save. Research your options and choose wisely.
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