Early spring is a popular time for buying (and consequently selling) homes, so, now’s the time to get your home on the market. If you’re thinking about listing your home as for sale by owner (FSBO), there are some definite positives and negatives you need to understand before selling your home yourself. While having to pay a 5-7% commission to your realtor can make selling the home yourself seem like a no-brainer, it’s really not that cut-and-dried.
One basic thing to keep in mind is to focus on the appraised value of your home and not the tax assessment, what you want/hope/need to get out of it or what you paid for it. That last number, especially, just isn’t relevant at this point.
No commission fee. A 6% commission on the average selling price of $256,000 is about $15,000.
You’re in control. You get to pick the price, the appointment times and when/how you negotiate with the buyer. If a realtor is selling your home he/she is going to be walking people through at any time throughout the day so you’ll always have to be ready for buyers to traipse through your home.
You know your home better than any agent so you can point out all of its amenities. A realtor is going to try to remember all the features of your home along with all the other houses he/she is currently selling. There are lots of networks and venues for you to list your home. You can put a sign on your lawn with attractive flyers, put up an ad on Craig’s List, list it in local papers and on websites like ForSaleByOwner.com, HomesByOwner.com, Zillow.com and Owners.com.
There’s the risk of selling your home for a lot less than it’s worth. Statistics have shown that the average FSBO home sells for about 15% less than homes sold through a realtor. Sometimes, though, a realtor will do a free market analysis for you, hoping to gain your business in the process.
Your home will have less visibility. While there are lots of venues to for you to promote your home, only realtors can list homes on the Multiple Listing Service, which is one of the biggest online tools real estate agents use. Realtors have more experience, and sometimes more drive, in promoting your home through ads, signs and other methods.
Preparing all of the legal forms, disclosures etc. is your responsibility, and if you’re unfamiliar with the guidelines and requirements, which most of us are, you take the risk of financial and legal liability.
You’ll have to spend a lot of time educating yourself on the process of selling a home, the current market, advertising methods and working with potential buyers.
It might be harder to weed out unqualified/uninterested buyers without prior experience. Unfortunately, people who may not be able to get the proper financing will seek out homes that are for sale by owner because they know most private sellers are pretty inexperienced. You’ll also get some “just curious” folks who aren’t serious about buying a home but like to look around. These types of inquiries will waste a lot of your time and can distract you from serious buyers.
If you’re interested in listing your home as for sale by owner, don’t be discouraged by these negative aspects. You just need to go into the process informed and educated. Do your research, prepare for the pitfalls and roadblocks and don’t spend dollars to save pennies.
I’ve collected a lot of tips for you here, but please share any comments, suggestions or information you have with us! If you’re in the process of selling, then you’re probably in the market for a new mortgage. Talk to a Home Loan Expert today!
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