Many people believe that the process of selling a house can be done quite easily and hence, from time to time you can see “For Sale By Owner” signs. Moreover, some think by selling their home by themselves, they will save money and time. We’ve seen many people who tried to sell their home themselves, only to fall victim to a lack of marketing, complex legal and financial issues, and we’ve even seen deals fall apart only to come in at the last minute to rescue them!
The reality is that the process of marketing and selling real property is a sophisticated business with complex legalities that are best left to professionals.
Should you choose to go on your own, here are a number of issues you need to consider before choosing to do a private sale, or for sale by owner.
To sell a house or condominium requires exposure. It is a realtor’s job to expose new listings to the market through MLS, the internet, newspapers ads and through the direct contact they have with buyers and buyer’s agents. Without this exposure (especially MLS and the internet) a property will take much longer to sell. If you are considering selling yourself, ensure that you have developed the proper marketing channels to achieve your goals.
The longer a property is on the market, the greater the chances of it becoming stigmatized. When a home takes a long time to sell, buyers assume that there is something wrong with it.
Managing the sales and marketing process is also very time consuming. Make sure that you have the resources, the time and the organizational skills required to market the property, provide interested parties with the ability to visit at times that might not be convenient for you, and the resources to co-ordinate all the complex legal and financial elements of the sale.
Exposure to the market is one aspect of a marketing plan, but another element to selling is getting buyers through the front door. Professionally run and advertised open houses give realtors and the public access to the property. Moreover, appointments to view a property are more effective if booked through an office and when the seller is not present. Buyers want to have the freedom to discuss the details and features of the property without being monitored or interrupted.
Most qualified buyers are working with experienced professionals to find them a home. Therefore, they rely on the information generated from MLS, the internet and mainstream advertising mediums. Often serious buyers will pass over sale by owner homes because the property is “not on the radar” or in the mainstream market.
When it comes to negotiating, buyers do not want to deal directly with sellers. Buyers want the single largest investment to be handled by professionals from start to finish.
A lack of negotiating experience and of pertinent information often will result in a lower selling price, or worse yet, an incomplete contract and possible lawsuits.
As most local buyers now retain an experienced realtor to represent them as their buyer-agent, you will end up negotiating with an experienced professional a private sale . This may mean that the expected savings in broker’s fees will be greatly reduced if you are offering a commission to entice buyer-agents to bring in their clients.
Only real estate agents have access to the up-to-date market information. News reports cannot approach the timeliness or specificity available to agents. Further, real estate agents are involved in home sales much more frequently than the average homeowner is and in some cases, even lawyers. This familiarity leads to a degree of expertise that provides an edge on negotiating and successful selling.
Be prepared that the savings may not be what you anticipate. If you are planning on using a lawyer to help you put a deal together, your lawyer’s fees will be significantly higher than if you use them only for closing the transaction. Moreover, accepting an offer is one thing, ensuring a safe and successful closing is quite another. Real estate transactions usually always have problems on closing. At times, expecting the buyers and sellers lawyers to fight it out or resolve the problems can mean the deal is lost.
This is the time that your experienced real estate professional, can be the most important. A realtor can act as a great mediator. Lawyers MUST act only on their client’s instructions and are not paid to negotiate.
If you contract a real estate agent to represent you in the marketing of your home, you only pay a commission if you successfully sell the house for the price you are happy with.