BEFORE YOU DECIDE TO OFFER YOUR HOME "FOR SALE BY OWNER"
"You can get rid of the broker, but you cannot get rid of the broker's work" is an old caution for those who intend to offer their homes "For Sale By Owner" (FSBO).
Selling on your own is not an easy undertaking. It requires a significant amount of time to study the process, understand your obligations, and do some of the complicated work that a Realtor does. In addition, selling on your own requires extra help from outside professionals, such as a Realtor, accountants or attorneys for some of the jobs that require specific expertise. And remember: just because you are not a real estate expert does not mean that you will not be held legally accountable for omissions, misstatements, or disclosure issues regarding the sale of your property.
Before you decide to list your home on the market as a FSBO, consider the following:
- You'll be drastically limiting your exposure to potential buyers, which means it can take between 10 and 15 times longer to sell your home. Houses that take a long time to sell usually sell for less.
- Most buyers find negotiating with sellers extremely awkward, and therefore avoid FSBO situations.
- Most buyers use a Realtor in their home search, and most buyers' agents won't typically work with FSBOs unless they are compensated. This means you will have to offer a selling commission to attract buyer's agents, which will cut into your expected "savings."
- Lack of negotiating experience can result in a lower selling price, or worse, end with a bungled contract and possible lawsuits.
- If you plan to use a lawyer to help you negotiate, their fees could be considerably higher than a Realtor's commission
- You only pay a commission to your Realtor if they successfully sell your home at a price you are happy with.
The following are some major pitfalls to avoid:
- As a personal safety measure, only show your house to those individuals with whom you've made a prior appointment that's been confirmed by phone.
- Don't price the house so low that it sells too quickly - pay for a market value appraisal by an experienced appraiser.
- Hold out for a buyer with written pre-qualification from a lending institution.
- Find out your legal obligations.
Real estate transactions involve one of the biggest financial investments most people experience in their lifetime. Transactions today usually exceed $100,000. If you had a $100,000 income tax problem, would you attempt to deal with it without the help of a CPA? If you had a $100,000 legal question, would you deal with it without the help of an attorney? Considering the small upside cost and the large downside risk, it would be foolish to consider a deal in real estate without the professional assistance of a Realtor.
Source: National Association of Realtors
Comments(0)