The true cost of selling your home FSBO
With the down turn in the economy and the drastic drop in home values it’s easy to understand why you as a property owner might initially think that selling your home without representation is a good idea. The truth is that it can cost you more then you know if your transaction goes south. There is a lot of issues that a lot of home owners don’t really consider when deciding to sell their home on their own. Below are just a few things to consider.
1. Carrying cost.
However long it takes to sell your home is how long it will be that you’ll have to continue to make your mortgage payments. Yes many people don’t consider that every month that they have to write that check to the mortgage company, it’s another month that their throwing away money towards interest on a loan that they aren’t planning to keep any more. Traditionally statistics show that homes that are sold by owners without the assistants of a broker spend more time on the market then those who are listed with a reputable broker. The monthly interest cost must be factored in to the calculation of how much it truly cost to sell your home if you want to be exact when determining your true bottom line.
2. Time and energy.
There is many different ways to calculate how much your time and energy is worth. You can base it off what your current wage is from your employment, or you can try to put a price on the time and energy it will take away from you and your family. It really doesn’t matter how you figure out what your time and energy are worth on a hourly bases because when it all comes down to it selling a home is a very time consuming and stressful process if it’s not something you do for a living. Think about it this way, would you do your own surgery just to save money? Would you defend yourself in court against serious charges just to avoid paying attorneys fees? Yes you might think that the two previous mentioned situations are dramatic and don’t compare to you trying to sell your home yourself. In actuality they are relevant and can be compared quite closely. First we’ll talk about the health issues that come up for sellers trying to sell their homes themselves. Lack of sleep, hire stress levels, and shortness in patience. All because their working hard in a line of work that isn’t their known profession. Yes you might have sold a home or two by yourself but just remember back when you did, was it really the best use of your time, energy, and emotions? Second let’s talk about the legal liability that you expose yourself when trying to sell your home yourself. The real estate laws are forever changing and the requirements that sellers of real estate properties have to comply with get greater and greater as time passes. There is so many different disclosure, inspection, and property condition laws that a seller has to comply with that it can be confusing at the least and at the worst extremely costly if everything isn’t done the way the law requires.
3. Advertising
Do you know where home buyers are looking for their next home to purchase? Do you have the money to advertise in multiple news papers? Do you know what buyer ads will bring in qualified buyers not just lookers? Do you have a stable of qualified buyers to advertise your property to? Are you constantly networking with real estate agents and brokers who can help you sell your home? Do you have an online presence beside your FB profile? Do you know how to create a property website for your home? Do you know all the online places that your home should be listed on? Do you know how to create fliers and property info packets that will convince buyers to buy your home? I am thinking if you’re not an agent or broker you probably will say no to all or most of the above questions. Think about it do you really want to spend additional money trying to advertise your home and learning how to by trial and error?
4. Escrow, title, Termite, and home inspectors.
Are you related to any who do any of the above? If you are you know the old saying about doing business with family. Well unless you are constantly dealing with the professionals that I’ve listed above your way of picking who you use to provide any of the above mentioned services is either going to be by price or by whatever advertisement of theirs catches your eye. Is that really the smartest way to choose who to work with when you’re about to deal in one of the biggest financial transactions if not the biggest financial transaction in your life? Real estate agents and brokers interact with these types of professionals on a everyday bases and can help you to choose who is the best fit to make your home sell the smooth transaction it should be.
5. Buyer qualification
Do you know how to make sure that the potential buyer that’s looking at your home is qualified? Do you know what the current underwriting guidelines are for obtaining a new home mortgage? Do you know what kind of red flags to look for that may not be obvious? Do you have the ability to pull credit reports on potential buyers? These and so much more are the issues that for sale by owner sellers face when it comes to insuring that their potential buyer is qualified and stays qualified. It’s usually a failed escrow because of a buyer not being qualified that convinces for sale by owner sellers to hire a real estate agent or broker. Why waist the time and risk your home’s value declining even further? A real estate broker that is knowledgeable can prevent so many headaches and issues that hiring them is a drop in the bucket cost when it compares to the money you can lose buy dealing with a un qualified buyer.
Remember your home is important to you and its worth is your wealth don’t risk hundreds of thousands of dollars by not being fully represented and protected.
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