Guest article from RealBlackAgents.com
In today’s age, the internet has brought transparency to almost every sector and the real estate industry is no different. Nowadays, most people start their search for a home online on platforms such as Zillow, Trulia, Realtor.com and more.
Many homeowners therefore feel that in today’s market where many homes are selling quickly, they can save some money on paying the standard 3% agent commission and sell their home on their own. This is called a For Sale By Owner (FSBO) listing.
After all, how hard can it be to take some pictures, hold an open house and have buyers come running in, right? Don’t get me wrong, for some people, this may indeed work out, but for the vast majority of people, this may not be as good an idea as it sounds.
There’s a reason that the percentage of U.S. homes sold by their owner has steadily been declining.
© National Association of REALTORS®
Here are 8 reasons why you should not sell your home on your own:
This is the #1 reason why you shouldn’t try to sell a home on your own. As stated before, most people start their search for a home online. Well the major platforms like Zillow and Realtor.com get their listings from something called the MLS.(Multiple Listing Service). This is a database of home listings that can only be accessed by licensed real estate agents.
If you’re not in the MLS database, other agents won’t know about your listing, which means they can’t show it to their buyer clients. Equally important, Zillow and Realtor.com won’t know about your listing either, which means most prospective buyers wont know about your listing either.
But what if you think you’ve got a pretty big network of friends and professional acquaintances who can help spread the word. Truth is, your network of potential buyers will pale in comparison to that of a good real estate agent.
An agent can tap into his or her network of buyers and fellow agents to start, and then devise their own marketing strategy as well in order to really give your listing the exposure that it truly deserves. You can also ask for professional help from companies like find a trade because they are the experts in dealing with these situations so your house would sell sooner or later at an acceptable price.
More exposure means more potential offers, which means more money in your pocket.
Too Many People
Ok, maybe you’re a digital marketing pro and you can generate a ton of exposure on your own. Well, now you have to deal with all of the people on your own. This includes:
#2 Potential buyers:
Holding open houses on your own. Letting strangers into your home, (which could pose a huge safety risk by the way). Will you rush home from work every time to show a potential buyer your home at the end of a long day?
Oh, and by the way, agents can sniff out real buyers from tire kickers and curious neighbors. Do you really have the patience to have your time wasted by people that are unqualified or not serious about buying your property?
A good agent can filter these people out, asking about their pre-approval from the bank or if this will be a cash offer. What schools they’re looking for and/or neighborhood qualities etc..
#3 The home inspector:
Buyers will hire a home inspector to inspect your property and 9 times out of 10, an inspector finds something wrong with your property, leading you to make additional concessions or drop your asking price
#4 The appraiser:
Again, an appraiser will likely have a different professional opinion of what the value of your property should be. Are you prepared to give valid reasons why your asking price should remain firm?
#5 The Buyer’s agent:
The vast majority of buyers will have professional representation who are skilled at negotiating the best price possible for their buyer client. Are you a master negotiator as well? If not, guess what? Less money in your pocket because the agent, who has negotiated hundreds of home sales, is far more likely to win that negotiation.
A good agent is in tune with the local market and knows what’s driving demand so they will have the upper hand in knowing what points to negotiate vs conceding to the other party.
A good agent knows how to take emotion out of a negotiation and focus solely on ensuring they get the best price for their client.
In fact, most agents won’t even take you seriously if you don’t have professional representation because too many agents have been burned by sellers who don’t know everything that is involved in closing on a house. Many agents don’t like dealing with FSBOs because the seller, who typically pays the agent commission, may try to avoid doing so, unless there is an explicit written agreement in place.
The paperwork isn’t easy and it’s very time consuming. Are you ready to close on your home without making any mistakes? Who pays the transfer taxes and closing costs? Have you disclosed any and all material defects with the property in the seller’s disclosure form?
If this paperwork isn’t completed by an expert, or by a legal professional, you run the risk of being sued for fraud, negligence or even breach of contract.
Agents have Errors & Omissions (E&O) insurance which protects them against mistakes that may be made in contracts. The buyer’s agent may exploit every single mistake that you made. Don’t put yourself at unnecessary risk.
You designed your home. You love your home. However you can only see it from your perspective, not that of a potential buyer.
An agent can spot potential flaws you may not notice with your home. They can also hire a professional interior designer or a professional cleaning service to ensure that your home is presented in the best light.
#8 Money – Pricing Incorrectly.
Ok maybe this should have been #1. Agents perform something called a CMA ( Comparative Market Analysis) to help determine how to price your home.
In short, real estate agents look at similar homes in your neighborhood (called comps) that have recently sold and then make adjustments to the prices based on the unique characteristics of your home.
For example, maybe a home down the street sold for $250,000 that has 4 bedrooms. Well you may have a similarly constructed home but only have 3 bedrooms. An agent will know that your home, in a competitive market, will not sell for $250,000 all things being equal.
Most owners don’t know their local home market as well as a professional agent. Moreover, they cannot emotionally detach themselves from their homes and look at them objectively through the eyes of a potential buyer.
Pricing your home too high means that it will sit on the market without garnering offers. And once buyers see that it has been on the market for more than 30 days, they start to wonder why and lower their own offer.
Price too low and you’ll leave money on the table. You may also receive multiple offers and a real estate agent is a professional negotiator so they can ensure, through multiple counter offers that you get the best price or your home.
Get the list price right, and you’ll have a ton of offers. Get it wrong, and you could struggle to find a serious buyer.
Selling a home may be one of the largest financial transaction of your life. It’s not impossible to sell your home on your own. You may be a lawyer, an expert negotiator, have access to the MLS and have an amazing property in a highly competitive market that garners a ton of bids immediately.
But chances are, this situation does not apply to you. Consult with one of our professional real estate agents to make sure that your plan to save money by selling your home on your own, doesn’t end up costing you tens of thousands of dollars in the end.