Thinking of selling your home yourself? Consumer protection laws, demanding buyers and a litigious environment have turned selling into an extremely complex process that calls for an advanced understanding of marketing, negotiation and risk management (otherwise known as “staying out of court”). “Going FSBO” seems attractive but can expose you to problems and hidden costs. Remember, if it seems too good to be true, it is.
Problem one: as soon as buyers find out you’re not paying a 6% commission they’ll probably expect you to cut your price by 6%. That’s only fair, but now you’re not saving money or having professional representation.
Problem two: your buyer will probably be represented by an agent who wants a 3% commission. There goes half your savings—and you’ll be dealing directly with an agent.
Problem three: FSBOs pay for services included in an agent’s commission such as advertising, flyers, mailings and placing the house on the Internet and Multiple Listing Service. It adds up. Call your newspaper and ask what an ad costs. Be sure you’re sitting down.
Problem four: there’s no such thing as a “straightforward transaction”. There’s simply too much money and emotion involved. How you respond to the minor and major crises that come up during a transaction influences whether you sell, how much you get and whether you’ll have legal problems after the sale.
Problem five: sellers are held to an increasingly higher legal standard. Attorneys and consumer protection laws have made selling a home a potential legal minefield. If that’s true, you might ask, then why not bypass agents entirely and go to the ultimate expert, a real estate attorney? Because a good agent can handle the vast majority of problems, more easily and more cheaply. Your agent is accessible night and day to spend as much time as you need to feel comfortable. That’s better—and cheaper—than paying a real estate attorney $400 an hour to review the stack of required disclosures and any offers, counter-offers, counter counters and all the other negotiations and communications of a real estate transaction.
Problem six: pricing your home right initially makes a huge difference in whether you sell, how quickly you sell, how much money you get and how much stress you go through. Without an agent’s reality check, most FSBOs price their homes too high. Even though they know what other homes have sold for, their home is always much better and worth much more—but only to them. Priced too high, their home isn’t shown, doesn’t sell, gets “stale” and drops off the radar. Potential buyers see how long their home has been on the market and think something must be wrong with it. Finally seller gets a “low-ball” offer and sells for less than if the home had been priced right to begin with.
Lastly, your agent is your buffer and your facilitator. The stress and emotion of a transaction can easily lead to an adversarial relationship between seller and buyer. Each starts to focus more on “winning” than on buying or selling. But a house won’t sell unless both sides feel they’ve won. Although your agent owes you a very high degree of responsibility, he or she is detached and professional enough to keep emotions from preventing what you want most—the sale of your house.
Interested in selling your home? Please contact me at firstname.lastname@example.org.
copyright © John Fyten 2004-2014