Consider these real estate facts if you're considering going the For Sale By Owner route. According to the National Association of Realtors, the assistance of a professional Realtor provides not only a higher selling price. In the Stuart, FL area, it also may mean tens of thousands of dollars more for you. Although on its surface, For Sale By Owner may seem the intelligent way to save on the commissions, it can be a poor decision full of heartache if you're not versed in all aspects of real estate.
Let's see what it means to try to sell your home yourself. When selling a house, consider these factors:
1. Negotiating is tough
As a for-sale-by-owner (FSBO) seller, the most challenging part is negotiating your sale price, especially if you're not skilled in real estate valuation and negotiation. Relying on your skill to finalize a contract opens the door to potential legal problems and a smaller profit on closing day.
2. Online marketing looks easy when professionals do it
Without extensive knowledge of online marketing, your efforts as an FSBO may yield little results. Over 90% of buyers start their search online. To get Search Engine Optimization (SEO) and proper audiences, a skilled Realtor can blast your property to hundreds of sites exposing your home to the largest possible group of buyers.
A yard sign, for example, will only draw the people who see it or are told about it. A DIY approach conveys an unprofessional, unknowledgeable seller, the buyer automatically thinking they will get a deal. In other words, buyers discount FSBOs.
An agent will give you broad exposure through marketing, multiple listing services, professional photography, and advertising, to name a few. A good Realtor may have a database of thousands of buyers, directly showcasing your home. An agent also has the means to share with other agents so that they can share with their clients.
When you list your property with an agent in the Stuart, FL, area, you get over 40,000 agents helping you sell your house. FSBO sellers would have to shell out big bucks for these benefits and still might not reach the most critical audience.
3. Determining the best asking price
Those who put their homes on the market as an FSBO typically set a price from online assessment tools or the opinion of a friend or neighbor making claims to high offers (boasting). These methods will likely put the listing price way off.
There's no substitute for actual market knowledge and assessment. Your Realtor brings all that knowledge and experience to the process. Pricing strategies from a seasoned agent can earn you much more money upon sale.
Overpricing can cause a listing to go stale on the market, and buyers wonder why, even if you lower the price later. Buyers will likely pay a lower price for a stigmatized property, a home on the market for a long time.
A real estate agent provides an accurate home value based on a comprehensive market analysis to help you arrive at the right listing price. The goal is to ensure you're pricing your home in the sweet spot—not too high so that you are turning off potential buyers and not too low so you are leaving money on the table.
Your home will get the most bang when it comes on the market. Blasting it out everywhere through all means possible can get you multiple offers and a bidding war, garnering a well-above-asking sale price!
4. Estimating how much money to spend prepping
Overestimate, and you waste money. Underestimate, and you end up selling for less. Objective assessment by sellers can be complex.
Sometimes, it's the small things that count the most. An amateur paint job, a broken light switch, or an overgrown yard might be the one thing that causes buyers to walk away. Then again, spending money on items that don't improve the property's value can mean tens of thousands of dollars or more wasted by over-improving.
A professional Realtor has an eye for detail to advise on simple, budget-conscious improvements or repairs. Agents know how to spend the least money to get the best outcome by creating the best home presentation possible. Properly staging the property to appeal to the largest audience is a big plus too.
5. Showings are a drag
FSBO sellers don't realize how draining it can be to set up showings. In addition to potential buyers, you have to deal with both "looky-loos" (gawkers with no intention of buying the house) and "sharks" (investors looking to flip your home for a profit). These buyers may not be capable of buying and have not even spoken yet with a lender.
Sellers who advertise their FSBO will quickly be inundated with calls from real estate investors looking to save the same commission the seller hopes to save. Unfortunately, these offers are typically meager and could lead to no sale.
How an agent can help: Your agent will handle all the scheduling and staff the tours for you, so all you have to do is quickly tidy up and vacate. Buyers can get uncomfortable with a seller hanging around during the showing. If you're selling a second home, investment, or inherited property, showings can become challenging to achieve long distance.
Agents also weed out unsuitable offers and collect feedback that potential buyers might be unwilling to share directly with the seller. This feedback can be invaluable to the transaction.
6. Preparing your paperwork
Leave the paperwork to the pros. The closing process can entail more than 20 pages of complicated paperwork, including the contract and addendums designed to cover all situations that could go wrong.
For example, houses built before 1978 require an addendum regarding lead-based paint. Having a background in law or contracts may be the only exception. A do-it-yourself approach may cost much more than money should the outcome result in litigation.
House selling has nuances that, if overlooked, can cost you at closing. Did you know some properties have difficulty getting flood insurance? When selling a house, see the age of appliances, A/C, and water heater before you list.
Your agent will handle all property disclosures and documentation to avoid future liability. Realtors follow a strict Code of Ethics and comply with federal, state, and local laws. Your agent handles all aspects of transaction coordination.
7. Knowledge of service providers
Realtors can refer you to their network of top-quality lenders, lawyers, inspectors, appraisers, and repair people to ensure you get the best result in every stage of the selling process.
8. Understanding commissions
If you go the FSBO route, most Realtors won't show your property to potential buyers because they think they won't get paid. Decide upfront if you're willing to cooperate with agents assisting buyers and expect to pay a percentage of the sale in commission fees. If you're unwilling to cooperate with buyer's agents, you'll lose the leverage of over 40,000 agents in South Florida assisting buyers.
Buyers mentally shave off whatever commission they think you'd have paid a Realtor. Is all of the hassle of selling your home yourself worth it? Will you negotiate a better sale price than a professional? Statistically speaking, no. According to the National Association of Realtors, you'll likely have less money for all your trouble.
House selling can be fun if you're informed and a nightmare if you only think you know what you're doing. Don't risk thousands of dollars in a higher selling price because you feel the commission is too high. According to the National Association of Realtors, it's well worth hiring an agent. Statistically, you'll get more money at closing when you work with an agent.
For more information about For Sale By Owner, contact our Treasure Coast Insider Blogger Mona Leonard at 772-530-6131 or email mona@monaleonard.com