As a home seller, you may naturally want to make as much money as you can from the sale of your home. You may be thinking about selling a home yourself to avoid paying a real estate agent, which is understandable. You may wind up making more money overall.
However, there are some cons to selling For Sale By Owner without the help of an agent. Make sure that you know the drawbacks as well as the benefits to the For Sale By Owner process before you take the leap. Frankly, real estate agents do have the opportunity to make a lot of money. I would never blame an owner for trying to save money by selling their own home. Just be sure you realize selling a home For Sale By Owner is A LOT harder than you think!
You may make more money from the sale.
When you sell the home yourself, you don’t have to pay for the help of a real estate agent. Since real estate agents can charge a percentage fee (usually 6% in this area) based on the sale price, you could save thousands of dollars by doing it yourself-maybe even tens of thousands, depending on the value of your home. Saving a commission is in fact, the BIGGEST reason why homeowners attempt to sell For Sale By Owner.
The trick of course, is making the sale without a real estate agent a reality. This is easier said than done. According to The National Association of Realtors, over 90% of all For Sale By Owners Fail and end up hiring a real estate agent.
You can devote your full attention to the sale of your home.
A real estate agent, if he or she is worth hiring, is going to have other clients besides you. That means that you will not be the only concern of the agent. In contrast, when you sell your own home, you can devote all your available time and energy to the sale. Ideally, you have lots of free time to market the home extensively, show at any time of the day, well into the evening hours, on weekends, and be available to talk to buyers any time they might call, RIGHT? Having the time is only an advantage if you really do. If you work during the day or evening when potential buyers want to see the home and you’re not available, it's going to be even more difficult to sell For Sale By Owner.
You have complete control over the sale.
When you do it yourself, you are in complete control of the sales process. You do not have to listen to anyone’s opinions about how you will market the home, how you will price it, how you negotiate, how you prepare the home for sale, or any other decisions. It's all up to you. There is, of course, good and bad with this. While you are your own boss, you’re losing the valuable counseling and expertise of a potential professional.
Additional Thoughts on Selling For Sale By Owner.
The one instance where you can dramatically increase the odds of selling a home for sale by owner is when you are either located on a busy road or are located in a neighborhood where there are other homes listed by a real estate agent. When you are located on a main road you have the benefit of a lot of people noticing you’re selling your home as long as you have prominent signage.
A For Sale By Owner can also reap the benefits of their home if it is located in a neighborhood or subdivision where quite a bit of traffic is generated from other properties listed for sale by a Realtor. You will basically be profiting from the real estate companies ability to draw buyers into the neighborhood from other properties that are listed. When buyers enter the neighborhood, they may inquire about your home as well.
There may not be as much financial benefit as you imagine.
While you will not have to pay a real estate agent, you are not likely to fetch as high a price for your home as you would if you worked with a professional. An established and respected real estate agent knows how to market your property to the right buyers, price it competitively and negotiate based on the hard facts about your home. One of the biggest reasons why for sale by owners fail is an incorrect asking price for the home to start. Without the guidance of a competent real estate agent or appraiser, pricing the home correctly can be extremely difficult.
Without having these items down, a For Sale by Owner loses any potential for multiple offers.
This speaks to the laws of supply and demand. When selling a home, your goal is to get multiple offers from different parties. When doing so, a seller is in the
driver's seat. The price often gets bid up over asking price in such circumstances.
This is unlikely to happen when selling For Sale by Owner. There just isn’t going to be enough people that find out your home is for sale.
Marketing a home is not easy-especially without an established network.
You can list your home online without much effort, but so can everyone else. Good marketing ensures that your listing is noticed, and noticed by buyers that are a good fit for what you have to offer. Sure, an agent will list your home online, but he or she will also get the word out across a network of agents working for buyers in your area.
This is part and parcel with the Multiple Listing Service (MLS), as established online real estate sites such as Realtor.com. Your agent can reach people that you online listing never would, and in a way that is far more compelling than one of thousands of listings on a web page. The best real estate agents have their own websites that are prospect magnets: www.homesandheartswi.com
Selling a home is hard work!
If you want to do a decent job of selling your home, you are going to need to devote a considerable amount of time to the sale. Your home needs to be inspected, repaired as necessary, and photographed, shown, and more.
When you do get interested buyers, you will need to be available to answer their phone calls, to show the home when they are available, and you will need to negotiate a good price. Plenty of people sell their own homes. Few of them do it well, so you need to be prepared to put in the work.
For Sale By Owner Websites aren’t as effective as you may think.
When selling a home the vast majority of buyers find homes by looking online.
Unfortunately having your home on the most popular for sale by owner websites isn’t going to help you as much as you think.
Let's take Zillow for instance. Zillow has become one of the most, if not the most popular online websites that For Sale by Owners can market their properties. Since we as agents work with buyers and sellers, we are able to pay for Zillow leads. I myself have purchased Zillow leads as a way to get more buyers. However, 9 out of the 10 buyer
leads that I have received from Zillow have brought me to uneducated and unprepared buyers. A buyer may like a home he or she sees on Zillow, but that doesn’t make them a qualified buyer. Many for sale by owners get excited when a buyer calls and asks to see their property, once they arrive and view the home they may like, and even tell you that your home is “the one,” and fill you full of false hope that they will be taking the next step, only to find out that they haven’t spoken to a lender to know that they can get qualified, or if they can, what the price range is that hey can afford. This can lead a For Sale by Owner down a dark and long path of wasting their time to get their home ready for a showing and show their home to a buyer who simply is not even ready to purchase a home. The process of getting pre-approved can take a few weeks and even months to happen. Buyers need to be prepared when they walk in your door to make an offer.
When you sell your home with a Realtor, other Realtors are bringing their buyers to look at your property, and you can bet, they wouldn’t be working with that particular buyer unless they had made sure that they are pre-approved for a home that is priced where your home is priced. If a buyer that a Realtor brings to your home loves your home, then the next steps can be taken to get your home sold.
Even with your full attention, you will struggle to replace a good real estate agent.
You may have all the free time in the world, and you may be ready to devote yourself fully to selling your home. Unfortunately, you will still not be able to do many of the things at the same skill level as an established real estate agent.
An exceptional real estate agent does not need to spend every hour of the day on selling your home because he or she is efficient, practiced, and able to choose what to do and when with accuracy. You will be new at selling a home, which means every step will have a learning curve, and you will not have the opportunity to practice-to fail and
improve-to reach that same level of a professional.
You need to be careful to ensure your safety.
Inviting strangers into your home repeatedly carries risks, just as putting up personal information on the internet puts you at risk. Real estate agents have a process for
ensuring both their own safety and the safety of their clients, but you will be on your own when working with the public. You need to be extra diligent about what you put in your
listing, and especially, about how you show your home. Don’t show alone, ask visitors to sign a guest book and present ID, and remove all your valuables from sight before showing.
Be especially careful as well if you plan on doing an Open House. Lots of sellers don’t realize how foolish having an Open House can be. Real estate agents hold open
houses to generate a sense of urgency amongst interested buyers and also to prospect for new buyer business. Open houses might be convenient in your situation, so if you plan on having one yourself, be cautious.
You need to do your research and ensure you are legal.
Each area has its own laws and regulations related to selling a home. You need to read up on what will be required of you as a seller, and you need to prepare all of the necessary paperwork for making a real estate transaction. This stuff is important, so take your time and make sure you understand how to do things right before you move forward.
One of the biggest areas for lawsuits is not understanding your states disclosure laws. Unfortunately, many for sale by owners think they can sell their home as is and do not need to be honest about the problems. This is NOT the case in most states, including Wisconsin, and you could easily put yourself in the middle of an ugly lawsuit.
You will be a target for bargain shoppers.
For Sale by Owner attracts certain buyers, those looking for a good deal. They assume you are willing to sell for less because you do not have to pay a real estate agent, so you will need to be prepared for dealing with such buyers.
One of the biggest misconceptions of a For Sale by Owner is the fact they think they are going to pocket ALL of the commission savings. This is RARELY ever the case. In fact, most buyers want to share in the real estate commission savings too!
You may want to consult a real estate agent or appraiser about pricing your home.
Even if you do not hire a real estate agent for the full sales process, you can still benefit from talking to a professional about pricing your home. The price you set your home will have a significant impact on the results you get.
Price is too high and you will drive away buyers, or the ones who’s offers you would consider won't even see your home because it's priced above where they are approved. It may also cause your home to sit on the market for far too long, making it market worn, and causing you to have to drop the price well below what you would have saved if you would have just hired a real estate professional to begin with.
There are lots of real estate agents who will gladly complete a market evaluation on your property. However, just pick any real estate agent you come across, do some
research on who is selling what in your area! Ask friends, neighbors, or relatives for a referral to a good agent.